“Next month, Japan and Vietnam will sign an ODA grant worth US$650 million,” he said on August 26.

Japanese Ambassador to Vietnam Mitsuo Sakaba.

The Japanese Ambassador refused to disclose the specific figure for the year but he said that signings of ODA packages between the two countries would be conducted several times. The Japanese ODA will be disbursed in two steps: Japan will give ODA capital to the State Bank of Vietnam (SBV) and SBV will allocate the capital to commercial banks.

Apart from the $800 million ODA grant committed in April 2009, Japan’s total ODA to Vietnam as of September is higher than the record level set in 2007, which was $1.1 billion.

Ambassador Sakaba said that Japan’s ODA for Vietnam this year is very high because besides the annual ODA grant, Japan has provided more capital to Vietnam to support its economic stimulus packages.

“Japan’s ODA for Vietnam in 2009 still focuses on key infrastructure projects, such as building roads, bridges and airports,” he said. “However, the capital will also be used to support other fields like environmental protection and energy conservation.”

According to the Japanese Ambassador, beneficiaries of the additional ODA grant will be small- and medium-size enterprises (SMEs) eligible under the Vietnamese government’s economic stimulus policy.

Japan’s assistance to SMEs is mainly for developing supporting industries.