ADB and Viet Nam Partner on $60M Project to Boost Resilient Infrastructure for Ethnic Minority Communities

One of the most innovative components of the project is the integration of modern technology to support climate adaptation and disaster preparedness.

The Asian Development Bank (ADB) and the Government of Viet Nam have formalized a $60 million financing agreement aimed at upgrading and constructing transport and water supply infrastructure in five upland districts within the central coastal provinces of Phu Yen and Quang Tri. These districts, which are home to some of the highest concentrations of ethnic minority communities in the region, will benefit from improved resilience to climate change and enhanced connectivity and access to basic services.

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

The financing package supports the implementation of the Climate Resilient Inclusive Infrastructure for Ethnic Minority Project II, which builds upon previous efforts to enhance infrastructure in underserved areas of Viet Nam. The new phase will upgrade approximately 133 kilometers of district and commune roads to meet climate-resilient design standards, significantly improving access to markets, schools, and healthcare facilities. In addition, the project will upgrade and expand rural water supply systems, helping to ensure clean and reliable water access for local communities.

One of the most innovative components of the project is the integration of modern technology to support climate adaptation and disaster preparedness. A $1 million grant from ADB’s High-Level Technology Fund will be used to procure and install advanced data systems for climate and disaster risk management. These systems will provide real-time weather and climate data, bolstering early warning capabilities and disaster response mechanisms across the region.

The overall package includes $59 million in concessional ADB loans, complemented by $1 million in grant funding. Furthermore, the Government of Viet Nam is contributing an additional $19.74 million to the project, reflecting a strong national commitment to inclusive development and climate resilience.

ADB’s Country Director Shantanu Chakraborty emphasized the broader significance of the project:

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

Bridging Development Gaps in Vulnerable Regions

Although Viet Nam’s economy demonstrated a robust rebound with 7.1% growth in 2024, disparities remain stark between coastal urban centers and upland rural districts, particularly those with high ethnic minority populations. These areas continue to struggle with outdated and incomplete road networks and unreliable water supply systems. These infrastructure gaps limit access to economic opportunities, public services, and markets, thereby perpetuating cycles of poverty and marginalization.

Additionally, the central coastal region is increasingly vulnerable to extreme weather events such as floods, droughts, and typhoons. The impact of these events on already fragile infrastructure has raised the cost of repairs, disrupted livelihoods, and strained community resilience. The project directly addresses these issues by integrating climate-adaptive design and strengthening the capacity of local authorities and communities to respond to climate-related challenges.

Empowering Communities and Driving Inclusive Growth

The Climate Resilient Inclusive Infrastructure for Ethnic Minority Project II is expected to directly benefit approximately 363,000 people, including around 187,000 individuals from ethnic minority groups. These improvements will provide long-term socioeconomic benefits, including improved access to education, healthcare, clean water, and economic opportunities.

Beyond infrastructure, the project also places a strong emphasis on inclusive participation. Community engagement and capacity-building activities will ensure that the voices of ethnic minority residents are incorporated into planning and implementation processes, helping to tailor solutions to local needs and strengthen ownership and sustainability.

Looking Ahead

The ADB and the Government of Viet Nam continue to collaborate on strategic initiatives aimed at reducing poverty, building climate resilience, and promoting inclusive growth. The new financing package underscores this shared commitment and represents a model for targeted infrastructure development that addresses both climate challenges and social inclusion.

As Viet Nam looks to the future, investments in resilient and inclusive infrastructure such as this project will be critical to bridging development gaps, safeguarding communities, and unlocking the full potential of its diverse population.