The credit package worth $125 million was approved on Friday, marking a strategic shift from investment loans for particular industries to loans that support institutional improvements in localities, Vietnam Plus reported.

The credit package aims to help HCMC address its most pressing urban governance challenges, including land use, waste treatment and public transport, by eliminating institutional barriers.

This program is designed to activate interdisciplinary integrated reforms in important areas for urban development in Ho Chi Minh City.

The loan sets to achieve integrated and transparent spatial information data for urban management; strengthening of public sector asset and debt management; and promoting the provision of priority urban services.

As the city is at the forefront of Vietnam’s economy, and contributing 21 percent to national budget, the loans will not only benefit city, but the country as a whole, the bank said in a release.

Ousmane Dione, Country Director of the World Bank in Vietnam, said HCMC faces many serious urban challenges.

He said: "In order to successfully manage the rapid urban growth process, urban governance needs to be integrated and effective and investment must be made for urban services and infrastructure."