The provinces of Bac Kan, Cao Bang, Ha Giang, and Lang Son—the project area—have significant potentials to be trade hubs due to their strategic location, at the nexus of the People’s Republic of China, the capital Hanoi, the Hai Phong port, and the ADB-supported Greater Mekong Subregion North-South Economic Corridor.
However, these potentials are yet to be fully realized, with gross domestic product per capita of the four provinces in 2015 remaining at US$1,160, almost half of the US$2,036 national average.
The basic infrastructure for inclusive growth in the Northeastern provinces sector project will help unlock the binding constraints through the development of basic infrastructure across key sectors including trade, transport, health, and agriculture.
Specifically, the project will improve road connectivity among the provinces by upgrading about 121 kilometers (km) of provincial and 144 km of district roads, provide rural water supply and improve agriculture value chain infrastructure in Lang Son province through farm-to-market connectivity and support to local businesses. It will also strengthen the capacity of the provincial governments, particularly on public asset management.
The total cost of the project is US$190.3 million, with the Government of Viet Nam contributing US$40.3 million. The project is expected to be completed by the first quarter of 2023.
ADB’s assistance for the basic infrastructure for inclusive growth in the north-central provinces sector project includes a regular loan of US$52 million and a concessional loan worth US$97 million. Both loans will be financed from the ordinary capital resources where most of ADB’s lending come from. The total cost of the project, is US$203.52 million, with the Government of Viet Nam contributing US$54.52 million.
Economic development in the project provinces—Ha Tinh, Nghe An, Quang Binh, and Quang Tri—has been constrained by the fragmented coverage of basic infrastructure, with the 2015 poverty rate reaching 13 per cent compared to the 7 per cent national average.
Moreover, the provinces are extremely vulnerability to weather-related disasters and are predicted to have the country’s highest increase in annual mean temperature at 1.7 per cent and annual rainfall shooting up by 20 per cent.
To address these issues, the project will improve connectivity among the provinces by upgrading and constructing about 214 km of climate-resilient provincial and district roads, which will benefit more than 900,000 beneficiaries.
It will boost business development through the construction and upgrading of rural water supply, flood protection, irrigation, and port services. It will also improve the capacity of the provincial governments, particularly in public asset management. The project is expected to be completed by the first quarter of 2023.