Local development investment funds, established by provinces or centrally run cities under Government Decree No. 138/2007/ND-CP of August 28, are locally based state financial institutions functioning to make financial and development investments and are financially autonomous (entitled to no operating funds from the state budget). A local development investment fund has a minimum charter capital of VND 100 billion.
Beneficiaries of local development investment fund investments are projects approved by provincial-level People’s Councils, including projects on construction of technical infrastructure or infrastructure for export processing zones or industrial parks; investment projects on the building of houses and the development of new urban centers; and projects in environmental protection.
These funds may act as investors or pool investment capital with other investing organizations.
Any direct investment in a project exceeding 10% of a fund’s capital (or 15% for indirect investment) or any loan of a term of more than 15 years provided by a fund is subject to the approval of the provincial-level People’s Committee. On principle, interest rates on lending applied by the funds must not be lower than the State’s investment credit interest rate.
The funds may mobilize medium- and long-term capital of domestic and foreign organizations and individuals, provide loans from capital entrusted by organizations and individuals or entrust their capital to organizations and individuals to provide loans.-