The Government agreed today to cancel all of Vietnam’s NOK 35 million debt to Norway. In return, the Government of Vietnam has agreed to mobilise an equivalent amount, in local currency, for expenditures related to development and poverty reduction. The funds thus mobilised will be allocated within a two-year period to a programme undertaken in Vietnam by the International Fund for Agricultural Development (IFAD) in co-operation with the Vietnamese Government.

Vietnam is the fifth country to have its entire debt to Norway cancelled, following Benin, Tanzania, Ghana and Senegal.

In keeping with the Norwegian Plan of Action on Debt Relief for Development, the debt will be cancelled without taking any funds from the aid budget. Thus, the debt relief will be additional to official development assistance, and will not entail any reduction in aid to poor countries.