The Climate Resilient Inclusive Infrastructure for Ethnic Minorities Project will be undertaken in Binh Dinh and Quang Nam, with a focus on remote upland districts with large ethnic minority populations.

It will help upgrade 122 kilometers (75.8 miles) of roads using climate-resilient design standards, lay 115 kilometers of water pipelines and provide reliable weather and climate data in a timely and cost-effective manner.

"The project aims to improve the living conditions of ethnic minority communities in remote areas of Vietnam," ADB programs officer Hong Anh Nguyen said in a statement on Thursday.

"It will better link remote rural production sites with markets and processing facilities for crops such as acacia and boost beneficiaries’ access to health, education and market services. The project will also expand access to safe water supply and irrigation."

It is expected to benefit 243,000 people, including 126,300 belonging to ethnic groups.

The financing package includes $58 million in regular loans and a $2-million grant from ADB’s High-Level Technology Fund. The latter will fund the supply and installation of data systems for climate risk management.

The government will provide $21.73 million in counterpart funds.

Vietnam’s economy grew 7 percent on average from 2016 to 2018, but slowed to 2.9 percent in 2020 due to the Covid-19 pandemic.

Significant gaps exist between the economically booming coastal communities and the interior upland areas with a high ethnic minority population, according to the ADB.

"About 87 percent of the ethnic minority households in Binh Dinh and 55 percent in Quang Nam are poor or near poor, compared with the provincial poverty rates of 5.5 percent and 10.3 percent."

These areas are challenged by low-quality, fragmented transport and water supply infrastructure. Most of the ethnic minority communities are isolated during the rainy season, cut off by flooded roads in hilly or mountainous terrain.

Less than 60 percent of households in the project area have access to reliable and safe water supply. This limited access to water and poor sanitation have led to high incidence of waterborne diseases and poverty.

Vietnam faces a high risk of disasters and climate change. It suffers estimated annual losses of $2.37 billion from natural disasters, especially floods.

Last year central Vietnam was struck by a series of storms and tropical depressions that caused heavy rains, flooding and landslides.

More than 200 people were killed and property losses amounted to around VND30 trillion ($1.3 billion). Hundreds of thousands of homes were destroyed or damaged, affecting the lives of at least 7.7 million people.

Quang Nam was among the provinces hit hardest.