Criteria for Determining the Investor's Equity in Implementing PPP Projects

According to Clause 2, Article 12 of Circular 88/2018/TT-BTC, the basis for determining the equity capital of the investor in the implementation of a PPP project is stipulated as follows:

- The equity capital of the investor is determined based on the latest audited financial statement of the investor by an independent audit organization and a report on the utilization of the investor's equity at the time of participating in the PPP project.

In the case that the investor is a newly established organization within the year, the investor's equity is determined based on the audited financial statement by an independent audit organization from the time of establishment to the time of participating in the project; concurrently, the owner representative, owner, or parent company must have a declaration of commitment and a financial report proving sufficient equity capital in accordance with the project's financial plan;

- In the case where the investor participates in multiple projects and other long-term investments (if any) at the same time, the investor must prepare a list of projects and other long-term investments and ensure that the total equity capital of the investor is sufficient to cover the total equity capital commitment for all projects and other long-term investments as regulated;

- The investor is responsible for submitting to the competent state authority a plan ensuring equity capital as committed, including a capital increase schedule of the project enterprise, in line with the implementation progress of the PPP project as stipulated in Clause 4, Article 38 of Decree No. 63/2018/ND-CP.

The investor shall bear legal responsibility for the accuracy and legality of the data and documents provided related to equity capital, the list of ongoing projects, allocation of equity for projects, and other long-term investments up to the time of project contract negotiation;

- The competent state authority signing and implementing the project contract shall be responsible for assessing the financial capacity of the investor and supervising the fulfillment of the investment equity capital mobilization commitments by the investor.

The above are regulations on the basis of determining equity capital in the implementation of PPP projects.

Sincerely!