The Government promulgates a Decree amending on on-lending of ODA loans and foreign preferential loans of the Government

Published on 17 - 08 - 2021
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On 16/8/2021, the Government has just issued the Decree No. 79/2021/ND-CP amending and supplementing a number of articles of the Decree No. 97/2018/ND-CP dated June 30, 2018 on on-lending of ODA loans, foreign preferential loans of the Government.

Specifically, the Clause 3, Article 16 is amended and supplemented as follows: The value of the loan security property is at least equal to 120% (one hundred and twenty percent) of the outstanding re-loan balance in the case of on-lending to enterprises and equal to 100% (one hundred percent) of the outstanding re-loan balance in the case of on-lending to public non-business units. During the implementation of the on-lending, in case the value of the loan security property decreases lower than the above-said level, the sub-borrower is responsible for supplementing the loan security asset to ensure the maximum level.

Amendment to Clause 1, Article 21, the on-lending rate for provincial-level People's Committees: For localities where the proportion of additional balance from the central budget to the total balancing expenditures of the local budget is 70% or more, the on-lending rate decreases from 30% according to the old regulations to 10% of ODA, concessional loans. For localities where the proportion of additional balance from the central budget to the total balancing expenditures of the local budget is from 50% to less than 70%, the on-lending rate is 30% of ODA, concessional loans.

Localities have a proportion of additional balance from the central budget to the total expenditure to balance the local budget from 50% to less than 70%, the on-lending rate is 30% of ODA, concessional loans.

Localities have a proportion of additional balance from the central budget to the total expenditure to balance the local budget below 50%, the on-lending rate is 50% of ODA, concessional loans.

In localities with central budget regulation (except for Hanoi and Ho Chi Minh City), the on-lending rate is 70% of ODA, concessional loans.

Hanoi and Ho Chi Minh City: The on-lending rate is 100% of ODA, concessional loans.

For a number of programs and projects related to sustainable development and adaptation to climate change of some localities in the Mekong Delta that the Government needs to support under the direction of the Government in the Resolution No. 41/NQ-CP dated April 1, 2021 will be decided by the Government on the on-lending rate but not lower than 10%.

In addition, the cases which loan security is not required include: Re-lending to the People's Committees at provincial level; the loans are received by the project management boards of the ministries, and then transferred to the provincial People's Committees.

The Decree also shows that programs and projects, whose investment policies, financial mechanisms and on-lending conditions have been approved by a competent authority before the effective date of this Decree may continue to be implemented under the approval of competent authorities.

For overdue on-lending debts of programs and projects with ODA loans and foreign incentives arising before the effective date of the 2009 Law on Public Debt Management, which have not yet been completely resolved, the on-lending agency shall develop a risk treatment plan for each specific case and send it to the Ministry of Finance to assume the prime responsibility for, and coordinate with relevant agencies to summarize and submit to the Prime Minister for consideration and decision.

This Decree takes effect from October 1, 2021.

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