The World Bank and the State Bank of Vietnam on Wednesday signed US$190 million in credit for the Local Development Investment Funds Project to foster public – private partnership and generate more funding for infrastructure development.
The money will serve as catalyst to boost the investment capital of qualified funds and to support the Project Management Unit at the Ministry of Finance.
The Local Development Investment Funds Project aims to improve effectiveness of Local Development Investment Funds in leveraging private sector financing for municipal infrastructure, and to strengthen the financial, technical, social and environmental safeguards management capability of the funds.
“This project sets a new benchmark for the Bank’s work in infrastructure/municipal finance in Vietnam,” Ms. Victoria Kwakwa, the World Bank’s Country Director for Vietnam, said in a statement.
“It will open up an innovative channel for capital mobilization for municipal infrastructure development through public private partnership, which has proved successful elsewhere,” she added.
The credit was approved by the World Bank’s Board of Director on July 2nd, 2009. The funding comes from the International Development Association, the World Bank’s concessional lending arm with zero interest, 40 year repayment period and 10 year grace period.