The World Bank on Thursday approved a US$682 million loan for Vietnam to support the country in power sector reforms, poverty alleviation, health care and infrastructure development.
It is the second loan from the International Bank for Reconstruction and Development, the World Bank's low-interest lending arm, following a $500 million loan in December last year.
The loan was approved in "affirmation of Vietnam's remarkable progress towards Middle Income Country status", the Washington-based lender said in a statement.
"Vietnam's development story is an inspiration for countries beyond East Asia," Jim Adams, World Bank Vice President for the East Asia Pacific region, said in the statement.
"The challenge now is to ensure quality growth and stabilize the macro-economy. The Bank's programs in infrastructure and human development will support important reforms in improving efficiency, sustainability and cleaner growth in the short term, while creating necessary conditions for longer term growth."
Of the total loan, $312 million will assist power sector reforms in four main areas development of a competitive power market, power sector restructuring to offer customers more choice in services, electricity tariff reform and improving energy efficiency.
Funding will also go to four other projects, including poverty reduction projects in the northern region and an environmental sanitation project in Ho Chi Minh City, the bank said.