Procedure for Disbursing Russian Loan Funds for the Nuclear Power Plant Project

Clause 1, Article 5 of Circular 26/2013/TT-BTC stipulates that the disbursement of loan capital from the Russian Federation for the Ninh Thuan 1 Nuclear Power Plant Project shall be carried out in the form of collection payment based on a set of documents accepted in advance as specified in Article 2 of the Credit Agreement, the Banking Agreement, and guidelines in Circular 108/2007/TT-BTC dated September 7, 2007, issued by the Ministry of Finance, guiding the financial management mechanism for ODA programs and projects, and other modifying, supplementing, or replacing documents.

Illustrative image (source: internet)

The disbursement procedure for the credit is as follows:

- After completing domestic approval procedures, EVN sends a notice to the Ministry of Finance along with 04 original commercial contracts signed between EVN and Russian organizations for the Ministry of Finance to proceed with procedures for requesting the Ministry of Finance of the Russian Federation to approve the sponsorship of the contracts (as per Article 8 of the Credit Agreement). These contracts only become effective for disbursement after official approval by the Ministry of Finance of the Russian Federation is sent to the Ministry of Finance.

- The value of each disbursement is based on the contracts signed between EVN and Russian organizations, collection documents, and invoices issued by Russian organizations, accepted by EVN for payment through the service bank, Vietcombank.

- When Vietcombank receives the original collection documents from Russian organizations, it is responsible for verifying the documents, and simultaneously forwarding them to EVN for review and approval for payment.

- Within 07 working days from the date of receipt of the payment documents transferred by Vietcombank, EVN shall provide a written opinion to Vietcombank regarding the approval for payment or refusal to pay a part or the whole of the documents, clearly stating the reasons for non-payment and the amount refused.

- Based on EVN's approval, within 02 days from the date of receipt of the payment approval notice from EVN, Vietcombank shall notify the approval or refusal and the reasons for refusal to Vnesheconombank to proceed with direct payment or notify Russian organizations of the reasons for refusing the payment.

- The date on which Vietcombank notifies Vnesheconombank of the approval of the documents shall be considered the date of use and debt recognition of the credit amount.

- After each instance of debt recognition with Vnesheconombank, Vietcombank shall officially notify and enclose a copy of the debit voucher to the Ministry of Finance (Department of Debt Management and External Finance) for processing state budget revenue and expenditure records for EVN’s re-borrowing.

Regarding payment documents: according to the provisions of the commercial contract signed between EVN and Russian organizations, and Circular 108/2007/TT-BTC and its modifying, supplementing, or replacing documents (if any).

For the applied expenditure control method for the Project's payments, the post-expenditure control method is applied (except for the final payment installment). Specifically:

After each payment to Russian organizations, EVN sends the payment dossier to VDB for inspection and expense control confirmation.

In case the eligible payment value certified by VDB is lower than the actual expenditure paid in the previous period, EVN is responsible for adjusting this difference in the following payment period. The payment request letter with VDB's expense control confirmation (original) is one of the bases for the subsequent payment.

Note that for the final payment installment, VDB shall conduct expense control before paying Russian organizations to ensure the entire payment volume of the contract has been fully and accurately controlled.

More details can be found in Circular 26/2013/TT-BTC which has been effective from April 25, 2013.

Thu Ba

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