Representatives of the bank signed a memorandum of understanding with Mr Nguyen Huu Tin, vice-chairman of the municipal's people's committee in the city on March 13.

The $US 857m initial phase involves construction of the 8.8km section from an interchange with Line 1 at Cua Sai Gon to Bay Hien on Line 2 in Tan Binh district.

In the longer-term the line will be extended 8.2km south to Ben xe Can Guoc. With the completion of this phase, Line 5 will have capacity for around 526,000 passengers per day.

Construction is already underway on Lines 1 and 2, which are both due to be completed in 2017, with the ADB and EIB providing finance for Line 2.