Agreement between the Government of the Socialist Republic of Vietnam and the Government of the Kingdom of Denmark regarding Development Cooperation on Energy Partnership Programme between Vietnam and Denmark 2017-2020

AGREEMENT

BETWEEN THE GOVERNMENT OF THE SOCIALIST REPUBLIC OF VIET NAM AND THE GOVERNMENT OF THE KINGDOM OF DENMARK REGARDING DEVELOPMENT COOPERATION ON ENERGY PARTNERSHIP PROGRAMME BETWEEN VIET NAM AND DENMARK 2017-2020

WHEREAS Upon a request from the Government of the Socialist Republic of Viet Nam (GoV), the Government of the Kingdom of Denmark (GoDK) has agreed to provide an amount of 21.6 million Danish Kroner on a grant basis in support of the Danish Energy Partnership Programme in Viet Nam, as part of the Danish Energy Partnership Programme Phase II with Vietnam, China, Mexico and South Africa;

WHEREAS the GoV and the GoDK have agreed that the programme will be carried out in accordance with the provisions of this agreement and the programme document, attached herewith as Annex 1;

WHEREAS the general provision of this agreement is set forth in the agreement between the GoV and the GoDK named General Terms and Procedures of Development Cooperation dated 25 August 1993;

WHEREAS commitment to international law and conflict prevention, protecting and promoting human rights, respect for transparent and good governance processes, accountability and the fight against corruption, sound macro-economic policies and the commitment to poverty reduction govern the policies of the GoV and the GoDK, and which are prerequisites for this agreement, and hence constitutes essential elements of this agreement;

WHEREAS the GoV and the GoDK shall abide by the local laws and by applicable international instruments, including the UN Convention on the Rights of the Child and International Labour Organization Convention which Vietnam and Denmark are party to;

WHEREAS the GoV and the GoDK is committed to the principles of harmonisation and to strive for the highest degree of alignment with the budgetary and accountability system of the implementing partners and the legislation of the GoV so as to enhance effective implementation, to reduce the administrative burden, to minimise transaction costs and increase transparency and accountability of the support provided;

NOW THEREFORE the GoV and the GoDK have decided as follows:

Article 1

Definitions

For the purpose of this Agreement, unless otherwise stated, the terms listed below mean the following:

a. “The Parties” mean the GoV represented by the Ministry of Industry and Trade (MOIT) of Viet Nam, and the GoDK represented by the Embassy of Denmark in Hanoi;

b. “Danish Parties” refer to the Ministry of Foreign Affairs (MFA), the Ministry of Energy, Utilities and Climate (MEUC), the Danish Energy Agency (DEA) the Embassy of Denmark (EDK) in Vietnam or any other authority empowered to perform the functions exercised by said authorities;

c. “Vietnamese Parties” refer to MOIT or any other authority empowered to perform the functions exercised by said authorities;

d. “Vietnamese implementing partners” refer to MOIT’s agencies and departments involved in Programme implementation e.g. the Department of Energy Efficiency and Sustainable Development, the Electricity and Renewable Energy Authority, and the Electricity Regulatory Authority of Viet Nam;

e. “Joint decision making arrangement” refers to the overall management of the programme, which are meetings and exchange of letters between the Parties;

f. “The Programme” refers to the Danish Energy Partnership Programme in Viet Nam (DEPP);

g. “The Documentation” refers to the DEPP Programme Document which, by signature, has been approved by Danish Parties and Vietnamese Parties and is attached as Annex 1 to this agreement, hence constituting an integral part hereof. The Documentation will be reviewed in connection with Programme’s reviews. Changes to the Documentation are subject to the approval by the joint decision making arrangement. Development objectives described in the Documentation and the total amount of the Danish contribution cannot be changed;

h. “Programme Period” means the period of programme implementation from the signing date of this agreement until 30 June 2020.

Article 2

Objectives of the programme

1. The development objective of the Programme is that the most cost-effective opportunities for low carbon transition in energy system are more widely adopted throughout Viet Nam, as stated in the Documentation.

2. The immediate objectives of the Programme are:

- For Development Engagement 1 - Capacity development for long-range energy sector planning: Viet Nam’s energy system is more sustainable through implementation of cost-optimised policy and planning.

- For Development Engagement 2 - Capacity development for renewable energy integration into the power system: Efficient integration of renewable energy into the Viet Nam power system, with consequent reduction of CO₂ emissions.

- Development Engagement 3: Low carbon development in the industrial sector: The most cost-effective opportunities for low carbon transition in industry are more widely adopted throughout Viet Nam.

as stated in the Documentation.

3. GoDK will grant the support on progress attained compared to planned progress described in the Documentation. Progress will be measured through commonly agreed indicators and monitoring systems described in this legal instrument.

