Vietnam targets over $5.5bn in foreign loans for infrastructure in 2026 amid lagging disbursement

Speaking at a meeting of the National Steering Committee on Official Development Assistance (ODA) and Concessional Loans in Hanoi on Friday, Deputy Minister of Finance Tran Quoc Phuong said ODA and concessional foreign loans would continue to play an important role in Vietnam’s overall development investment.

In allocating this foreign capital, priority will be given to large-scale projects, including key infrastructure works, that generate strong spillover effects and support broader economic growth.

He noted that in December last year, Vietnam broke ground on and inaugurated 234 infrastructure projects with a combined investment of VND3,400 trillion (about $129.3 billion), of which 18 percent came from state funding and the remainder from private and other sources.

In 2026, Vietnam is expected to mobilize foreign loans totaling about VND146.28 trillion ($5.56 billion) to meet funding needs for the implementation of a number of major national infrastructure projects.

Phuong warned, however, that disbursement of the foreign funding has been slow.

During 2025, Vietnam secured $624 million in new ODA and concessional loans for 10 projects, a level comparable to the preceding year.

However, only 35.27 percent of this funding was disbursed, down from the rate recorded a year earlier, Phuong said.

Among ministries and central agencies, the 2025 foreign capital disbursement rate reached 46.02 percent.

Phuong attributed the slower disbursement to a range of factors, including delays in project preparation.

Land clearance, resettlement, verification of land origin, land pricing, and forest land-use conversion remained among the most significant bottlenecks.

Progress was also hampered by delays in securing approvals or non-objection opinions from development partners for bidding documents and related dossiers.

External challenges, including shortages of construction materials, rising input costs, and the impact of extreme weather events, natural disasters, storms, floods, and landslides in some localities, continued to weigh on construction progress and capital disbursement.

In addition, several projects faced setbacks related to bidding procedures, contract signing, tax issues, or ongoing adjustments to investment policies, loan agreements, and capital plans.

Institutional constraints were also cited, as procedures for negotiating, signing, amending, and extending loan agreements remained time-consuming.

To address these challenges and boost foreign funding disbursement, Vietnam has, since October 2025, approved and issued a series of new legal regulations related to ODA and concessional foreign loans, the Vietnam Government Portal cited Phuong as saying.

One notable move was the passage of the revised Law on Public Debt Management, which took effect on January 1, 2026.

The amended law introduces fundamental changes to the loan proposal process, simplifies procedures and documentation, cuts red tape, and strengthens decentralization and delegation of authority in negotiating and signing international agreements on ODA and concessional loans.

According to the finance ministry, an orientation plan on mobilizing, managing, and using ODA and concessional loans for the 2026–30 period is being finalized for submission to the prime minister.

Under the plan, total ODA and concessional loans to be mobilized over the five-year period are estimated at around $38 billion.

The plan reaffirms that such funding will remain a key source of development investment, with priority given to major infrastructure projects that create breakthroughs, generate strong spillover effects, and drive development transformation at national, regional, and local levels.