The UK has pledged to provide Vietnam with £70 million (US$114 million) non-refundable aid by 2015 to bolster growth and tackle corruption under an agreement signed Thursday in Hanoi.
The grant aims to help Vietnam reach the Millennium Development Goals, which were adopted by world leaders under the direction of the UN.
Using this aid, Vietnam wants to achieve inclusive and low-carbon growth led by the private sector which will help reduce poverty. In addition, the government will strengthen efforts to tackle corruption and enhance accountability.
The signing of the agreement - an amendment to the existing Development Partnership Arrangement (DPA) between Vietnam and the UK - came after the launch of the Strategic Partnership between the two governments last September.
At the signing ceremony, Alan Duncan, UK Minister of State for International Development, announced that the UK will replace Sweden as Vietnam's leading donor on the field of anti-corruption.
The UK will coordinate the cooperation between developed partners in order to support Vietnamese government in the fight against corruption, he explained.
Duncan had previously made field trips to two UK-funded projects in Vietnam - the semi-washed robusta coffee station in Dak Lak Province and a pilot project to grow Vetiver grass to prevent seashore erosion in Phu Yen Province.
The UK and Vietnam entered into the ten year DPA in 2006. The UK has by far provided over $619 million to Vietnam through the bilateral program.
In addition, around $31 million in debt relief has been granted to Vietnam through the Multilateral Debt Relief Initiative for humanitarian efforts since 2006.