Funding sources for Phase 2 of the Poverty Reduction Project in Northern Mountainous Provinces in Vietnam

Funding sources for Phase 2 of the Poverty Reduction Project in Northern Mountainous Provinces in Vietnam (Illustrative image)

Article 3 Circular 123/2010/TT-BTC stipulates the investment capital of the project as follows:

1. Total investment capital of the project will be equal to 165 million USD, including:

- IDA (WB) loan: 96.6 million SDR equivalent to 150 million USD (based on the exchange rate defined by the donor at the time of negotiation. The specific amount withdrawn in USD will apply the exchange rate defined by the donor at the time of disbursement).

- Domestic counterpart fund: 255 billion VND or 15 million USD:

+ Central Budget allocation for the Ministry of Planning and Investment of Vietnam.

+ Central Budget allocation with specific targets for local budgets to execute the project.

+ Counterpart fund contributed by beneficiary communities in kind (local materials and labor).

2. Financial mechanism:

- The IDA loan will be allocated to the 6 project provinces by supplementing with specific targets the Central Budget for local budgets and allocated to the Ministry of Planning and Investment of Vietnam.

- Counterpart fund budget allocation:

+ The portion executed by the Ministry of Planning and Investment of Vietnam: be allocated by the central budget within the annual budget expenditure estimate of the Ministry of Planning and Investment of Vietnam.

+ The portion executed by local authorities: be supported by the central budget with specific targets for local budgets within the annual State Budget estimate.

More details may be found in Circular 123/2010/TT-BTC effective from October 3, 2010.

Nguyen Phu

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