The loan will fund the government’s ongoing five-year (2016-2020) climate change response program.

A World Bank release Friday said that the loan aims at increased protection of water sources and improving water use efficiency.

It will also help improve climate smart landscape planning, particularly for forests and the Mekong Delta and support policy changes to reduce vehicle emissions through more stringent standards.

Vietnam aims to cut greenhouse gas emissions by 8 percent between 2020 and 2030.

The loan will also help enhance incentives to increase wind generation capacity.

"The new development financing will focus on areas which present the greatest opportunities for transformational interventions to address climate change challenges," said Ousmane Dione, World Bank Country Director for Vietnam.