The Asian Development Bank (ADB) and the Agence Francaise de Developpement (AFD)will provide funds for the completion of an irrigation and water management project in southern Vietnam.

The ADB Board of Directors will provide a supplementary loan of $60m, while Agence Francaise de Developpement (AFD) will provide a further $25m in cofinancing for the Phuoc Hoa water resources project.

The new ADB loan will supplement the original loan which financed the construction of the Phuoc Hoa transfer canal to divert water from the Be River to a reservoir on the Saigon River.

Along with the AFD loan, the Government of Viet Nam will supply an additional $42.9m, with farmer beneficiaries contributing $3.7m in kind.

The Ministry of Agriculture and Rural Development is the executing agency for the project which is expected to be completed by the end of March 2014 at a total cost of $329.5m.

ADB senior natural resources specialist Dennis Ellingson said the aim of the water project is to provide additional water in the Saigon and Vam Co Dong river basins for developing irrigated agriculture and to supplement existing supplies in Ho Chi Minh City and neighboring provinces.

ADB and AFD had pledged a combined $124m for the initiative which will build irrigation systems and supply water for domestic, municipal and industrial uses, and to develop management skills in government oversight agencies and community water user groups.