ADB Loan to Enhance Urban Services in Towns Along GMS Economic Corridor

HA NOI, VIET NAM (3 December 2015) – The Asian Development Bank (ADB) has approved a $100 million loan to support government efforts to boost urban and water services in Bac Giang, Mong Cai and Sa Pa, three towns located along the North-South Economic Corridor within the Greater Mekong Subregion (GMS).

“The project will enhance the competitiveness of these towns, as well as the quality of their environment, by improving wastewater management, upgrading urban roads and drainage systems, protecting riverbanks, and creating more public urban spaces,” said Rudolf Frauendorfer, Lead Urban Development Specialist in ADB’s Southeast Asia Regional Department. “Improved urban services in these three towns, located at key points along the economic corridor, will contribute to Viet Nam’s goal of becoming a modern industrial economy by 2020.”

The assistance will finance the construction and upgrading of wastewater treatment plants, provide wastewater treatment services—including connections for thousands of households, build new pumping stations, and dredge canals to protect urban areas from periodic flooding.

In Sa Pa, an international tourist destination known for its trekking routes through mountains and rice fields, the assistance will also finance general improvements to the town center public area and the drafting of a green city action plan.

The project incorporates key lessons from similar ADB urban development projects such as establishing trade and transport connections with nearby cities and regions, involving local communities in project activities, and adopting a business-like approach to revenue collection, operation and maintenance of infrastructure and services.

The $100 million loan comes from ADB’s concessional Asian Development Fund, and the government will provide $21.67 million in counterpart support. The project will run for 5 years, with an expected completion date of December 2020.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region. In 2014, ADB assistance totaled $22.9 billion, including cofinancing of $9.2 billion.