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Official Gazette

Saturday, August 20, 2022

New rule to facilitate more efficient use of ODA and concessional loans

Updated: 18:58’ - 25/12/2021
The Government on December 16 issued Decree 114, which is designed to replace Decree 56 of last year and expected to improve efficiency of using official development assistance (ODA) and concessional loans of foreign donors in the country.

Binh Khanh bridge spanning over Soai Rap river is built with ODA funds from the Japanese Government__Photo: Vu Sinh/VNA

Accordingly, non-refundable ODA will be used first of all for implementation of programs and projects on socio-economic infrastructure development, capacity building, better formulation of policies and institutions, and reforms; disaster prevention and control and mitigation of disaster risks; adaptation to climate change; green growth; innovation; social welfare; and for formulation of investment projects or co-financing projects funded by concessional loans in order to increase the preferential component of such loans.

Meanwhile, ODA loans will be used for programs and projects in the fields of health, education, and vocational education, for adaptation to climate change and environmental protection, and for building of essential infrastructure facilities without direct capital recovery.

Concessional loans will be channeled first of all to on-lending programs and projects; and programs and projects on socio-economic infrastructure development to be implemented with state budget funds.

Other cases of priority must comply with the Prime Minister’s decisions on orientations to attract, manage and use ODA and concessional loans from foreign donors in each period.

Under the new Decree, the Ministry of Planning and Investment (MPI) is assigned to draft strategies and policies on development cooperation with foreign donors.

It is also tasked to clarify orientations for attracting, managing and using ODA and concessional loans from foreign donors; and for drafting and submitting for promulgation, or promulgating according to its competence, legal documents on management of such loans.

Another task of the MPI is to identify demands for the ODA and concessional loans serving development investment and propose ODA- and concessional loan-funded programs and projects.

In case of necessity, it may form an interdisciplinary working team to directly coordinate with management units of ODA-funded projects and foreign donors in promptly tackling obstacles.- (VLLF)


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