Vietnam gets Asian Development Bank Loan For Rail Upgrade
The Asian Development Bank (ADB) and Vietnam signed Tuesday two loan agreements worth US$80 million for upgrading a northern railroad and developing small enterprises.
Vietnam’s central bank governor, Le Duc Thuy, who signed the agreements on behalf of the government, appreciated the support given by ADB and donors and promised the government would make full use of the loans and fulfill all its targets.
Of the loan, $60 million will be used to upgrade and modernize the 285 km rail line between the capital Hanoi and Lao Cai on the Chinese border. The project is expected to promote trade between the two countries and provide a vital subregional link.
The line, built around 1910 and in need of upgrades and rehabilitation, carries rapidly growing traffic between Vietnam’s Hai Phong port and China’s Yunnan province.
The project is also expected to open up important tourist destinations in Viet Nam, including the World Heritage Site, Ha Long Bay, and the Sa Pa mountain resort.
The ADB loan covers almost 38% of the project cost of US $160 million. Agence Francaise de Developpement will provide a loan of €32 million ($41.5 million) and the French Ministry of Finance a credit of €30 million ($38.9 million). The Vietnamese government will cover the remaining cost of $22.5 million.
Small, medium sized enterprises
The remaining $20 million of the ADB loan will be used for the second phase of a two-part project called the SME Development Program Cluster, which aims to promote a conducive business environment by adopting market-friendly practices and eliminating policy bias against SMEs.
The first phase received a loan of $60 million in 2004 and has achieved good results, especially in areas related to the New Enterprise Law.
The law removed a major impediment to enterprise growth by rationalizing the system of registration and licensing.
The second phase will focus on enhancing the policy and regulatory frameworks for SME development; boosting SMEs’ access to financial and other resources; and improving the regulatory frameworks for industrial and technical standards.
"This is an important program in the context of Vietnam’s liberalization reforms, especially as it levels the playing field for private sector enterprises," said Ayumi Konishi, ADB’s Country Director for Vietnam, who signed the agreements.
Source: Thanh Nien News
