Nhan Dan Online- The World Bank’s board of directors on July 3 approved US$350 million in credit for two projects on development investment funds and urban upgrading in Vietnam.

The Local Development Investment Funds Project will receive US $190 million in credit. This 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.

"The demand for municipal infrastructure in Vietnam has increased rapidly as the country copes with rapid urbanization, decentralization and high rates of economic growth", said the project Co - Task Team Leader Dang Duc Cuong.

This project, built on success of the model currently utilized in the Ho Chi Minh City Investment Fund for Urban Development (HIFU) Development Project (HDP), will develop infrastructure finance models that involve local institutions and leverage private capital, he said.

The US$160 million additional financing for the Urban Upgrading Project will cover a financing gap for the projects in Can Tho, Hai Phong, Nam Dinh and Ho Chi Minh City resulting from high levels of inflation in 2007-08.

 In addition, the financing in Ho Chi Minh City will finance improvement of the Tan Hoa – Lo Gom Canal - one of the lowest income areas in the City. The canal is a source of direct pollution and flooding in the basin.

Houses in the basin are frequently inundated by up to a meter of mixed flood water and sewage which gives rise to water borne diseases such as diarrhea and typhoid and flooding seriously impacts economic activities.

“The urban upgrading project has been improving the living conditions of many cities in Vietnam, such as Can Tho, Hai Phong, Nam Dinh and Ho Chi Minh City, benefiting about 2 million poor people in these cities”, according to Dean A. Cira, Urban Sector Coordinator for the World Bank in Vietnam.

Through this additional financing, we hope that another 1 million poor people in Tan Hoa – Lo Gom canal area in Ho Chi Minh City will benefit from better living conditions and environment, he added.

By D.T