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ADB inks $100m loan for irrigation
The Asian Development Bank has approved a US$100 million concessional loan to rehabilitate one of Viet Nam's oldest and largest irrigation and drainage systems, located in the heart of the Red-Thai Binh River basin.
The loan will go toward the construction of a campus for a Water Resources University (WRU), the only university in Viet Nam to have a full programme of subjects to educate water engineers.
"The loan-funded project is designed to address two binding constraints that contribute to the core sector problem of poor quality and delivery of water-related services: Insufficient human resource capacity and inadequate public infrastructure," said Dennis Ellingson, senior Natural Resources Management specialist of ADB's Southeast Asia Department.
Irrigated agriculture is by far the largest user of water in Viet Nam. Paddy rice is the dominant crop, accounting for more than 80 per cent of the irrigated area.
In recent years, however, Viet Nam's aquaculture and cultivation have diversified. Also, economic sectors other than agriculture are placing greater demand on water resources and leading to reallocation.
The Song Hong (Red River) Delta is one of the key economic hubs of Viet Nam. Around 560,000 people living in the surrounding area of the 50-year old Bac Hung Hai irrigation and drainage system are expected to benefit from increased household incomes from improved irrigation.
A total of 1.9 million people in the area will benefit from improved drainage and reduced risk of flooding.
The loan will fund education facilities to train engineers in water-related fields that are needed to meet the heightened demand of a rapidly growing economy.
A total of 13,400 future students and 800 faculty members will benefit from improved quality of education and improved learning and accommodation facilities at the new WRU campus.
The loan will have a maturity of 32 years with a grace period of eight years and an interest rate of 1 per cent every year during the grace period and 1.5 per cent thereafter.
Agence Française de Developpement will co-finance the project with a loan of 20 million euros. The government of Viet Nam will provide counterpart financing of $51 million for the project.
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