WB approves $107 million loan for southern waterway corridor project

The WB said the credit is intended to improve the capacity, efficiency and safety of inland waterways in southern Vietnam, while reducing greenhouse gas emissions in the country's transport sector.

According to the World Bank, the Mekong Delta in southern Vietnam is Vietnam’s leading agricultural and aquaculture region for both domestic consumption and export. The Southern Region Waterway and Logistics Corridor Development Project aims to increase cargo volumes and reduce travel times along the key East-West and North-South corridors.

The project will also connect Vietnam's key manufacturing hubs with the country's main deep-water port, enhancing export competitiveness.

The World Bank has approved a credit of 107 million USD for the Southern Region Waterway and Logistics Corridor Development Project (Photo: illustration).

“Vietnam’s southern waterways have enormous potential as a cheaper, greener, and safer transport alternative,” said Mariam Sherman, World Bank Country Director for Vietnam, Cambodia, and Laos.

This project directly supports Vietnam’s ambitious goals: to enhance the competitiveness of inland waterway transport, reduce carbon emissions in the transport sector and ultimately enhance the country’s trade competitiveness.”

Accordingly, the East-West corridor upgrade will reduce the shipping distance between the largest port in the Mekong Delta in Can Tho and the largest port in Vietnam in Ho Chi Minh City by about 30%. The North-South corridor improvement will directly connect the Mekong Delta and the hinterland with Vietnam’s main deep-water port. This will help increase international trade competitiveness, reduce emissions and logistics costs.

On the other hand, shifting more freight to inland waterways is crucial to reducing carbon emissions in Vietnam’s transport sector, as road transport accounts for about 80% of greenhouse gas emissions from Vietnam’s transport sector, emitting six times more carbon dioxide than waterways.

The project also introduces navigation aids and equipment to help navigate sharp bends on waterways, thereby improving safety.

The project is also expected to benefit farmers, businesses and their employees, ship operators and people across southern Vietnam.

"The project is in line with the World Bank's goal of promoting shared prosperity on a livable planet. The World Bank's Vietnam Climate and Development Country Report (2022) considers inland waterway transport as one of the most impactful measures to reduce greenhouse gas emissions in Vietnam's transport sector," the WB said in a statement.

According to the World Bank, the Southern Waterway and Logistics Corridor Development Project has a total cost of about 168 million USD, including capital from the World Bank and non-bank sources worth millions of USD. The World Bank has approved a loan of 107 million USD.

The project has three components: Component one is to select sections of the East-West waterway corridor to renovate and upgrade the infrastructure of congested locations, meeting Vietnam's level II inland waterway standards, allowing ships with a capacity of up to 600 tons and 3-layer container ships to move full-time and ships with a capacity of up to 1,500 tons to move at high tide. This corridor has a total length of about 197km, covering the inland waterway corridor of the Mekong Delta region, connecting Can Tho port with Ho Chi Minh City port with the shortest distance.

The second component is to select sections of the North-South waterway corridor and renovate congested infrastructure locations of the corridor to accommodate vessels up to 5,000 tonnes and four-layer container ships. Finally, the third component is to support project implementation.

Source: https://www.baogiaothong.vn/wb-phe-duyet-khoan-vay-107-trieu-usd-cho-du-an-hanh-lang-duong-thuy-phia-nam-192240622112214866.htm