The World Bank will provide a total of 300 million USD to aid the implementation of the second phase of a poverty reduction project and to increase rural access to electricity.

The two credit agreements were signed in Hanoi on July 9 between representatives from the State Bank of Vietnam (SBV) and the World Bank (WB).

The credit for Programme 135 (P135), worth 100 million USD, has a duration of 40 years, including a 10-year grace period at an interest rate of zero percent. The loan is part of the WB’s assistance programme earmarked for the Government’s P135 Phase 2.

The WB earlier provided 50 million USD and expects to lend an additional 100 million USD later this year to the programme.

In addition to the WB, the programme drew other donors from the Governments of Australia, Finland, Ireland and the United Kingdom with a total in assistance of 100 million USD.

P135 is the core of the National Poverty Reduction Programme, SBV Governor Nguyen Van Giau said at the signing ceremony, adding that after seven years of implementation, 700 of the total 2,400 targeted communes are above the poverty line.

Applauding Vietnam’s achievements in poverty reduction, WB country director Victoria Kwakwa stressed the bank’s support of the country’s programmes, particularly in mountainous and ethnic minority areas.

The credit will assist poverty reduction in 44 localities through investment access activities, she said.

Since last July, the WB has committed to providing 1.5 billion USD to Vietnam , she said, describing it as a sign of the bank’s close cooperation with Vietnam and its strong commitment to the country’s development.

The WB is also providing 200 million USD in additional financing for the ongoing Rural Energy II project.

The project is to provide good quality, affordable electricity to people living in rural areas, contributing to the country’s socio-economic development programme.

The project covers the upgrade and expansion of the low-tension electricity network in 1,200 rural communes and the medium-tension network in the northern, central and southern regions, as well as the development of policies, enhancement of management capacity, and the provision of electricity to local power distributors.
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The project has a total in investment capital of 250.6 million USD, to which Vietnam contributes 50.6 million USD. It will be carried out in 25 provinces from now to 2014.

Earlier, the WB also provided 300 million USD to two other projects, the Rural Energy I Project and the Rural Electricity Transmission Project./.