Decree 20/2023/ND-CP amend Decree 114/2021/ND-CP use of ODA and concessional loans of foreign donors

DECREE

Amending and supplementing a number of articles of the Government’s Decree No. 114/2021/ND-CP of December 16, 2021, on the management and use of official development assistance and concessional loans of foreign donors^[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 June 25, 2015 Law on the State Budget;

Pursuant to the November 26, 2013 Bidding Law;

Pursuant to the June 18, 2014 Construction Law; and the June 17, 2020 Law Amending and Supplementing a Number of Articles of the Construction Law;

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

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

Pursuant to the January 11, 2022 Law Amending and Supplementing a Number of Articles of the Law on Public Investment, Law on Investment in the Form of Public-Private Partnership, Law on Investment, Housing Law, Bidding Law, Electricity Law, Law on Enterprises, Law on Excise Tax, and Law on Enforcement of Civil Judgments;

At the proposal of the Minister of Planning and Investment,

The Government promulgates the Decree amending and supplementing a number of articles of the Government’s Decree No. 114/2021/ND-CP of December  16, 2021, on the management and use of official development assistance and concessional loans of foreign donors.

Article 1. To amend and supplement a number of articles of the Government’s Decree No. 114/2021/ND-CP of December 16, 2021, on the management and use of official development assistance (ODA) and concessional loans of foreign donors (below referred to as Decree No. 114/2021/ND-CP)

1. To amend Clause 2, Article 12 as follows:

“2. The Prime Minister shall decide on investment policy for the following programs and projects:

a/ Programs and group-A investment projects to be funded with ODA or concessional loans, except those specified in Clause 1 of this Article;

b/ Programs or investment projects to be funded with non-refundable ODA in the following cases: programs and group-A projects; programs and projects accompanied by policy framework; programs and projects in the fields of national defense, security and religious affairs; sector-wide approach programs; and procurement of goods subject to the Prime Minister’s permission;”

2. To add Clauses 3a and 3b to Article 12 as follows:

“3a. Ministers and heads of managing agencies shall decide on investment policy for group-B and group-C investment projects to be funded with ODA or concessional loans of foreign donors, and approve technical assistance projects to be funded with ODA or concessional loans for preparation of investment projects under management by their ministries or agencies, except those specified in Clause 2
of this Article.

3b. Provincial-level People’s Councils shall decide on investment policy for group-B and group-C investment projects to be funded with ODA or concessional loans of foreign donors, and approve technical assistance projects to be funded with ODA or concessional loans for preparation of investment projects under localities’ management, except those specified in Clause 2 of this Article.”

3. To amend Point d, Clause 2, Article 13 as follows:

“d/ The Prime Minister shall consider and approve a program or project proposal with the following principal contents: name of the program or project; names of the foreign donor and co-donors (if any); name of the managing agency; expected objectives and main outcomes; expected total amount of funds and structure of funding sources; domestic financial mechanism and on-lending method.”

4. To add Clause 5 to Article 13 as follows:

“5. Adjustment of a program or investment project proposal:

In the course of formulation and appraisal of, and decision on, investment policy, or decision on adjustment of investment policy, in case there is/are a change(s) as compared to the principal contents of the program or project proposal approved by the Prime Minister, the managing agency shall carry out the order and procedures for adjusting the program or project proposal as follows:

a/ In case of adjustment of the total investment amount due to exchange rate fluctuation; or reduction of ODA loans or concessional loans without changing other principal contents of the program or project proposal specified at Point d, Clause 2 of this Article: The managing agency is not required to adjust the program or project proposal;

b/ In case of a change(s) in the principal contents of the program or project proposal specified at Point d, Clause 2 of this Article without increasing ODA loans or concessional loans: The managing agency shall send a request for the adjustment and report on the reason of the adjustment to the Ministry of Planning and Investment for the latter to collect opinions of the Ministry of Finance and related agencies, and submit the request to the Prime Minister for consideration and decision;

c/ In case of increase in ODA loans or concessional loans: The managing agency shall formulate a program or project proposal and carry out the order and procedures specified in Clause 2 of this Article. A dossier submitted to a competent authority and the time limit for deciding on adjustment of the program or project proposal must comply with Clause 3 of this Article; the dossier must clearly state reasons for and contents of the adjustment of the program or project proposal;

d/ For national target programs, national important projects, public investment programs; programs and group-A investment projects; and programs and projects subject to the Prime Minister’s approval, it is not required to adjust program or project proposals under this Clause.”

