The World Bank has approved a US$350 million loan to help Vietnam improve the efficiency of its public investments as part of a policy reform initative that started in 2009.

The bank said the loan will focus on strengthening the four stages of investment cycle – project selection, project implementation, financial management and oversight.

The operation is part of Vietnam’s Public Investment Reform series that was prepared in the middle of the 2009 global economic crisis.

The bank had already approved the first financing tranche of $500 million in December 2009.

“Since the country is facing enormous demand for infrastructure development in the coming years, strengthening the project cycle will play a key role in ensuring a high quality of public investment,” Victoria Kwakwa, the World Bank’s Country Director for Vietnam said in a statement.

“We encourage the government to continue the reform program, especially in the SOE sector, in order to achieve higher productivity of state invested capital,” she said

The major part of the new loan, $262.7 million, comes from the International Development Association – the World Bank’s concessional lending arm for low income countries.

The rest is sourced from the International Bank for Reconstruction and Development, which supports middle income countries.