Prime Minister Shinzo Abe said Japan will provide an additional US$1.4 billion of loans, which will raise its total pledges to Vietnam in the fiscal year to $2.5 billion.
The announcement was made during a meeting between Abe and Vietnamese PM Nguyen Tan Dung at the ASEAN summit in Kuala Lumpur on Friday.
Abe said the new loans will be given to a thermal power project in the northern province of Thai Binh, a water cleanup project in Ho Chi Minh City, and the first line of the city’s metro system. The metro project is facing a cost overrun due to delays.
The money will raise Japan’s official development assistance, or ODA, to Vietnam to a record high.
Japan has been Vietnam’s biggest donor by offering hundreds of millions of dollars in development loans every year. There were short hiatuses in funding due to bribery scandals related to ODA-funded projects in previous years.
The prime ministers also pledged strong cooperation in infrastructure development, agriculture, education, nuclear power as well as maintaining peace and freedom of navigation in the East Sea.