Principles of application for developmental investment loans in Ho Chi Minh city

1. Ho Chi Minh city shall be allowed to take out domestic investment loans by means of issuance of local government’s bonds or in other capital mobilization form in accordance with applicable laws. In this case, Ho Chi Minh city is obliged to arrange its local budget for payment of loan principal and interest owed as well as other related costs that may arise.

2. Ho Chi Minh city shall be entitled to on-lent foreign borrowed funds for its infrastructure investment and development projects or programs specified in the city’s budget of expenditures according to the following processes: Ho Chi Minh city People's Committee draws up the loan proposal, collects opinions on such proposal from the Ministry of Finance, the Ministry of Planning and Investment, the State Bank of Vietnam, make a report to the Ministry of Finance and the Ministry of Planning and Investment that then jointly submit it to petition the Prime Minister to consider making his decision based on the Government's policy on on-lending the Government's borrowed funds to the city for implementation of programs or projects proposed by Ho Chi Minh city People's Committee. The city shall be responsible for arranging its budget for payment of loan principal and interest owed in accordance with applicable laws.

3. When wishing to take out loans for investment purposes, Ho Chi Minh city People's Committee shall draw up the plan to use these loans to make up for its local budget deficit and prepare the annual proposed budget for submission to the Ministry of Finance for preparation of a consolidated report sent to a competent authority for its verification and decision.

4. In order to get borrowed funds used for investing in the city’s programs or projects, the city must conform to the following requirements: these programs or projects must use borrowed funds in an effective manner in terms of socio-economic aspects; these programs or projects have been defined in the mid-term (5-year) public investment scheme approved by Ho Chi Minh city People's Council; construction or investment projects have been licensed by the investment decision issued by a competent authority; the city must arrange its local budget for full repayment of debts (including principal, interest and related costs) by the stipulated due date.

View more details at Decree No. 48/2017/ND-CP of Vietnam’s Government, effective from June 10, 2017.

- Ngoc Duyen-

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