The two credit agreements were signed in Hanoi on July 9 between representatives from the State Bank of Vietnam (SBV) and the World Bank (WB).

The credit for Programme 135 (P135), worth US$100 million, has a duration of 40 years, including a 10-year grace period at an interest rate of zero percent. The loan is part of the WB’s assistance programme earmarked for the Government’s P135 Phase 2.

The programme also drew other aid donors from the Governments of Australia, Finland, Ireland and the United Kingdom with a total of US$100 million.

P135 is the core of the National Poverty Reduction Programme, SBV Governor Nguyen Van Giau said at the signing ceremony, adding that after seven years of implementation, 700 of the 2,400 target communes are now above the poverty line.

Applauding Vietnam’s achievements in poverty reduction, WB country director Victoria Kwakwa said the bank supports the country’s programmes, particularly in mountainous and ethnic minority areas.
The credit will assist poverty reduction in 44 localities through investment access activities, she said.
Since last July, the WB has committed itself to providing US$1.5 billion to Vietnam, she said, describing it as a sign of the bank’s close cooperation with Vietnam and its strong commitment to the country’s development.

The WB is providing US$200 million in additional financing for the ongoing Rural Energy II project. The project covers the upgrade and expansion of the low-tension electricity network in 1,200 rural communes and the medium-tension network in the northern, central and southern regions, as well as the development of policies, enhancement of management capacity, and the provision of electricity to local power distributors.