4. The immediate objectives can only be adjusted to changes in the programme support context by decision of the joint decision making arrangement described, followed by mutual written agreement between the Parties. Such written agreement shall become addendum to this agreement

Article 3

Management, Organisation and Consultants

5. The overall oversight of the Programme is the coordinated responsibility of MOIT, MEUC, DEA and EDK. The overall management roles of the programme support rests in the Programme Steering Committee, which is co-chaired by the Minister or Vice Minister of MOIT and the Danish Ambassador to Vietnam. Members of the Programme Steering Committee are representatives from DEA and heads/deputy heads of departments for the development engagement partner institutions. The tasks of the Steering Committee are described in the Documentation.

6. MOIT shall assign a programme director who is a focal point of the Vietnamese Implementing Partners and will participate in the Programme Management Group.

7. The Programme Management Group shall be established with representatives from the partner institutions at senior operational level, the DEA-representative(s) and EDK representative as well as the long-term adviser. The Management Group will be led by DEA country coordinator, EDK programme manager and MOIT programme director. The Management Group follows progress, reviews work plans with associated TA procurement plans to be reported to the Steering Committee, advises the Steering Committee and is a forum for technical level policy dialogue.

8. The implementation and management structure of the Programme, including coordination, assessment and procurement of the required technical assistance and the arrangement for the exchange of visits, processing of secondments, as well as dealing with financial and administrative issues, including the provision of resources according to Article 4 and Article 5 of this agreement, among others, is described in the Documentation.

9. The GoV and the GoDK shall maintain close dialogue in order to adjust plans for cooperation year by year and to deepen the related policy dialogue. This dialogue shall take place through the participation of the Danish Parties in meetings of the Programme Steering Committee, review meetings and other meetings as relevant.

10. The technical assistance shall be provided by the Danish Parties to ensure capacity development and achievement of programme’s objectives. The technical assistance shall be delivered by an international long-term adviser, experts from the DEA, international and national experts. The international long-term adviser who is recruited upon close consultation with Vietnamese implementing partners and contracted by the MFA, will be posted to MOIT.

Article 4

Obligations of the Vietnamese parties

11. Under this Agreement, the GoV shall:

a. Promptly inform the GoDK of any condition which interfere or threaten to interfere with the successful implementation of the Programme;

b. Within a reasonable time advise on all reports, recommendations and other matters properly referred for advice by the GoDK, in order not to delay or disrupt the execution of the services or the works of the Programme;

c. Ensure that all relevant provisions in the General Terms and Procedures of Development Cooperation dated 25 August 1993 regarding the GoDK execution of activities are honoured;

d. Ensure that the Vietnamese implementing partners develop annual work plans based on Viet Nam’s priorities, within the areas of agreed cooperation in a timely manner as stated in the Documentation;

e. Ensure that the Vietnamese implementing partners prepare bi-annual progress report of the cooperation in a timely manner as stated in the Documentation;

f. Provide financial contribution of maximum 3 billion VND and adequate human resources i.e. skilled staff and salary in the Vietnamese implementing partners throughout the Programme Period;

g. The GoV shall provide adequate financial capital and general operational costs. These costs will cover offices and office furniture, repair and maintenance, power, water, fuel, insurances, internet access, domestic fax and telephone expenses. Ensure funds for the payment of all other expenses required for the establishment and operation of the Programme, which are not mentioned as items to be provided by the GoDK;

h. The GoV shall provide adequate facilities and working space for international long-term adviser and other technical assistance experts including office space, office equipment, stationery, telephone, internet access. Provide resources according to their budget availability, the applicable national legislation and the decision of the Programme Steering Committee in order to ensure the participation of skilled staff while the Programme is in force;

i. Provide assistance to GoV’s procedures for the entry, temporary stay and exit from Viet Nam of the official participants in the Programme, regardless of their nationality according to regulations of the GoV and the regulation mentioned under item (c) above;

j. Facilitate the issue of multiple entry and exit visas, work permits and residence permits for the international long-term adviser and his/her family regardless of nationality as well as provide assistance in the clearance through customs of their personal belongings that they are allowed to import according to regulations of the GoV and the regulation mentioned under item (c) above;

k. Ensure the tax exemption of expatriate personnel and his/her family members follows the regulation mentioned under item (c) above and the regulation on expatriate personnel for ODA programmes and projects in Viet Nam from:

i. all taxes in respect of any emolument paid to them from programme sources;

ii. all duties and taxes imposed on the import and export of new as well as used household goods and personal effects imported by the international long-term adviser and his/her spouse and dependants regardless of nationality for their exclusive use within 6 months after their arrival, subject to re-export on completion of tour of services or payment of duties and taxes if sold locally.

l. Equipment, vehicle, materials, supplies and spare parts to be purchased for the Programme by the GoDK, if any, will be exempted from any duties, taxes, and public charges in accordance with Vietnamese regulations. The refunded VAT and other charges from these equipment and materials will be transferred to the programme funds;

m. Ensure timely settlement of any other related formalities that might keep the Programme behind schedule in accordance with assigned mandates and responsibilities of relevant Vietnamese authorities.

