The Asian Development Bank's board of directors has approved a 293 million USD loan to support a 1 billion USD metro rail project in Hanoi.
The new rail link will stretch from the capital's main railway station in Hoan Kiem district to Nhon in Tu Liem district, 12.5 km to the west.
The rail line is scheduled to be completed in 2015. About 150,000 people a day are expected to initially use the line, with the number rising to almost half a million a day by 2030.
There will be 12 stations along the line, the trains of which will travel up to 80 kilometres per hour. Carriages will be able to accommodate up to 900 passengers.
The journey time from start to finish will take an estimated 20 minutes.
Robert Valkovic, the bank's principal transport specialist for Southeast Asia, said a mass-transit system was urgently needed in Hanoi.
The line, which is also being funded by the French government and the European Investment Bank, is one of four planned metro lines in the capital. Under the Hanoi Urban Transport Master Plan, half the city's inhabitants will travel by public transport by 2020.
At the moment, it is estimated that nine out of ten people in the city use private vehicles as their primary means of transport.
Aggravating congestion in Hanoi, more and more of the capital's residents have switched from motorbikes to cars. In addition, the capital's population is expected to balloon from 6 million to 8 million by 2025.
Meanwhile, the bank earlier this year approved a loan for a metro line in HCM City, bringing its total financial support for urban metro development in Vietnam to 833 million USD.