The 285-km railway line running from Yen Vien station (outside Hanoi) to Lao Cai station serves as a rail link between Hai Phong port and China’s Yunnan Province.

The project will upgrade the railway line to ensure safe traffic in the area and boost the operating capacity of its stations and main terminal points for bigger trains in future.

ADB’s loan, from its Asian Development Fund, covers almost 38 percent of the project cost of US$160 million. The loan has a 32-year term, including a grace period of eight years. Interest is charged at 1 percent per annum during the grace period and 1.5 percent per year for the rest of the term.

The same day, Mr Thuy and Mr Ayumi Konishi also signed an agreement for a US$20 million loan for the second phase of a two-phase project in Vietnam to foster a business climate more conducive to the growth of small- and medium-sized enterprises (SMEs).

ADB’s loan, from its concessional Asian Development Fund, carries a 24-year term, including a grace period of eight years. Interest is charged at 1 percent per annum during the grace period and 1.5 percent per annum subsequently.  The Ministry of Planning and Investment will be a co-ordinator for the second-phase sub-project which is scheduled for completion in July 2008.