5. To add Clauses 5a, 5b to Article 14 as follows:

“5a. The order and procedures for making investment policy decision for group-B or group-C investment projects to be funded with ODA or concessional loans that fall within the competence of ministers or heads of managing agencies are as follows:

a/ A minister or the head of a managing agency shall assign an attached unit to prepare an investment policy proposal report;

b/ The managing agency shall collect written opinions of the Ministry of Planning and Investment, Ministry of Finance and related agencies;

c/ The minister or the head of the managing agency shall form an appraisal council, or assign a functional unit to appraise the investment policy proposal report, funding sources and fund-balancing capacity;

d/ The minister or the head of the managing agency shall direct the unit specified at Point a of this Clause to complete the investment policy proposal report based on the appraisal opinions and opinions of the Ministry of Planning and Investment, Ministry of Finance and related agencies;

dd/ Based on the appraisal opinions of the functional unit and opinions of the Ministry of Planning and Investment, Ministry of Finance and related agencies, the minister or the head of the managing agency shall make investment policy decision.

5b. The order and procedures for making investment policy decision for group-B or group-C investment projects to be funded with ODA or concessional loans that fall within the competence of provincial-level People’s Councils are as follows:

a/ The chairperson of a provincial-level People’s Committee shall assign an attached unit to prepare an investment policy proposal report;

b/ The provincial-level People’s Committee shall collect written opinions of the Ministry of Planning and Investment, Ministry of Finance and related agencies;

c/ The chairperson of the provincial-level People’s Committee shall form an appraisal council, or assign a functional unit to appraise the investment policy proposal report, funding sources and fund-balancing capacity;

d/ The chairperson of the provincial-level People’s Committee shall direct the unit specified at Point a of this Clause to complete the investment policy proposal report based on the appraisal opinions and opinions of the Ministry of Planning and Investment, Ministry of Finance and related agencies;

dd/ Based on the appraisal opinions of the functional unit and opinions of the Ministry of Planning and Investment, Ministry of Finance and related agencies, the provincial-level People’s Committee shall propose the provincial-level People’s Council to make investment policy decision.”

6. To amend Clause 7, Article 14 as follows:

“7. In case there is/are a change(s) in contents of a prefeasibility study report or an investment policy proposal report for a national target program, national important project, public investment program; or program and group-A investment project to be funded with ODA or concessional loans as compared to the principal contents of the program or project proposal approved by the Prime Minister as specified at Point d, Clause 2, Article 13: The managing agency shall include a detailed report on the change(s) in the request for appraisal of the prefeasibility study report or investment policy proposal report for the program or project under Point b, Clause 1, Article 15 of this Decree.”

7. To add Clause 7a to Article 14 as follows:

“7a. In case there is/are a change(s) in the contents of an investment policy proposal report for a project other than that specified in Clause 7 of this Article as compared to the principal contents of the program or project proposal approved by the Prime Minister as specified at Point d, Clause 2, Article 13: The managing agency shall carry out the order and procedures for adjusting the program or project proposal under Clause 5, Article 13 before proceeding with the order and procedures for submitting the investment policy for the program or project to a competent authority for decision.”

8. To add Point b1 to Clause 1, Article 15 as follows:

“b1/ Written opinions of the Ministry of Planning and Investment, Ministry of Finance and related agencies (for group-B and group-C investment projects to be funded with ODA or concessional loans).”

9. To amend Point c, Clause 1, Article 15 as follows:

“c/ The managing agency’s report on results of self-appraisal of the investment policy for the program or project to be funded with ODA or concessional loans (for national target programs, national important projects, public investment programs; programs and group-A investment projects to be funded with ODA or concessional loans, and other programs and investment projects to be funded with ODA or concessional loans subject to investment policy decision by the Prime Minister).”

