Decree 79/2021/ND-CP on amending articles of Decree 97/2018/ND-CP on the on-lending of official development assistance

DECREE

Amending and supplementing a number of articles of Decree No. 97/2018/ND-CP of June 30, 2018, on the on-lending of official development assistance loans and foreign concessional loans of the Government^[1]

Pursuant to the June 19, 2015 Law on Organization of the Government; and the November 22, 2019 Law Amending and Supplementing a Number of Articles of the Law on Organization of the Government and the Law on Organization of Local Administration;

Pursuant to the November 23, 2017 Law on Public Debt Management;

Pursuant to the June 25, 2015 Law on the State Budget;

Pursuant to the June 13, 2019 Law on Public Investment;

At the proposal of the Minister of Finance,

The Government promulgates the Decree amending and supplementing a number of articles of Decree No. 97/2018/ND-CP of June 30, 2018, on the on-lending of official development assistance (ODA) loans and foreign concessional loans of the Government.

Article 1. To amend and supplement a number of articles of Decree No. 97/2018/ND-CP of June 30, 2018, on the on-lending of ODA loans and foreign concessional loans of the Government

1. To amend and supplement Clause 3, Article 16 as follows:

“3. The value of collateral must be at least equal to 120% (one hundred and twenty percent) of the outstanding value of a loan to be on-lent, in case of on-lending loans to enterprises, or 100% (one hundred percent) of the outstanding value of a loan to be on-lent, in case of on-lending loans to public non-business units. In the course of use of an on-lent loan, if the value of collateral is lower than the above-specified value, the borrower shall add the collateral to reach such value.”

2. To amend and supplement Clause 4, Article 16 as follows:

“4. Security is not required for:

a/ Loans to be on-lent to provincial-level People’s Committees;

b/ Loans received by project management boards under ministries then to be transferred to provincial-level People’s Committees.”

3. To amend Clause 1, Article 21 as follows:

“1. On-lending rates for provincial-level People’s Committees:

a/ For a locality with transfers from the central budget accounting for 70% or more of its total local budget expenditures, the on-lending rate is 10% of ODA loans or concessional loans;

b/ For a locality with transfers from the central budget accounting for between 50% and below 70% of its total local budget expenditures, the on-lending rate is 30% of ODA loans or concessional loans;

c/ For a locality with transfers from the central budget accounting for less than 50% of its total local budget expenditures, the on-lending rate is 50% of ODA loans or concessional loans;

d/ For localities with local budget revenues transferred to the central budget (excluding Hanoi and Ho Chi Minh City), the on-lending rate is 70% of ODA loans or concessional loans;

dd/ For Hanoi and Ho Chi Minh City, the on-lending rate is 100% of ODA loans or concessional loans;

e/ For programs and projects related to sustainable development and climate change adaptation of a number of localities in the Mekong Delta region that need support from the Government as instructed by the Government in Resolution No. 41/NQ-CP of April 1, 2021, on-lending rates shall be decided by the Government but must be not less than 10%.”

4. To add the following Point c to Clause 2, Article 21:

“c/ In case of applying another on-lending rate to the subjects specified at Point a or b, Clause 2 of this Article, when formulating a financial mechanism applicable to ODA loans and concessional loans, the Ministry of Finance shall, at the proposal of the concerned managing agency and borrower, assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment and related agencies in, submitting to the Government the on-lending rate on a case-by-case basis for consideration and decision which, however, must be not less than 10%.”

