ADB's Work in Viet Nam

Viet Nam has weathered the impacts of the coronavirus disease (COVID-19) pandemic well in 2022. Economic activities rebounded rapidly following the removal of COVID-19 restrictions and the achievement of nationwide vaccination coverage. The economy grew by 8% in 2022—the highest growth since 2011—propelled by domestic consumption recovery, resilient exports, and steady disbursement of foreign direct investment. Viet Nam’s medium- and long-term economic prospects are bullish, aided by sound economic fundamentals, a growing middle-income class, an improving doing-business environment, and expanding exports from multiple free trade agreements

ADB is continuing its lending and nonlending support to help Viet Nam enhance climate-resilient transportation, promote sustainable urban development, improve rural connectivity, and reduce pockets of poverty in remote areas. ADB’s assistance pipeline for Viet Nam also helps to facilitate access to quality education, improve health security, support climate change adaptation and environmental sustainability, and promote private sector development, gender equity, digital transformation, and regional cooperation and integration.

To date, ADB has committed 457 public sector loans, grants, and technical assistance totaling $16.5 billion to Viet Nam. Cumulative loan and grant disbursements to Viet Nam amount to $12.39 billion. These were financed by regular and concessional ordinary capital resources, the Asian Development Fund, and other special funds. ADB’s current sovereign portfolio in Viet Nam includes 31 loans and 2 grants worth $3.34 billion.

ADB approved an additional $1 million for technical assistance in 2022 to support the identification of climate and disaster resilient projects for potential ADB financing, and capacity building in preparing and processing projects for selected provinces.

ADB is committed to aligning its operations with the Paris Agreement on climate change and ensuring all projects advance low-carbon, climate-resilient development pathways. The bank provided $200,000 in technical assistance in 2022 to produce a knowledge product that will offer guidance on preparing project proposals aligned with the Paris Agreement, specific to improving the road network of the Mekong Delta Region.

ADB also provided $200,000 in technical assistance, funded by the governments of Australia and Canada, to support public–private partnerships, promote private sector development, and accelerate state-owned enterprise reform.

Nonsovereign operations. Total outstanding balances and undisbursed commitments of ADB’s nonsovereign transactions in Viet Nam as of 31 December 2022 was $1.39 billion representing 10.9% of ADB’s total private sector portfolio.

Operational challenges. Viet Nam’s vulnerability to natural hazards, such as floods, storms, and drought, presents a major risk to the country’s economy and infrastructure. Future COVID-19 waves or new variants could affect the achievement of the objectives of the Socio-Economic Development Plan 2021–2025. ADB will continue to play a proactive role in disaster risk reduction efforts in Viet Nam as well as provide support for health system resilience.

Pupils of class 9A of Dong Tien Secondary School, Pho yen District, Thai Nguyen Province, Vietnam learn in a chemistry class supported by ADB. The ADB project provided funding for the construction of classrooms, upgrading of learning equipment and enhancing education quality for 500 pupils each year. Photo: Viet Tuan Tran/ADB

The Government of Viet Nam has made efforts to improve its regulatory framework for the management and utilization of official development assistance (ODA). However, complex ODA regulations still present risks to ODA intake and timely project delivery. To address these issues, ADB and other development partners continue to dialogue with the government to help simplify ODA procedures for smoother processing and implementation of projects, accelerating disbursements under ODA and concessional loans, and strengthening procurement capacity.

Knowledge Work

The country knowledge plan for Viet Nam was updated to align with the country partnership strategy (CPS) for Viet Nam, 2023–2026, and reflects ADB’s additional knowledge support to address the country’s needs as determined by the second knowledge needs assessment conducted with government agencies in 2022. Knowledge solutions will be delivered for policy development, capacity building for stakeholders, and increased awareness and evidence-based information.

Highlighted knowledge solutions delivered in 2022 include: (i) policy support to develop the Viet Nam Water Security and Dam Safety Policy and the National Strategy for the Development of the Digital Economy and Digital Society; (ii) capacity building programs for climate change adaptation, water resources and water security, and women-owned small and medium-sized enterprise development; and (iii) various research on credit ratings, financial institutions regulations, and gender gap assessments with Lien Viet bank, Viet Capital bank, and Finngroup.

  ADB Projects in Viet Nam Project data sheets for loans, grants, TAs

Future Directions

The CPS for Viet Nam, 2023–2026, supports Viet Nam in fostering inclusive, green, and private sector-led growth and building the foundation for achieving the goal of becoming an upper middle-income country by 2030. The bank has worked out a core pipeline of projects in 2023–2025 that uses more responsive financing modalities in helping Viet Nam to transition to a green economy, harness the private sector, and promote social equity. ADB continues to follow the integrated sovereign, nonsovereign, and knowledge approach that closely aligns with Viet Nam’s strategic priorities for medium- and long-term post-pandemic recovery, including: (i) addressing climate change impacts; (ii) improving the efficiency of the economy; and (iii) promoting an economy based on science, technology, and innovation

ADB will accelerate its shift to provincial projects in line with government processes and has signed memorandums of understanding with the government for the development of six key economic regions of the country. These will lay the foundation to further promote ADB’s assistance to Viet Nam and enable integrated solutions to subnational development challenges. At the same time, ADB will maintain its engagement in large national projects prioritized by the government in 2023–2025.