In a short interview granted to the Vietnam News Agency on August 26, Mr Sakaba said that Vietnam and Japan are scheduled to sign an ODA package worth US$650 million in September.

Although he declined to talk about the total aid amount, he said the signing of ODA packages will take place in different phases and capital disbursement will follow two steps. First, the Japanese side will pour money into the State Bank of Vietnam which will then lend the capital to commercial banks.

By the end of September this year Japan’s ODA will be much higher than the US$1.1 billion figure recorded two years ago, even without including the US$800 million aid package signed in April 2009.

The diplomat explained that on top of the annual committed amount, the Japanese government has decided to grant additional aid to help Vietnam weather the global financial storm. Beneficiaries will be small- and medium-sized enterprises which specialize in support industries.

According to the ambassador, aid packages will still focus on key infrastructure construction projects such as bridges, roads and airports. Part of the total sum will be spent on environmental protection and energy saving.