The new regulations on management and use of ODA and concessional loans

Published on 20 - 12 - 2021
100%

On 16/12/2021, the Government issued the Decree No. 114/2021/ND-CP on the management and use of official development assistance (ODA) capital and concessional loans from foreign donors.

Accordingly, non-refundable ODA capital is prioritized to implement programs and projects on the socio-economic infrastructure development; strengthen ability; support the policy, institutional construction and reform; prevent, combat and reduce the natural disaster risks, disaster relief, and epidemic prevention; adaptation to climate change; green growth; innovation; social security; prepare investment projects or co-finance projects using concessional loans in order to increase the concessional component of loans.

ODA loans are prioritized to use the programs and projects in the fields of health, education, vocational education, climate change adaptation, environmental protection, and essential economic infrastructure that are not able to directly return the capital.

Concessional loans shall be prioritized to use the on-lending programs and projects in accordance with the law on on-lending of ODA loans and foreign concessional loans of the Government; programs and projects under the expenditure tasks of the state budget in the field of socio-economic infrastructure development.

Other priority cases shall comply with the Prime Minister's decision on orientations for attraction, management and use of ODA and concessional loans from foreign donors from time to time.

The Decree clearly states the contents of State management of ODA and concessional loans, including: Formulating, promulgating and conducting legal documents on the management and use of ODA and concessional loans; formulating and performing a scheme to attract, manage and use ODA and concessional loans for each period to support the implementation of the 5-year socio-economic development plan; the solutions and policies for effective management and use of these capital sources; monitoring and providing information on the management and use of ODA and concessional loans; supervising, evaluating, examining and inspecting the situation and results of management and use of ODA and concessional loans in accordance with law.

On basic principles in State management of ODA, concessional loans, ODA loans, they are used for development investment expenditures, not for recurrent expenditures; not use foreign loans for training and capacity raising activities, except for the case of technology transfer, equipment and machinery operation skills; do survey; pay taxes, pay fees and interest on loans; procurement of automobiles, except for the special ones decided by competent authorities; backup supplies and equipment for operation after the project is completed, except for a number of the special one decided by competent authorities in accordance with law; the compensation, support and resettlement costs; operating expenses of the Project Management Board.

The Government shall unify in State management of ODA and concessional loans on the basis of ensuring the efficiency of capital use and debt repayment capacity; implement decentralization associated with responsibilities, powers and capacities of ministries, central agencies and localities; ensure coordination in management, supervision and evaluation of relevant agencies in accordance with current provisions of law.

To ensure the publicity, transparency and promote accountability in policies, order and procedures for mobilization, management and use of ODA and concessional loans among sectors, fields and localities, the performance status and results of using ODA and concessional loans.

To disclose the information on cooperation policies and priority areas of foreign donors on the Government's portal system (chinhphu.vn; mpi.gov.vn; mof.gov.vn; mofa.gov.vn).

To prevent corruption, loss and waste in the management and use of ODA and concessional loans, prevent and handle these acts in accordance with law.

The method of determining development investment expenditure items belonging to the State budget: The determination of expenditure items for development investment shall comply with the provisions of the Law on Public Investment, the Law on State Budget, the Law on Construction and relevant legal documents.

The Decree also clarifies the principle of applying the domestic financial mechanism to ODA and concessional loans. Specifically, for programs and projects under the spending tasks of the central budget: Allocate all ODA loans and foreign concessional loans from the central budget.

For investment programs and projects under the expenditure tasks of the local budget: On-lending part or all of ODA loans or foreign concessional loans in accordance with the law on on-lending of ODA loans and foreign concessional loans of the Government.

For programs and projects under the expenditure tasks of the local budget using ODA loans or foreign concessional loans as part of the State capital participating in public-private partnership (PPP) projects: ODA loans, foreign concessional loans in accordance with the law on on-lending of ODA loans and foreign concessional loans.

For programs and projects with the ability to recover capital in whole or in part: On-lending all or part of ODA loans or foreign concessional loans from the central budget in accordance with the law on on-lending of foreign loans of the Government.

For non-refundable ODA, including non-refundable ODA attached to the loan, non-refundable ODA capital for investment projects, technical assistance projects (independent, preparation, support for project implementation), non-projects: Apply the full allocation mechanism.

The Government assigned the Ministry of Planning and Investment to assume the prime responsibility for drafting development cooperation strategies and policies with foreign donors; the orientations for attracting, managing and using ODA and concessional loans from foreign donors; assume the prime responsibility for drafting, submitting for promulgation or promulgating legal documents on the management and use of ODA and concessional loans according to its competence.

At the same time, assuming the prime responsibility for determining capital needs for development investment from ODA and concessional loans; synthesizing and submitting to the Prime Minister the proposals for programs and projects using ODA and concessional loans; assuming the prime responsibility for, and coordinating with relevant agencies in appraising capital sources and the ability to balance capital for investment projects using ODA or concessional loans;

The Ministry of Planning and Investment shall summarize and submit it to the Prime Minister for consideration and decision on investment policies in programs and projects funded by ODA or concessional loans within the competence of the Prime Minister, except for the projects in group A; send official written notices to foreign sponsors of the approved program/project proposal, the decision on investment policies for the program/project and request for funding consideration.

To summarize and submit to the Prime Minister for consideration and decision of the policy of implementing technical assistance projects and non-refundable ODA projects under the decision competence of the Prime Minister; send official written notification to foreign sponsors about approved projects and non-projects and request consideration for funding after policy implementation, technical assistance, non-project documents decided by the competent authority.

This Decree takes effect from the date of signing and promulgates and replaces the Decree No. 56/2020/ND-CP dated May 25, 2020 of the Government on the management and use of official development assistance (ODA) and concessional loans from foreign donors.

Latest new

The Official Telegram on continuing to implement drastically and effectively the national target...(05/08/2022 10:07 SA)

The Official Telegram on strengthening the market inspection and supervision to ensure the...(01/08/2022 2:13 CH)

The Decision of the Prime Minister approving the Strategy for the development of mechanization of...(28/07/2022 9:48 SA)

The Circular guiding the management and use of state budget funds to ensure the international...(27/07/2022 8:05 CH)

The Decision of the Prime Minister approving the project "Improving the effectiveness of external...(22/07/2022 3:01 CH)

The Resolution of the Government on the development of a safe, transparent, efficient and...(19/07/2022 5:57 CH)

The Notice inviting interest in an investment project using land(19/07/2022 4:49 CH)

The Plan to launch emulation movement "Promoting attraction and effective use of investment...(18/07/2022 2:50 CH)

°
688 online users