The World Bank will provide an additional US$160 million in no-interest credit for an urban upgrade project in Vietnam through 2014.

Under an agreement signed between the State Bank Governor Nguyen Van Giau and WB Country Director for Vietnam Victoria Kwakwa in Hanoi on September 10, the credit will cover a financing gap, resulting from high levels of inflation in 2007-2008, for projects in the southern city of Can Tho, the northern city of Hai Phong, northern Nam Dinh province and Ho Chi Minh city .

The financing in Ho Chi Minh City will also finance improvement of the Tan Hoa-Lo Gom Canal, one of the lowest income areas in the city.

Begun in 2004, the urban upgrade project costs a total US$417.5 million with US$225.5 million funded by the WB.

The project helps eliminate hunger and reduce poverty in the four places mentioned above by improving living conditions and environment for low-income residents through upgrading infrastructure and providing housing. It is expected that two million people will benefit from the project.

Addressing the signing ceremony, State Bank Governor Nguyen Van Giau, on behalf of the Vietnamese Government, thanked the WB for its assistance to Vietnam over the years. Especially, in the 2009 fiscal year, the WB has made great efforts in bringing to life its commitment to provide preferential loans to Vietnam.

The signing of the credit marks the end of the WB’s commitments to Vietnam in the 2009 fiscal year, the State Bank Governor said.

During the fiscal year, the two parties have signed 10 programmes, projects and additional preferential loans worth a total of US$1.5 billion. “The assistance is an important source to support the Vietnamese government to pursue socio-economic reform, hunger elimination and poverty reduction programme,” said Giau.

WB Country Director for Vietnam Victoria Kwakwa pledged further support for Vietnam on these issues.

She also expressed her hope that WB’s financial commitments to Vietnam in the 2010 fiscal year will reach US$2 billion. (VNA)