10. To add Point a1 to Clause 4, Article 15 as follows:

“a1/ Conformity with the principal contents of the program or project proposal approved by a competent authority.”

11. To amend Point b, Clause 7, Article 15 as follows:

“b/ Report to the minister, the head of the managing agency or the provincial-level People’s Council to ask for permission to extend the time limit for appraising the investment policy proposal report, for projects subject to investment policy decision by ministers, heads of managing agencies or provincial-level People’s Councils.”

12. To amend Article 17 as follows:

“1. After the investment policy for a project is approved and before a treaty or an agreement on ODA or concessional loans is signed, in case of necessity to shorten the preparation time for bidding, a competent person may organize the formulation, appraisal and approval of a contractor selection plan as a basis for the project owner to organize contractor selection preparation activities, including:

a/ Formulating, appraising and approving the dossier of invitation for expression of interest or dossier of invitation to prequalification (if any);

b/ Determining a shortlist for procurement activities of the project (if any);

c/ Formulating, appraising and approving of the bidding dossier and dossier of requirements.

2. The bases for formulating, appraising and approving a contractor selection plan for activities to be carried out in advance include:

a/ The decision approving the investment policy for the project;

b/ The donor’s non-objection opinion on the formulation, appraisal and approval of the contractor selection plan for activities to be carried out in advance.

3. Contractors that participate in expression of interest or participate in prequalification shall pay all expenses for preparation and submission of dossiers of expression of interest or dossiers of participation in prequalification. In case the shortlist has been selected but the treaty or agreement on ODA or concessional loans of the project is not concluded, the project owner shall notify the contractors on the shortlist of the non-organization of bidding.

4. The project owner may issue bidding dossiers and dossiers of requirements only after the treaty or agreement on ODA and concessional loans of the project is concluded.”

13. To add Clause 2a to Article 19 as follows:

“2a. For programs and group-A projects:

a/ In case the adjustment of the project implementation period does not change the other principal contents of the investment policy decision; or the reduction of ODA loans or concessional loans gives rise to the financial obligations but does not change the other principal contents of the investment policy decision as specified in Article 18 of this Decree: The managing agency shall send a request for the adjustment and a report on the reason of the adjustment to the Ministry of Planning and Investment for the latter to collect opinions of the Ministry of Finance and submit the request to the Prime Minister for consideration and decision;

b/ In case the adjustment of a program or project leads to a change in principal contents of the investment policy decision other than those specified at Point a, Clause 2a of this Article: The managing agency shall adjust the investment policy according to the order and procedures specified at Point c, Clause 2, Article 34 of the Law on Public Investment.” 

14. To amend Clause 3, Article 19 as follows:

“3. For programs and projects subject to investment policy decision by the Prime Minister, except programs and group-A projects:

a/ In case the adjustment of the project implementation period does not change the other principal contents of the investment policy decision; or the reduction of ODA loans or concessional loans gives rise to the financial obligations but does not change the other principal contents of the investment policy decision but giving rise to financial obligations: The managing agency shall send a request for the adjustment and a report on the reason of the adjustment to the Ministry of Planning and Investment for the latter to collect opinions of the Ministry of Finance and submit the request to the Prime Minister for consideration and decision;

b/ In case the adjustment of a program or project leads to a change in principal contents of the investment policy decision other than those specified at Point a, Clause 3 of this Article: The managing agency shall adjust the investment policy according to the order and procedures specified in Clause 4, Article 14 of this Decree. 

The dossier submitted to a competent authority and the time limit for deciding on adjustment of investment policy for the program or project must comply with Articles 15 and 16 of this Decree; the dossier must clearly state the following contents: reason for the investment policy adjustment; adjusted contents corresponding to principal contents of the prefeasibility study report and investment policy proposal report.”

15. To amend Clauses 4 and 5, Article 19 as follows:

“4. For a project subject to investment policy decision by a minister, the head of a managing agency or a provincial-level People’s Council: In case the adjustment leads to a change in principal contents of the investment policy decision, the managing agency shall adjust the investment policy according to the order and procedures specified in Clauses 5a and 5b, Article 14 of this Decree. 

