Return on equity rates for investors in Expressway O&M projects in Vietnam as of March 1, 2024

Return on equity rates for investors in Expressway O&M projects in Vietnam as of March 1, 2024

Return on equity (ROE) rates

- Pursuant to regulations of law and based on socio-economic conditions as well as specific characteristics of the project, the entity in charge of preparing the project shall specify the proposed ROE under the financial plan in the pre-feasibility study report/feasibility study report, provided that the following conditions are met:

+ The minimum ROE shall not be smaller than the average rate of interest on 12-month term deposits paid to institutional customers quoted by at least 03 state-invested joint stock commercial banks at the nearest time within 03 months before the pre-feasibility study report/feasibility study report is prepared;

+ The maximum ROE equals the minimum ROE as defined in point a clause 1 of this Article plus inflation rate.

The inflation rate is determined according to the average CPI (consumer price index) of the latest 10 years quoted by the General Statistics Office of Vietnam while excluding the years in which the CPI value changes significantly.

- Based on socio-economic efficiency of the project as prescribed in Section IV of Form No. 01 in Appendix II on pre-feasibility study report of PPP project, and Section IV of Form No. 01 in Appendix III on feasibility study report of PPP project enclosed with the Decree 35/2021/ND-CP, the entity in charge of preparing the project shall propose rates of equity and borrowed fund in the financial plan which must be determined in a rational manner ensuring both socio-economic efficiency and financial efficiency of the project.

More details can be found in Circular 55/2023/TT-BGTVT, taking effect on March 1, 2024

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