Official development assistance (ODA) loans must be used for infrastructure projects, climate change response, health care and education but not for payment of debts and current expenditures.
This is one of basic principles of management and use of foreign donors’ ODA and concessional loans proposed by the Ministry of Planning and Investment (MPI) in a recently released draft decree.
Under the draft, foreign loans must not be used for payment of taxes, fees and loan interest rates, or procurement of automobiles, supplies and backup equipment, and for payment of site clearance and project management expenses.
Accordingly, non-refundable ODA capital would be prioritized for the implementation of small-scale infrastructure programs or projects; environmental protection, climate change response, human resource development, knowledge transfer and technology development; and capacity enhancement and institution and policy building.
Meanwhile, concessional loans would be used for implementing large-scale programs and projects under the central budget’s spending tasks in the fields of transport infrastructure, irrigation, and climate change response, and those to be paid by local budgets in localities that have ability to borrow the whole concessional loans.- (VLLF)