Article 5

Obligations of the Danish Parties

12. Under this Agreement, the GoDK shall:

a. Provide 21.6 million Danish Kroner (DKK) for the implementation of the Programme, which is distributed among three Programme's engagements as follow:

- Development Engagement 1 - Capacity Development for long-range energy sector planning: 8.4 million DKK

- Development Engagement 2 - Capacity Development for Renewable Energy Integration into the Power System: 5.9 million DKK

- Development Engagement 3 - Low carbon development in the industrial sector: 7.3 million DKK

b. All commitments of GoDK are made in Danish Kroner. There will be no cash transferred or disbursed directly to the Vietnamese Parties as the technical assistance and other activides will be contracted by the Danish Parties;

c. Procurement of international technical assistance (in any form) will be carried out by DEA and follow Danish procurement rules or drawn from a pool of experts. Final selection will be done in close cooperation based on no objection from the Vietnamese implementing partners;

d. Procurement of agreed national technical assistance, not covered by the above, will be carried out by the EDK in consultation with DEA, and follow Danish procurement rules for local procurement of technical assistance. Final selection will be done by in close cooperation with the Vietnamese implementing partners;

e. Expenses relating to study tours, workshops and seminars will be paid for by the Programme through EDK based on appropriate quotations approved by EDK and documented expenses. Sitting allowance for any workshop or meeting will be paid for out of Vietnamese partners’ own budgets;

f. The GoDK will cooperate and communicate fully and in a timely manner with the GoV on all matters relevant to the implementation of the Programme as defined in the Documentation and this agreement;

g. GoDK will not bear any responsibility and/or liability to any third party with regard to implementation of the Programme.

13. In addition to the above committed fund, the GoDK dedicated 8.0 DKK million as unallocated fund from the Danish Energy Partnership Programme with Viet Nam, China, Mexico and South Africa. The unallocated fund could be allocated as an additional fund by having any of the Country Steering Committees submit a proposal to the GoDK for approval if one of the following criteria is fulfilled:

a. Dissemination of lessons learned across the partnership countries that would stimulate cross fertilisation (south-south dialog).

b. Activating partnerships between Civil Society Organisation and academia on e.g. awareness, consultation, analysis, monitoring etc.

c. Activities that will address barriers and opportunities to mobilise and leverage of funds from other sources or engage the private sector to be the benefit of both Denmark and the partner country.

d. Promote a policy agenda of interest for both Denmark and the partner country e.g. accelerating implementation of a strategy, policy or plan developed as part of a Development Engagement

14. The GoDK shall respect and ensure appropriate compliance of regulations of the GoV i.e Decree No.16/2016/ND-CP dated 16 March 2016 on management and use of official development assistance (ODA) and concessional loans of foreign donors or other documents on amendment, addition or replacement of this regulation. Ensure timely settlement of any other related formalities that might keep the Programme behind schedule in accordance with assigned mandates and responsibilities of the Danish parties.

Article 6

Obligations of both Parties

15. Both Parties will:

a. Strengthen aid effectiveness by endeavour to co-ordinate their efforts under this agreement with other development partners, be they states, international organisations or non-governmental organisations;

b. Use best endeavours to optimise the use of Programme resources.

Article 7

Information, monitoring and evaluation

16. The Parties shall fully collaborate to ensure the accomplishment of the objectives of this Agreement. To this end, the Parties shall exchange views with regard to matters relating to the Programme and provide each other with all available data, documentation and information including financial statement of budget usage; shall provide appropriate mutual assistance required to accomplish their obligations; and provide all necessary support to facilitate the due implementation of the Programme in accordance to their respective authority.

17. The Parties will make a mid-term review eighteen months after the signature of this agreement. The review will focus on achievements and necessary further steps to guarantee a successful completion of the Programme.

18. The Danish Parties shall have the right to carry out any technical review mission that is considered necessary to monitor the implementation of the Programme. In order to facilitate the work of the person or persons instructed to carry out such monitoring missions, the Vietnamese Parties shall endeavour to provide these persons with all relevant assistance, information, and documentation related to the objectives of this agreement in accordance with Vietnamese law and regulation.

19. The Danish Parties shall provide biannual budget expenditure reports to the Programme Director and Steering Committee as parts of the overall Programme progress reports.

