The Decision of the Prime Minister approving the project "The orientation to attract, manage and use ODA and concessional loans of foreign donors in the period of 2021 - 2025"

Published on 16 - 12 - 2021

On 15/12/2021, the Prime Minister issued the Decision No. 2109/QD-TTg approving the project "The orientation to attract, manage and use ODA and concessional loans from foreign donors in the period of 2021 - 2025".

According to the Decision, the Project aims to express the Government's policies to concretize the guidelines of the Party and State in attracting, managing and using ODA and concessional loans of foreign donors to support the implementation of the 10-year socio-economic development strategy 2021-2030 and the 5-year socio-economic development plan for the period of 2021-2025. This project is approved as the basis for sectors and levels to mobilize and use ODA and concessional loans from foreign donors in the period of 2021 - 2025 and for donors to use in the process of making policy, building development cooperation programs with Vietnam at regional, national, ministerial, central and local levels. At the same time, it also aims to make the policy of the Government of Vietnam transparent in attracting, managing and using this capital to the public at home and abroad.

The project has the following main objectives:

- To assess the situation of attracting, managing and using ODA and concessional loans of foreign donors in the period of 2016 - 2020.

- Prospects of economic growth and demand for ODA and concessional loans of foreign donors in the period of 2021 - 2025.

- To update and adjust principles and orientations for attracting and using ODA and concessional loans from foreign donors for new projects in the 2021-2025 period, in particular, clearly defining major direction in attracting foreign loans in the 2021-2025 period.

The solutions to implement the Project are as follows

+ The group of solutions on completing mechanisms, policies and institutions:

- To continue to review mechanisms, policies and legal regulations related to processes and procedures to promptly amend and supplement according to competence or report to competent authorities as prescribed. To strengthen decentralization; ensure uniform, effective, efficient and lawful management.

- To complete the legal framework for mobilizing foreign capital, ensure its effectiveness and efficiency, and comply with domestic laws but taking into account the harmonization of donor policies and international practices in the capital market.

- The Ministry of Planning and Investment shall study and submit to the Government amendments and supplements of a number of articles of the Law on Public Investment and the Law on Bidding related to the use of ODA and concessional loans of foreign donors to facilitate investment preparation and performance of programs and projects.

- In order to promote decentralization to reduce procedures, simplify the provisions of Vietnamese law and harmonize with the policies and regulations of donors, the Ministry of Justice, the Ministry of Finance, the Ministry of Planning and Investment, the Ministry of Foreign Affairs and the State Bank of Vietnam perform assigned tasks under the direction of Permanent Deputy Prime Minister Pham Binh Minh in the Document No. 8304/VPCP-QHQT dated November 12, 2021 of the Office of the Government on the process of receiving, signing, managing and using ODA and foreign concessional loans at the request of the State President.

+ The group of solutions to improve the efficiency of attracting and using ODA and concessional loans from foreign donors:

- To effectively mobilize and use ODA and concessional loans from foreign donors, invest with focus, not scatter, spread, and fragmented; it must be correct, hit the targets, orientations and tasks of socio-economic development and the public investment plan approved by the National Assembly, highly concentrate resources to accelerate the implementation progress; promote the leading and pervasive role of this capital in public investment, as a "prime capital", a "catalyst" to mobilize investment from the non-state sector, create a new space and driving force to promote sustainable socio-economic development.

- To continue to promote coordination and exchange with foreign donors in order to strengthen the mobilization, attraction and effective use of ODA and concessional loans, especially focusing on large-scale projects on socio-economic development, infrastructure connection projects of inter-regional nature, with spillover effects, the ones on climate change response and combat, grants aid in the prevention and control of the COVID-19 pandemic.

- Ministries, sectors and localities need to select projects that must be efficient, ensure that they are in the overall balance of medium-term public investment and medium-term public debt, and suitable to the borrowing capacity of localities.

- To review the programs and projects that are being implemented and agreements have been signed, ensure that adequate capital is allocated for these programs and projects.

- For ODA loans and concessional loans from foreign donors: Make the most of the remaining ODA loans and take advantage of reasonable mobilization of committed concessional loans in the 2016-2020 period as well as as the following years; prioritize mobilizing sources with long loan periods, low interest rates. To focus on disbursing ODA loans, foreign preferential loans for signed loan agreements by the end of 2020 to the period of 2021 - 2025; the mobilization of foreign loans to focus on a number of key areas to ensure maximum promotion of economic efficiency of scale; focus on projects that directly promote growth associated with sustainable development, projects capable of generating foreign currency revenue; projects with spillover effects (such as climate change adaptation, environmental quality improvement, education, health, technology, skills); essential economic infrastructure projects that are not able to recover capital directly. To prioritize loans for on-lending for projects with direct capital recovery; renovate the mechanism of mobilizing ODA loans and foreign preferential loans in the direction of building a number of public investment programs to implement a number of important and pervasive projects throughout the country or in a number of regions according to each prioritizing goals instead of an inefficient, distributed, individual project approach. To gradually shift from lending for programs and projects to the mode of borrowing for budget support to increase the initiativeness and efficiency in using the Government's loans.

In addition, there are other groups of solutions: The group of solutions on organization, administration and promotion of the implementation progress of programs and projects; the group of solutions to promote disbursement of programs and projects; the group of solutions on the performance of programs and projects.

The Decision takes effect from the date of signing.

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