Vietnam Finalizes $240M Japanese Loan for Climate Projects in 8 Northern Provinces

HANOI – Vietnam’s Ministry of Finance has formalized 11 on-lending agreements valued at $240 million, channeling official development assistance (ODA) from Japan into two major development projects across eight northern mountainous provinces.

The signing ceremony was held in Hanoi on June 12, attended by Deputy Minister of Finance Tran Quoc Phuong, Japanese Ambassador Ito Naoki, and Japan International Cooperation Agency (JICA) deputy chief representative Ikeda Hiroyuki. The agreements were signed with the provincial governments of Cao Bang, Dien Bien, Lai Chau, Lang Son, Lao Cai, Son La, Thai Nguyen, and Tuyen Quang.

These agreements mark the initial step in implementing loans VN24-P1 and VN25-P1. The capital will finance the Climate-Resilient Infrastructure Development Project to Support Production Activities of Ethnic Minority Communities in the Northern Mountainous and Midland Provinces, as well as the Disaster-Resilient Rural Development Project.

Deputy Minister Tran Quoc Phuong noted that these are the first on-lending agreements to be implemented under bilateral loan arrangements signed after Vietnam’s recent administrative restructuring and the introduction of its two-tier local government model.

"These projects carry profound socioeconomic significance, aiming to strengthen resilience to climate change and natural disasters, improve rural infrastructure, promote sustainable livelihoods, and enhance the living standards of ethnic minority communities in disadvantaged areas," Phuong stated. "These objectives represent the core mission of official development assistance and are among the highest priorities of the Vietnamese state and government."

He added that the agreements are a legal requirement under the Law on Public Debt Management and also serve to define the responsibilities of provincial people’s committees in managing funds, achieving project targets, and fulfilling debt repayment obligations to the central budget. The framework is intended to strengthen the proactivity and accountability of local authorities, improve coordination in the use of foreign loans, and contribute to public debt sustainability and national fiscal discipline.

The on-lending agreements were officially signed by Nguyen Quoc Phuong, director general of the Department of Debt Management and External Finance, together with leaders of the eight people's committees.