Counterpart Funds Related to ODA and Concessional Loans
Counterpart Funds Related to ODA and Concessional Loans: What Are They, and Which Legal Documents Regulate Them?
To the Editorial Board of Thu Ky Luat,My name is Thuy Anh. I have a question that I hope the Editorial Board can help me with. Last night, while watching the news on TV, I heard the editor mention counterpart funds related to ODA (Official Development Assistance) and concessional loans. However, I do not fully understand this term. I look forward to receiving advice from the Editorial Board.Thank you very much.My email address is anh***@gmail.comThe concept of counterpart funds related to ODA funds and concessional loans has been specifically stipulated in Clause 19, Article 3 of Decree 56/2020/ND-CP of the Government of Vietnam.
ODA funds and concessional loans are sources of funding provided by foreign donors to the State or the Government of the Socialist Republic of Vietnam to support development, ensure welfare, and social security, including:
- Non-refundable ODA funds are ODA funds that do not need to be repaid to the foreign donor;
- ODA loans are foreign loans with a concessional element of at least 35% for loans with binding conditions related to the procurement of goods and services according to the regulations of the foreign donor, or at least 25% for loans without binding conditions. The method of calculating the concessional element is stated in Appendix I attached to this Decree;
- Concessional loans are foreign loans with more favorable conditions compared to commercial loans but whose concessional element has not met the ODA loan standard as stipulated in point b of this clause.
The above content is the legal editorial board's advice regarding the concept of counterpart funds related to ODA funds and concessional loans. For more detailed information, you may refer to the regulations in Decree 56/2020/ND-CP.
Sincerely!
