The funds will be used for projects to build infrastructure facilities for the poor, energy production, recycling, a street link to Can Tho Bridge and a thermal power plant in the northern Thai Binh Province. Small and medium scale businesses will also benefit from the funds.

The energy project will be lent in Yen at 0.25 percent rate a year for 40 years with a 10-year grace period while the other four loans will carry an interest rate of 1.2 percent per year for 30 years with a 10-year grace period.

Tsuno Motonori, chief representative of Japan International Cooperation Agency in Vietnam, said ODA funding to Vietnam this year is expected to go past the $1 billion promised a year ago and reach a record high of 183 billion yen, or $2 billion.

Besides a similar amount for phase two of the fiscal year, the Japanese government has promised $598.7 million in emergency loans and assistance for Vietnam’s poverty alleviation efforts.

Motonori said the figures proved Japan’s interest in Vietnam as a strategic partner and that Japan has started to recognize Vietnam efforts to improve the legal environment to use and manage ODA fund effectively, as also in resolving the “PCI” corruption case last year.

Ho Chi Minh City senior transport officials were found guilty of abusing their power after renting an office to Tokyo-based Pacific Consultants International (PCI) from August 2001 to November 2002 while working on the East-West Highway project without reporting the lease.

Japan, Vietnam’s largest donor, suspended aid temporarily in August 2008 after the corruption case broke out.

Huynh Ngoc Si, former deputy head of the city Transport Department and former head of the project, was sentenced to three years in jail for abusing power and his deputy, Le Qua, to two years for the same charge.

Reported by Truong Son