What are regulations on management of the use of on-lent capital regarding ODA loans and foreign concessional loans in Vietnam?

Pursuant to Article 29 of the Decree 97/2018/NĐ-CP stipulating regulations on management of the use of on-lent capital regarding ODA loans and foreign concessional loans in Vietnam as follows:

1. The end borrower shall take full responsibility to use the capital loan effectively and with right purposes according to the approval decision on policy of investment, the investment decision of the competent authority, the approved project document, the signed on-lending agreement.

2. The duly-authorized intermediary shall take full responsibility to examine the use of on-lent loans by the end borrower by evaluating the document on disbursements for on-lent loans, except the cases where the disbursements are controlled by the State Treasury. The end borrower shall take full responsibility for providing valid and authentic documents for the duly-authorized intermediary. In case of need, the duly-authorized intermediary shall have the authority to request the end borrower to report to it about the use of capital loan and to prove that this loan is used with right purposes.

3. According to the disbursement announcement of the foreign lender and the announcement of the Ministry of Finance, the intermediary and the duly-authorized intermediary shall record a debit and submit a periodic report on debt data to compare with the end borrower’s report.

4. The end borrower shall take charge to implement the measures for managing on-lent loans, purchase trade credit insurance and exchange rate risk insurance as prescribed by laws in order to reduce the credit risks and the exchange rate risks.

Above are regulations on management of the use of on-lent capital regarding ODA loans and foreign concessional loans in Vietnam.

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