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Vietnam Today

WB extends support for infrastructure development in Lao Cai and Phu Ly

Released at: 15:10, 13/06/2017

WB extends support for infrastructure development in Lao Cai and Phu Ly

Lao Cai City (Illustrative image. Photo: baotintuc.vn)

Two emerging northern cities to benefit further from additional $53 million for Medium Cities Development Project.

by Doanh Doanh

The World Bank’s Board of Executive Directors approved $53 million in support on June 13 for infrastructure development in Lao Cai city in Lao Cai province and Phu Ly in Ha Nam province, two emerging cities in northern Vietnam.

The additional financing will bolster the efforts of the Medium Cities Development Project (MCDP), which has so far benefitted over 210,000 people, exceeding initial targets.

“The Medium Cities Development Project has shown that improved infrastructure services can transform communities - water and sanitation facilities lead to healthier children and families, flood prevention infrastructure provides opportunities to introduce much-needed public space, and better roads bring communities closer to economic opportunities,” said Mr. Ousmane Dione, World Bank Country Director for Vietnam. “This additional investment means even more communities will benefit from improved urban environments.”

Infrastructure services to be improved include water treatment and wastewater collection, flood prevention in low lying areas, and transport services in areas with poor or non-existent roads or access to transport networks.

Six schools built by the project have been recognized as the best in their respective provinces, while investments in public toilets and school sanitation facilities have led to better public health.

Meanwhile, the upgrading of basic infrastructure facilities such as sewer systems and upgrading roads have helped 85,000 people in several wards of Lao Cai and Phu Ly cities. Flooding and pollution caused by wastewater have also been addressed, through improvements to retention lakes, drainage and sewer systems, and the construction of wastewater treatment plants.

The additional investment will be used to bridge the financing gap caused by exchange rate fluctuations since the project’s inception.

The development objective of the MCDP for Vietnam is to increase access to improved urban infrastructure services in the cities of Lao Cai, Phu Ly, and Vinh (northern Nghe An province) in a sustainable and efficient manner. The related Project Paper sought the approval of the Executive Directors to provide an additional IDA Scale-Up Facility credit of $40 million and an additional credit of $13 million. The proposed additional financing will: (i) close a financing gap caused by the appreciation of the US dollar against the Special Drawing Rights, and (ii) enable the scaling-up of activities in two of the three project cities (Lao Cai and Phu Ly). Concurrently, a first level restructuring is proposed, which includes modifications of the Project Development Objectives and Results Framework of the MCDP and to extend the closing date of the original IDA credit to June 30, 2018 and the closing date of the MCDP to December 31, 2020.

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