The Asian Development Bank's (ADB) Board of Directors has approved a $293 million loan to support a $1 billion metro rail project in Ha Noi.

The new rail link will stretch from Ha Noi's main railway station in Hoan Kiem district to Nhon, in Tu Liem district, 12.5 km to the west. Nine out of ten people in congested Ha Noi use private vehicles as their primary means of transport, with the remainder relying primarily on buses.

As Viet Nam's economy continues to grow, many of Ha Noi's residents are switching from motorbikes to cars. This trend, coupled with the fact that the capital's population is expected to balloon from six to eight million people by 2025, threatens development and the environment.

"If Ha Noi doesn't develop quality, high-volume public transportation systems the city will slowly grind to a standstill over the next decade," said Robert Valkovic, ADB's Principal Transport Specialist for Southeast Asia. "The metro is essential to Ha Noi's future."

The ADB-supported rail line is scheduled to be completed in 2015. Over 150,000 people a day are expected to use it initially, with the number rising to almost half a million a day by 2030.

The line, also funded by the Government of France and the European Investment Bank, is one of four priority metro lines planned for the capital's metropolitan area. Ha Noi's Urban Transport Master Plan aims to get half the city using public transport by 2020.

ADB already approved a separate loan in support of a metro line in Ho Chi Minh City earlier this year, bringing ADB's total support for urban metro rail development in Viet Nam to $833 million.