5. In case the total investment amount of a program or project is adjusted due to exchange rate fluctuation; or the reduction of ODA loans or concessional loans does neither give rise to financial obligations nor change the other principal contents of the investment policy decision specified in Article 18 of this Decree, the managing agency is not required to carry out the order and procedures for adjustment of the program or project proposal and decision on investment policy adjustment.”

16. To add Point c to Clause 2, Article 23 as follows:

“c/ Approve documents of technical assistance projects to be funded with non-refundable ODA of foreign donors for preparation of investment projects under their agencies’ management and be not required to carry out the order and procedures for deciding on implementation policy.”

17. To add Clause 3 to Article 23 as follows:

“3. Provincial-level People’s Councils shall approve documents of technical assistance projects to be funded with non-refundable ODA of foreign donors for preparation of investment projects under localities’ management and not be required to carry out the order and procedures for deciding on implementation policy.”

18. To amend Point dd, Clause 2, Article 26 as follows:

“dd/ Based on appraisal results, the head of the managing agency shall decide to approve project or non-project activity documents. For technical assistance projects for preparation of investment projects under localities’ management, based on appraisal results, the provincial-level People’s Committee shall submit the project document to the provincial-level People’s Council for approval.”

19. To add Point a1 to Clause 1, Article 33 as follows:

“a1/ The Ministry of Finance shall propose the Prime Minister to decide the negotiation on an agreement on ODA loans or concessional loans. A dossier for the negotiation to be submitted to the Prime Minister must comprise: a written proposal of the negotiation policy; a draft agreement on ODA loans or concessional loans; and the project investment decision.”

20. To amend Point b, Clause 1, Article 33 as follows:

“b/ Based on the Prime Minister’s approval of negotiation, the Ministry of Finance shall consult the Ministry of Foreign Affairs, Ministry of Justice and related agencies on the draft agreement on ODA loans or concessional loans. The consulted agencies shall reply in writing to the Ministry of Finance within 5 days after receiving the consultation request and related documents.”

21. To amend Clauses 2 and 3, Article 48 as follows:

“2. Managing agencies shall send to the Ministry of Planning and Investment documents on the use of surplus funds of ODA loan- or concessional loan-funded programs and projects. The Ministry of Planning and Investment shall assume the prime responsibility for summing up opinions of the Ministry of Finance, related agencies and foreign donors for submission to the Prime Minister for the latter to consider and decide on the use of surplus funds.

3. Based on the Prime Minister’s decision on the use of surplus funds of an ODA loan- or concessional loan-funded program or project, the managing agency shall carry out the order and procedures for deciding on investment policy (for new projects), or adjusting investment policy (for the use of surplus funds to promote the efficiency of ongoing projects) according to its competence to decide on investment policy and adjust investment policy, and carry out the order and procedures for deciding on investment policy or adjusting investment policy specified in Articles 14, 15, 16, 18 and 19 of this Decree.”

22. To add Clause 3a to Article 48 as follows:

“3a. For the use of surplus funds of non-refundable ODA-funded programs and projects, based on opinions of donors, the Ministry of Planning and Investment and Ministry of Finance, managing agencies shall carry out the order and procedures for deciding on investment policy (for new projects), or adjusting investment policy (for the use of surplus funds to promote the efficiency of ongoing projects) according to their competence to decide on investment policy and adjust investment policy, and carry out the order and procedures for deciding on investment policy or adjusting investment policy specified in Articles 14, 15, 16, 18 and 19 of this Decree.”

23. To replace Appendix II to Decree No. 114/2021/ND-CP with the new one below:

“Appendix II

FORM OF PROPOSAL FOR A PROGRAM OR PROJECT TO BE FUNDED WITH ODA LOANS OR CONCESSIONAL LOANS

I. MAJOR INFORMATION

1. Name of the program/project (in Vietnamese and English).

2. Managing agency, proposing unit and program/project owner (expected): name, address and other related information.

3. Foreign donors and co-donors (if any) expected to support the implementation of the program/project.

II. BASES FOR PROPOSAL

- Significance, necessity and feasibility of the program/project in terms of economic, society, environment, science and technology, and relevant master plans in accordance with the planning law.

