A fundamental challenge for Vietnam isto improve the affordability and efficiency ofinfrastructure investment. The fragmentation of publicinfrastructure investment results in duplication and waste,and is a major underlying cause of investment inefficiency.Bond issuance has been the most prominent form of debtfinancing at the sub-national level. At the provinciallevel, significant disconnects exist between total plannedinvestment needs in infrastructure, and the effective demandfor such investment. The success of any initiative toimprove the financing of municipal infrastructure in Vietnamhinges on advances in the broader landscape of policy reformas part of the country's long-term development. Meetingthese challenges requires a comprehensive approach thataddresses issues of governance, financing, and execution.This report has been formulated with the objective ofinforming the Government of Vietnam (GOV) on how thefinancing framework for municipal infrastructure in thecountry can be strengthened. It is based on an assessment ofthe constraints and opportunities that sub-nationalgovernments face in accessing financing for infrastructuredevelopment. It also draws upon lessons and good practicesfrom international experience in this area, consideringtheir relevance for Vietnam. A set of recommendations andimplementable actions is provided, recognizing the broadercontext of ongoing reforms that are needed on institutions,incentives and the availability of information.
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