The government and the Asian Development Bank on Monday signed a US$630 million financing facility to help accelerate reforms of state-owned enterprises (SOEs) in the country.
The multi-tranche facility aims to improve the efficiency of SOEs and enhance corporate governance to spur Vietnam's economic growth, the Manila-based bank said in a statement.
ADB said it will provide $600 million from its ordinary capital resources to strengthen the balance sheets of selected SOEs through debt restructuring.
Another $30 million from the Asian Development Fund will be used to support improvements in their operations and corporate governance, as well as their and related institutions' institutional capacity.
The Ministry of Finance will be the executing agency for the program, and the facility is to be utilized by December 2015, the bank said.
Under the financing facility, training and other assistance will also be provided to government institutions involved in the SOE reform process.
The transformation of SOEs in Vietnam started in 1992, but ADB said the process "has been slow and confined mainly to smaller enterprises."
"ADB assistance will support some SOEs to become more efficient, profitable and transparent with better corporate governance," the bank said in its statement.
"Enhancing corporate governance of SOEs is a key for Vietnam to enhance the efficiency of its economy and to achieve higher economic growth through reducing inefficient state production and promoting private sector development," said ADB Country Director, Ayumi Konishi.