Order and procedures for approval of a program/project proposal funded by ODA and concessional loans in Vietnam

Order and procedures for approval of a program/project proposal funded by ODA and concessional loans in Vietnam

Order and procedures for approval of a program/project proposal funded by ODA and concessional loans shall comply with Clause 2, Article 13 of Decree 114/2021/ND-CP, specifically as follows:

- Ministries, central and local regulatory authorities prepare the proposal for the program/project funded by foreign ODA and concessional loan for submission to the Ministry of Planning and Investment, the Ministry of Finance and concerned agencies in accordance with law; and give clear explanations as to why they make the proposal for the tied loan of the foreign donor (if any);

- The Ministry of Finance takes the lead for determining the grant elements, evaluating the impact of new loans on the public debt safety thresholds, determining applicable domestic financial mechanism, and reporting to the Prime Minister in accordance with the Law on Public Debt Management and concurrently send to the Ministry of Planning and Investment;

- The Ministry of Planning and Investment sends a written request to consult concerned agencies on the program/project proposal. After incorporating the comments of the Ministry of Finance as prescribed in point b of this clause and the comments of concerned agencies, the Ministry of Planning and Investment evaluates the necessity of the programs/projects;

Makes the preliminary assessment of the feasibility, socio-economic effectiveness, environmental impacts (if any), and the impacts of the programs/projects on the midterm public investment plans; thereby selecting the suitable program/project proposals and submitting them to the Prime Minister for approval; 

- The Prime Minister considers and approves the program/project proposal against the following aspects: Name of the program/project; name of the foreign donor and co-donor (if any); name of the managing agency;

Binding terms and conditions of the foreign donor (if any), expected objectives and scale; expected duration; total estimated investment and fund structure; domestic financial mechanism; on-lending method; proposals to use ODA and concessional loan for purchase of reserve supplies and equipment (if any) and other relevant contents; 

- The Ministry of Planning and Investment officially notifies the foreign donor of the Prime Minister’s decision on approval of the program/project proposal.

Order and procedures for approval of a program/project proposal funded by ODA and concessional loans in Vietnam (Internet image)

Dossier and time limit for reviewing the program/project proposal in Vietnam

- Dossier: Program/project proposal made by using the sample specified in Appendix II hereto; the written request that the managing agency submits to the competent authority for approval of the program/project proposal; other relevant documents (if any); 

- The number of dossiers to be submitted to the Ministry of Planning and Investment is 08 sets;

- The number of dossiers to be submitted to the Ministry of Finance is 03 sets;

- The time limit for review and submission of the program/project proposal to the Prime Minister is 45 days from the date that Ministry of Planning and Investment and the Ministry of Finance receive complete and valid dossiers.

Where the dossier is invalid or the content of the program/project proposal does not conform to the provisions of clause 3 of Article 13 of Decree 114/2021/ND-CP, the Ministry of Planning and Investment and the Ministry of Finance must send their written feedback to request the managing agency to fine tune the program/project proposal within 05 days.

(Clause 3, Article 13 of Decree 114/2021/ND-CP)

Criteria for selection of the program/project proposal in Vietnam

- Compatibility with the relevant socio-economic development strategies or master plans in accordance with law on socio-economic development master plans and plans; public debt safety thresholds and repayment capacity; orientation for attraction of ODA and concessional loans; policies and orientations for priorities in ODA and concessional loan provision of foreign donors; 

- Assurance of socio-economic and environmental effectiveness and sustainability;

- Compatibility with the availability of ODA, concessional loans, and counterpart fund;

- No overlap with the contents of programs/projects whose proposals, investment policies or investment decisions have already been approved by competent authorities.

(Clause 4, Article 13 of Decree 114/2021/ND-CP)

Modification of program/project proposals in Vietnam

In the course of formulating, appraising, and deciding an investment policy; deciding modification of an investment policy, where there is any change in the main contents of a program/project proposal approved by the Prime Minister, the managing agency shall follow the formalities and procedures for modification of the program/project proposal as stated hereunder:

- If the adjustment in total investment ascribed to the change in the exchange rate; the increase in an ODA or soft loan does not entail any change in other main contents of the proposal of the program/project specified in point d of clause 2 of Article 13 of Decree 114/2021/ND-CP, the managing agency shall not need to modify the program/project proposal;   

- If modification of the main contents of the proposal of the program/project specified in point d of clause 2 of Article 13 of Decree 114/2021/ND-CP does not lead to any increase in the ODA or soft loan, the managing agency shall notify reasons for such modification in writing in order for the Ministry of Planning and Investment to integrate comments of the Ministry of Finance and other relevant agencies into a report to be submitted to the Prime Minister to seek his approval decision; 

- In case of any increase in ODA or soft loan, the managing agency shall formulate the program/project proposal, and follow the formalities and procedures specified in clause 2 of Article 1 of Decree 114/2021/ND-CP

The dossier of application for modification of the program/project proposal submitted to the competent authority, and the time of decision on modification of the program/project proposal shall be as defined in clause 3 of Article 1 of Decree 114/2021/ND-CP.

The dossier should clarify reasons for modifications and subject matters that need to be modified in the program/project proposal;  

- National target programs, projects of national importance, public investment programs;

Category-A investment programs, projects; programs or projects under the approval-granting authority of the Prime Minister shall be exempt from the requirements for application for modification of program/project proposals specified in this clause.

(Clause 4, Article 1 of Decree 20/2023/ND-CP)

Mai Thanh Loi

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE