New regulations on using ODA and concessional loans from foreign donors

LEGAL UPDATES

New regulations on using ODA and concessional loans from foreign donors

On December 16th, 2021, the Government issued Decree No.114/2021/ND-CP on using the official development assistance (ODA) and concessional loans from foreign donors (“Decree 114”). The ODA capital will be prioritized for infrastructure, health, education and environment development. Specifically:

(i) Methods of providing ODA and concessional loans including: Programme; Project; Non-project; Budget support.

(ii) Non-refundable ODA capital: 

  • To be given priority to use to implement programs and projects on socio-economic infrastructure development; strengthen ability;
  • Supporting policy, institutional and innovation;
  • Natural disaster risk prevention and mitigation, disaster relief, disease prevention; adapting to climate change;
  • Green growth;
  • Creative and innovation;
  • Social security;
  • Preparing investment projects or being co-financer for projects using concessional loans to increase the concessional component of loans;
  • Supporting policy, institutional and innovation;
  • Natural disaster risk prevention and mitigation, disaster relief, disease prevention; adapting to climate change.

(iii) ODA loan: 

To be given priority to use for programs and projects in the fields of health, education, vocational education, adaptation to climate change, environmental protection, essential economic infrastructure that has no ability to no direct return of capital.

(iv) Concessional loans 

To be given priority to use for programs, loan projects to on-lending in accordance with the law on on-lending of ODA loans and foreign concessional loans of the Government; programs and projects under the expenditure assignments of the state budget in the field of socio-economic infrastructure development.

Decree 114 takes effect from December 16th, 2021.

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