ADB and Viet Nam Launch $60M Project to Boost Climate-Resilient Infrastructure in Ethnic Minorities

The financing agreement was signed at Ha Noi’s National Convention Center by Deputy Minister of Finance Tran Quoc Phuong and ADB Country Director for Viet Nam Shantanu Chakraborty.

The Asian Development Bank (ADB) and the Government of Viet Nam have formalized a $60 million financing package aimed at developing climate-resilient and inclusive infrastructure across five upland districts in the central coastal provinces of Phu Yen and Quang Tri. This strategic initiative targets regions with the highest concentration of ethnic minority communities, where infrastructure gaps have long hindered socio-economic development.

The financing agreement was signed at Ha Noi’s National Convention Center by Deputy Minister of Finance Tran Quoc Phuong and ADB Country Director for Viet Nam Shantanu Chakraborty. The ceremony was witnessed by ADB Vice-President for East and Southeast Asia and the Pacific Scott Morris and Viet Nam’s Minister of Finance Nguyen Van Thang.

Climate Resilient Inclusive Infrastructure for Ethnic Minority Project II

Named the Climate Resilient Inclusive Infrastructure for Ethnic Minority Project II, this comprehensive development effort seeks to enhance the resilience of communities increasingly affected by climate change and natural disasters. The project includes:

• Upgrading 133 kilometers of district and commune roads using climate-resilient engineering standards to ensure long-term durability and accessibility.

• Construction and rehabilitation of rural water supply systems, helping to provide clean, reliable water sources for daily use and agricultural productivity.

• Deployment of advanced weather and climate data systems to support early warning systems and disaster preparedness, funded through a $1 million grant from ADB’s High-Level Technology Fund.

In total, the project is expected to directly benefit approximately 363,000 people, including 187,000 individuals from ethnic minority groups, who have historically been marginalized in infrastructure development.

Reducing Vulnerability and Promoting Inclusive Growth

“This project is a significant step towards enhancing the resilience and inclusiveness of rural infrastructure in Viet Nam’s central coastal region,” said Mr. Chakraborty during the signing. “It will not only improve the quality of life for ethnic minority communities but also contribute to the sustainable economic development of the region.”

Viet Nam's economy saw a robust rebound in 2024, achieving a 7.1% growth rate. Despite this national progress, regional disparities remain stark. Coastal districts benefit from robust economies and better infrastructure, while upland and mountainous districts—home to a large share of ethnic minority populations—continue to face structural challenges including:

• Poor-quality and incomplete transport networks

• Limited access to safe water supply

• High exposure to climate-related disasters such as floods, typhoons, and prolonged droughts

• Economic isolation and reduced livelihood options, especially in agriculture-based communities

The new infrastructure investments are specifically designed to narrow these gaps by improving connectivity, access to essential services, and the communities' capacity to respond to climate risks.

Blended Financing Model

The financing package includes:

• $59 million in loans from the ADB

• A $1 million grant from ADB’s High-Level Technology Fund

• $19.74 million in counterpart financing from the Government of Viet Nam

This blended financing approach allows Viet Nam to leverage external expertise and innovation while maintaining national ownership and alignment with its development priorities.

Technology and Innovation for Risk Management

The $1 million grant from the High-Level Technology Fund will be allocated to the installation and integration of advanced data systems to monitor weather patterns, enhance risk mapping, and streamline disaster response. This component aims to strengthen Viet Nam’s adaptive capacity in remote areas, where traditional warning systems are often insufficient or inaccessible.

Building a More Equitable Future

The project represents more than an infrastructure upgrade—it is a strategic investment in social equity and climate resilience. By focusing on regions where ethnic minority communities live, the ADB and Viet Nam are signaling a strong commitment to inclusive development and sustainable progress.

Construction is expected to begin later this year, with completion targeted over the next five years. Once operational, the enhanced infrastructure will not only improve day-to-day life for residents but also stimulate local economies, reduce disaster-related vulnerabilities, and ensure that no community is left behind in Viet Nam’s growth journey.