- The efforts already/being exerted to solve the arising problems.

- Other ongoing programs/projects in the same field (if any).

- Expected foreign donors (clearly stating reasons for using ODA loans and concessional loans of donors).

III. CONTENTS OF PROPOSAL

1. Objectives, location, scale and scope of the program/project: description of general and specific objectives, and location, scale and scope of the program/project.

2. Expected main outcomes of the program/project: summary of expected main outcomes.

3. Estimated implementation period of the program/project (stating the construction period and operation period).

4. Expected total amount of funds and structure of funding sources for implementation of the program/project and proposed financial mechanism:

- Total amount of funds: non-refundable ODA, ODA loans, foreign concessional loans, and counterpart funds specified by original currency and equivalent value in Vietnam dong and US dollar (applying the exchange rate announced by the Ministry of Finance at the time of making the proposal).

- Loan term and conditions: type of estimated interest rate (floating/fixed), expected interest rate and charges (if any); for programs/projects that are expected to use loans with floating interest rate, the floating interest rate stated in the proposal must include the base floating interest rate (Sibor, Eurobor, etc.) and the reference-rate margin in the market at the time of loan proposal; estimated loan period and grace period of the loan.

- Proposed domestic financial mechanism, projected annual disbursement schedule (associated with the program/project implementation period).

- Plan on fund balancing for loan repayment.

5. Plan on use of loans, plan on use of counterpart funds (including a plan for allocating equity), plan for loan security, plan for debt repayment, and proposed agency authorized to on-lend loans (with or without credit risks) in case the program/project proposal is for on-lending loans to state enterprises and public non-business units.

6. Impact assessment:

- Preliminary evaluation of economic, social and environmental efficiency (if any).

- Preliminary assessment of impacts on the medium-term public investment plan of the proposing agency.”

Article 2. To annul a number of clauses of, and replace an appendix to, Decree No. 114/2021/ND-CP

1. To annul Point c, Clause 2, Article 12; Clause 3, Article 12; Clause 5, Article 14; Clause 10, Article 18; and Clause 2, Article 98.

2. To replace Appendix II.

Article 3. Implementation provisions

1. This Decree takes effect on March 1, 2022.

2. Transitional provisions:

a/ For national target programs, national important projects, public investment programs; programs and group-A investment projects; and programs and projects subject to the Prime Minister’s approval for which proposals or investment policy have or has been approved before the effective date of this Decree, it is allowed to proceed with the subsequent order and procedures in accordance with Decree No. 114/2021/ND-CP;

b/ For ODA loan- or concessional loan-funded programs or projects for which proposals have been approved by the Prime Minister, if such proposals need to be modified or adjusted in the course of implementation, such modification or adjustment must comply with this Decree’s provisions on adjustment of program and project proposals.

c/ For programs and projects other than those specified at Point a, it is not required to adjust program or project proposals under Clause 4, Article 1 of this Decree;

d/ For group-B or group-C public investment projects funded by ODA or concessional loans of foreign donors for which the investment policy has been decided by the Prime Minister before the effective date of this Decree, the agencies or persons competent to decide on investment policy specified in Clause 2, Article 1 of this Decree may adjust investment policy and shall carry out the order and procedures for adjustment of investment policy under Clause 5, Article 1 of this Decree;

dd/ For group-B or group-C public investment projects funded by ODA or concessional loans for which the formulation and appraisal procedures have been completed and the written appraisals serving as a basis for investment policy decision or investment policy adjustment under Articles 14, 15, 16, 18 and 19 of Decree No. 114/2021/ND-CP have been issued before the effective date of this Decree, it is required to continue carrying out procedures for submitting them to the Prime Minister for consideration and decision under Decree No. 114/2021/ND-CP.

Article 4. Organization of implementation

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

On behalf of the Government
For the Prime Minister
Deputy Prime Minister
TRAN LUU QUANG