Vietnam: How much is the on-lent proportion of ODA loans and foreign concessional loans?

Decree No. 97/2018/ND-CP of Vietnam’s Government on on-lending of the government's ODA loans and foreign concessional loans was issued in the context of the increasing demand for ODA preferential funding. Decree No. 97/2018/ND-CP has partially addressed the remaining issues related to ODA funding.

According to Vietnam’s new regulations, on-lent proportion of ODA loans and foreign concessional loans is specified as follows:

1. The on-lent proportion for the People’s Committee of the province

- The local jurisdiction having the rate of additional funding from the Central government budget to total local government budget expenditure equaling 70% or more shall be entitled to 30% of the on-lent capital derived from the ODA loan or concessional loan;

- The local jurisdiction having the rate of additional funding from the Central government budget to total local government budget expenditure from 50% to below 70% shall be entitled to 40% of the on-lent capital derived from the ODA loan or concessional loan;

- The local jurisdiction having the rate of additional funding from the Central government budget to total local government budget below 50% shall be entitled to 50% of the on-lent capital derived from the ODA loan or concessional loan;

- The local jurisdiction having the rate of revenues regulated into the central budget shall be entitled to 70% of the on-lent capital derived from the ODA loan or concessional loan;

- Hanoi and Ho Chi Minh City shall be entitled to 100% of the on-lent capital derived from the ODA loan or concessional loan.

2. The on-lent proportion for the public sector entities:

- The public sector entity which covers full recurrent expenditures and investment expenditures by its own budget shall be entitled to 100% of the on-lent capital derived from the ODA loan and concessional loan used for investment project.

- The public sector entity which covers full recurrent expenditures and partial investment funding by its own budget shall be entitled to 50% of the on-lent capital derived from the ODA loan and concessional loan used for investment project.

3. The on-lent proportion for the enterprises:

The enterprises are eligible for receiving all of the on-lent capital derived from the ODA loan and concessional loan which are used for investment project, but this amount shall not exceed 70% of the total investment capital approved by the competent authority.

View more details at Decree No. 97/2018/ND-CP of Vietnam’s Government, effective from July 01, 2018.

- Thanh Lam -

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