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Jun 30, 2023 / 12:46

WB provides US$264 million loan to support Vietnam's inclusive and sustainable recovery

Reforms supported by this credit will strengthen Vietnam's ongoing recovery from the Covid-19 pandemic and subsequent commodity price shocks.

A US$263.9 million International Development Association loan to Vietnam to support the country's efforts to achieve an inclusive, green, and digitally-driven economic recovery was approved by the World Bank's Board of Executive Directors on June 29.

 Electronics production at Katolec Vietnam in Quang Minh Industrial Park, Hanoi. Photo: Pham Hung/The Hanoi Times

This financing is intended to facilitate reforms that will support households and businesses and promote the expansion of renewable energy in the country.

The loan is the second and final tranche of a Development Policy Financing (DPF) series of two operations, following a $221.5 million operation approved in 2021.

While the full impact of this operation is expected to be felt in 2024, the DPF series has already supported significant achievements.

In 2021, more than 140,000 businesses benefited from a tax relief package, providing them with essential support. In addition, subsidized childcare was provided to more than 85,000 children, helping to promote gender equality in the workplace.

The availability of government services online has also doubled, increasing accessibility and convenience for citizens.

Going forward, the institutional and policy reforms supported by this operation will facilitate business recovery by enhancing the tax environment, supporting the financial inclusion of vulnerable households, and increasing access to quality childcare services.

To spur green and digital development, the reforms supported by the DPF focus on procurement, digitizing public administration, scaling up renewable energy, and bolstering the financial sustainability of the power sector. Moreover, reforms supported by this operation are expected to improve public service delivery to households and businesses.

“Reforms supported by this credit will strengthen Vietnam's ongoing recovery from the Covid-19 pandemic and subsequent commodity price shocks while paving the way for more inclusive, greener, and digital-friendly development,” said Carolyn Turk, World Bank Country Director for Vietnam. “We look forward to working with the government to implement these reforms and support Vietnam to achieve its development goals.”