An agreement to this effect was signed yesterday by representatives of the ADB and the State Bank of Viet Nam .—VNS Photo

HCM CITY (Biz Hub)— The Asian Development Bank will provide a loan package of US$500 million for HCM City to build its Metro Line No 2 (MRT2).

An agreement to this effect was signed yesterday by representatives of the ADB and the State Bank of Viet Nam (SBV).

This is the second loan package for construction of a 11.3-km section of MRT2, which will run from Ben Thanh Market in District 1 through Tan Son Nhat Airport to Tham Luong in District 12. The section will have 11 stations.

Metro Lines in HCM City.

Nguyen Huu Tin, Deputy Chairman of the HCM City People's Committee, said MTR2 will be 20km long in total, starting from the Thu Thiem Area in District 2 and ending at the Tay Ninh Bus Station.

Construction of the line will be undertaken in two phases. The first one will cover the section from Ben Thanh Market to Tham Luong; and the second will cover two sections - from Ben Thanh to Thu Thiem and Tham Luong to the Tay Ninh Bus Station, said Tin.

The first phase requires an investment of around $1.38 billion, which will be sourced through loans from the ADB ($540 million), the German Development Bank (240.75 million euros or $313 million) and the European Investment Bank (150 million euros or $195 million). The Vietnamese Government will provide counter capital of $326.5 million.

Agreements for the project's first loan packages were signed in 2011 between the same parties.

Speaking at yesterday's signing ceremony, SBV Governor Nguyen Van Binh appreciated ADB's support for urban transportation development in HCM City.

The city authorities should be determined in implementing the project, especially in site clearance, in order to avoid contruction delays that would make the loans less effective, Binh said.

Tomayuki Kimura, Country Director of ADB's Viet Nam Resident Mission, praised the decision of the Vietnamese Government and the HCM City administration to invest in the development of rapid mass passenger transport systems in HCM City.

TRT2 project should significantly reduce traffic congestion and accidents, promote low carbon emissions.—Photo taudienngam

He said this was based on the recognition of challenges posed by the unwieldy development of individual means of transportation, including traffic congestion and accidents.

The project to develop the metro system will help Viet Nam become one of first countries in the region to address climate change impacts by using means of transport which discharge less carbon gases, Kimura said.

HCM City residents will also benefit from cheaper and more efficient public transportation services, he added. —VNS