20. Evaluation of the Programme support, preferably undertaken jointly by the GoV and the GoDK may be carried out at the request of either Party. After the termination of the Programme support, the GoDK reserves the right to carry out evaluation in accordance with this article.

Article 8

Transfer of ownership

21. The Vietnamese implementing partners are responsible for the implementation of the Programme components shall maintain updated inventories of all equipment financed by earmarked funding from MFA (e.g. vehicles, computers, furniture and tools).

22. Equipment, material, supplies and facilities purchased by MFA and used during the implementation of the Programme (e.g. vehicles, computers, furniture and tools), will remain property of MFA until the Parties may agree otherwise, and will not generate liability to the Vietnamese Parties or the Vietnamese implementing partners.

23. Ownership transfer of the above-mentioned assets to the Vietnamese implementing partners may take place during the Programme Period. Before the termination of the Programme, the Parties will assess and agree on final transfer of such assets, after a final request on the matter from the Vietnamese implementing partners. Any remaining assets will be disposed of by MFA.

Article 9

Non-compliance, Suspension, and Force majeure

24. In case of non-compliance with the provisions of this agreement and /or violation of the essential elements mentioned in this agreement, the Danish Parties have the right to suspend the Programme by giving a prior written notice to the other Party, indicating its intended termination date. Non-compliance includes inter alia:

a. If the implementation of the Programme components develops unfavourably in relation to objectives established in Article 2 of this agreement.

b. The Vietnamese implementing partners failed to fulfil their commitments under this agreement.

25. If a serious irregularity in the Programme has been ascertained, either Party may suspend its implementation, wholly or partially, until the Parties jointly decide to resume it.

26. In case of force majeure e.g. severe natural disasters including earth quake, tsunami, storms or floods that create suspension or delay in the Programme implementation and affect the programme effectiveness, the affected Party should promptly inform the other in writing. If substantial delay is caused by such situation, an extension of the programme implementation duration might be discussed and agreed by the Programme Steering Committee and submitted for the approval by the Parties.

Article 10

Settlement of disputes

27. If any dispute arises between the Parties as to the interpretation, application or implementation of this agreement, they will consult each other in order to reach an amicable solution.

Article 11

Corruption

28. No offer of payment, compensation or benefit of any kind, which could be regarded as an illegal or corrupt practice, shall be made, promised, sought or accepted - neither directly nor indirectly - as an inducement or reward in relation to activities funded under this agreement, including tendering, award, or execution of contracts. Any such practise will be grounds for the immediate cancellation of this agreement or part of it, and for additional civil and/or criminal action, as may be appropriate. At the discretion of the Danish Parties, a further consequence of any such practise can be the definite exclusion from any projects funded by them.

29. The GoV commits that all persons involved in the Programme activities are under strict obligation to provide information to the EDK any suspicion on or actual cases of:

- Fraud;

- Misuse of funds;

- Corruption;

- Breach of contracts;

- Court cases involving a larger amount of money;

- Loss of funds;

- Possible loss of hands;

- Qualifications or criticism in audit reports and other instances or misuse of funds not mentioned here.

Article 12

Child Labour

30. The Vietnamese party will abide by the local laws and by applicable international instruments, including the UN convention on the Rights of the Child and the International Labour Conventions to which Vietnam is a member, - in particular the Minimum Age Convention, 1973 (No. 138) taking effect for Vietnam from 24 June 2003 and the Worst Forms of Child Labour Convention, 1999 (No. 182) taking effect for Vietnam from 19 December 2000. The Vietnamese party will ensure that no-one under 14 years of age or age of the end of compulsory schooling is engaged by organisations working for the Programme.

Article 13

Amendment

31. Any amendment to this agreement shall be agreed, in writing, between the Parties and shall constitute an integral part of this agreement.

Article 14

Entry into Force, Programme duration, Termination

32. This government agreement enters into effect on the date of signature and shall remain in force within 6 months from the end of the Programme.

33. In case of delay in programme implementation, the duration of the Programme Period may be extended by mutual agreement and within the agreed budget and given objectives.

34. The Parties may terminate the Programme by agreement through an exchange of letters or unilaterally by a notice of termination. Such notice will come into effect six months after having been received by the other Party. The termination of this agreement will not affect the conclusion of the ongoing activities agreed during the validity of this agreement.

In witness hereof the Parties hereto, acting through their representatives duly authorised for this purpose, have caused this Agreement to be signed in 02 originals in the English and 02 originals in the Vietnamese language of equal validity. In case of any inconsistence between English version and Vietnamese version, the English version will prevail.

Ha Noi, 21 December 2017

Annex 1: Energy Partnership Programme between Viet Nam and Denmark Programme Document