The loan, funded by the International Development Association (IDA) – the WB’s concessional lending arm for low-income countries – will be used to help smallholding farmers in eight central Vietnamese provinces through the Agriculture Competitiveness Project.

The funds will also be used to help smallholding farmers access markets through the provision of technology services, public infrastructure for agriculture, and will facilitate farmer organizations and linkages to agribusiness.

Meanwhile, the ADB will provide a $25 million loan to help Vietnam carry out policy reforms for its poverty reduction program in cooperation with a number of other development partners, according to a press release Tuesday.

The ADB will also offer $25.5 million in supplementary financing to an existing emergency assistance loan to Vietnam for the rebuilding of rural infrastructure severely damaged by typhoons and storms in 2005.

The project was initially approved in 2006 by ADB with a loan of $50.97 million. However, high inflation has increased the cost of civil works, materials and labor. Additional damage to rural infrastructure caused by typhoons in 2006 and 2007 has contributed significantly to cost overruns.

The supplementary ADB funding will ensure completion of the project, which targets 10 of the most badly affected provinces in Vietnam’s northern and central regions.

Reported by Bao Van