The World Bank approved Friday a US$200 million loan for an ongoing program to provide clean water and improve sanitation in eight Vietnamese provinces.
The National Target Program for Rural Water Supply and Sanitation seeks to provide water for 1.7 million people and sanitation for 650,000 people in the Red River Delta.
The bank will use a new approach that links funds directly with results, ensuring that benefits will be delivered to people in need.
"Vietnam has made impressive progress in economic growth and poverty reduction, but more needs to be done to reduce rural poverty," Victoria Kwakwa, World Bank Country Director for Vietnam, said.
"Better access to safe water and sanitation ... will help ensure that the quality of life for people in rural communities improves, which is important for sustainability and equity of growth in Vietnam."
The new financing instrument, called the Program for Results (PforR), will be used for the first time in the East Asia and Pacific region.