Equity capital of the investor that participates in the execution of a PPP project in Vietnam

Article 5 Decree 28/2021/ND-CP specifies the equity capital of the investor that participates in the execution of a PPP project in Vietnam as follows:

1. The equity capital of the investor that participates in the execution of a PPP project is the equity capital of an independent juridical person or a partnership of independent juridical persons that contribute capital in reality in accordance with the charter of the PPP project enterprise and the PPP project contract.

2. Basis for determination of the investor’s equity capital:

a) The investor’s latest annual financial statement audited by an independent audit organization and the audited mid-year financial statement (if any);

b) In case the investor is a new organization that is established in the year, its equity capital shall be determined according to the financial statement audited by an independent audit organization for the period from the establishment date to the date of participation in the PPP project or the latest audited mid-year financial statement. Also, the owner, the owner’s representative or the parent company shall have a written commitment and financial statement proving the adequacy of equity capital for contributing capital under the financial plan of the PPP project;

c) In case the investor concurrently invests in multiple projects and other long-term financial investments (if any), the investor shall compile a list of projects and long-term financial investments and make sure that the investor’s equity capital is adequate for all these projects and long-term financial investments;

d) The pre-qualification documents or bidding documents shall specify the basis for determination of the investor’s equity capital and the time for determination thereof, which is the basis for assessment of the investor’s financial capacity;

dd) At the time of concluding the PPP project contract, the investor and the PPP project enterprise shall send the competent authority and the authority that signs the PPP project contract (hereinafter referred to as “contract-signing authority”) the plan for assurance of adequate equity capital and supporting documents in accordance with regulations of the PPP project contract, which is the basis for supervising the process of raising capital by the investor and the PPP project enterprise.

3. The investor shall be legally responsible for the accuracy and legitimacy of the provided data and documents relevant to the equity capital and distribution of equity capital to the ongoing projects and long-term financial investments, the plan for raising equity capital during the progress of the PPP project.

Sincerely!