5. To add the following Clause 3 to Article 23:

“3. In addition to the responsibilities specified in Clause 1 of this Article, authorized on-lending agencies not bearing credit risks have the following responsibilities:

a/ To appraise the on-lending of loans to enterprises or public non-business units, and report appraisal results to the Ministry of Finance, confirming capital recovery capacity of projects; and on-lent loan repayment capacity of enterprises or public non-business units;

b/To organize and manage the on-lending and recovery of on-lent loans, ensuring that loans are repaid fully and on schedule to the Ministry of Finance according to results of appraisal of the on-lending and on-lending authorization contracts;

c/ To appraise plans on loan security, registration, management and realization of mortgaged assets and other assets used by borrowers to secure on-lent loans in accordance with the regulations on collaterals;

d/ To inspect the use of on-lent loans by borrowers through examining on-lent loan disbursement dossiers, unless the disbursed loans have undergone payment control by the State Treasury;

dd/ To supervise on-lent loans, financial status of borrowers, and exploitation and operation of works invested with on-lent loans, inspect on-lent loans and borrowers on a periodical or unscheduled basis and report inspection results to the Ministry of Finance;

e/ To appraise borrowers’ proposed plans on realization of on-lent loans (if any) and report on appraisal results, clearly stating the conformability or non-conformability of such plans, to the Ministry of Finance for the latter to report them to competent authorities for consideration and decision.”

6. To amend and supplement Clause 1, Article 31 as follows:

“1. Within 30 days from the date of signing a contract on on-lending of loans to a borrower being a public non-business unit or an enterprise, the borrower and authorized on-lending agency shall sign a loan security contract; the authorized on-lending agency shall send a copy of the signed contract to the Ministry of Finance.”

7. To amend and supplement Clause 1, Article 32 as follows:

“1. Borrowers being provincial-level People’s Committees shall send reports on the on-lending of loans to the Ministry of Finance; while borrowers being public non-business units or enterprises shall send reports on the on-lending of loans to authorized on-lending agencies no later than July 31 of the implementation year for the reporting period from January 1 to June 30 of the implementation year, and no later than February 15 of the year following the implementation year for the reporting period from July 1 to December 31 of the implementation year; such a report must have the following contents:

a/ Fund withdrawal, loan repayment, and outstanding amount of on-lent loans;

b/ Changes in collaterals;

c/ The borrower’s financial status and actual debts, including outstanding loans and overdue debts (if any) to any creditor;

d/ Implementation, operation and exploitation of the investment project, and management and use of assets of the investment project and assets formed from loans.”

8. To amend and supplement Clause 2, Article 32 as follows:

“2. Authorized on-lending agencies shall report on the contents specified in Clause 1 of this Article to the Ministry of Finance no later than August 31 of the implementation year for the reporting period from January 1 to June 30 of the implementation year, and no later than February 28 of the year following the implementation year for the reporting period from July 1 to December 31 of the implementation year, or right after the occurrence of an unexpected matter affecting the loan repayment capacity of each project using on-lent loans and the borrower.”

9. To amend and supplement Point b, Clause 1, Article 35 as follows:

“b/ For a loan overdue for 2 or 3 repayment periods: The borrower being an enterprise that borrows the on-lent loan whereby the on-lending agency bears credit risks shall, at least 15 days before the starting date of the nearest subsequent repayment term, maintain the balance on its account which must at least equal to:

- Two subsequent repayment periods, for a loan overdue for 2 repayment periods;

- Three subsequent repayment periods, for a loan overdue for 3 repayment periods.”

10. To amend and supplement Article 3, Appendix II with the contents provided in the Appendix to this Decree.

Article 2. To annul Clause 3, Article 17.

Article 3. Effect

1. This Decree takes effect on October 1, 2021.

2. Programs and projects for which investment policy, financial mechanisms and on-lending conditions have been approved by competent authorities before the effective date of this Decree may continue to be implemented under such approvals.

3. For overdue on-lent loans of programs and projects using ODA loans and foreign concessional loans that arise before the effective date of the 2009 Law on Public Debt Management but have not been completely handled so far, on-lending agencies shall formulate a plan on risk handling for each specific case and send such plans to the Ministry of Finance for the latter to assume the prime responsibility for, and coordinate with related agencies in, summarizing and submitting them to the Prime Minister for consideration and decision.

Article 4. Implementation responsibility

Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, and related enterprises, organizations and individuals shall implement this Decree.-

On behalf of the Government
For the Prime Minister
Deputy Prime Minister
PHAM BINH MINH

* The Appendix to this Decree is not translated.