Japan signed an agreement on Monday to provide 64.89 billion yen ($704 million) in soft loans for Vietnam to fund infrastructure construction among other things, a Vietnamese ministry said.
The funds will be used to build a road, a coal-fired power plant and small-scale infrastructure development as well as to promote energy recycling and fund small and medium-sized businesses, the Planning and Investment Ministry said in a statement.
Planning and Investment Minister Vo Hong Phuc and Japanese Ambassador Sakaba Mitsuo signed the agreement in Hanoi, the statement said, without giving the terms of the loans.
Tokyo suspended official development assistance to Vietnam in August 2008 over a corruption case but the Japanese foreign ministry said in February that Tokyo would resume aid after Vietnam detained two officials, who received jail terms last month.
Vietnam is expected to sign another agreement to borrow 55 billion yen from the Japanese government on Nov. 10 in Tokyo to help it overcome the economic crisis, the online Science and Life site (www.bee.net.vn) reported on Monday.
Last week Vietnam's central bank said Vietnam would borrow $1 billion annually from Japan in 2010-2012 to shore up its foreign exchange reserves.