Disbursement of World Bank (WB) loans had increased 55% year-on-year as of September 30, the Ministry of Finance revealed on October 28.

At the conference among ministries, localities and the WB

The WB is a major donor to Vietnam, with more than US$7.3 billion committed to 36 programmes and projects, of which 33 loans worth over US$6.5 billion have gone to agreements. Three others valued at US$506 million have been approved by the International Development Association (IDA) but are yet to be cemented in agreements.

Eight loans will have disbursement completed this year, and 10 others in 2021.

Speaking at an online conference between ministries and localities and the WB, Nguyen Xuan Thao, deputy head of the finance ministry’s debt management and external finance department, noted all projects must observe regulations set by the bank regarding site compensation and resettlement, and procurement and bidding.

All adjustments to agreements must abide by legal regulations on international treaties, she stressed.

Not all WB loans are ready to be disbursed, she went on, adding that five of the 36 loans were undisbursed as of October 15, as investment procedures are yet to be completed or contracts yet to be signed, she explained.

According to the bank, the agreements of 17 of the 31 remaining loans need adjustments due to design changes and disbursement extensions, among other matters.

The finance ministry said that although the disbursement rate of WB loans is higher than it was in 2019, it remains lower than the disbursement of domestic public investment capital.

Deputy Finance Minister Tran Xuan Ha blamed project extensions, agreement and design changes as well as the slow implementation of investment procedures for the low disbursement rate.

There are also mechanisms and procedures that do not match Vietnamese regulations, he added.

To accelerate the disbursement of WB and foreign loans, participants urged relevant agencies to fulfil investment tasks in 2020, while promptly completing project adjustment procedures.

The finance ministry pledged to closely coordinate with centrally-run ministries and agencies as well as localities to review and remove bottlenecks in project building, and to work with development partners to put forth suitable regulations, thus pushing ahead with project implementation and disbursement.