Private enterprises can borrow ODA funds.
In addition to public sector agencies and organizations, private businesses can also borrow ODA funds and preferential loans from foreign donors.
According to the draft Decree on the management and use of official development assistance (ODA) and concessional loans currently being reviewed by the Ministry of Planning and Investment, the agency proposes that the private sector be allowed to access and utilize ODA and concessional loans from foreign donors.
Specifically, private enterprises can access and utilize ODA funds and preferential loans within the credit limit provided to domestic financial and credit institutions to carry out activities in accordance with international treaties and agreements on ODA funds and preferential loans, and comply with the lending procedures of financial and credit institutions.
Private enterprises participate as a capital contributor in public-private partnership (PPP) investment projects using ODA funds and preferential loans as state investment capital; as well as borrowing ODA funds through the commercial banking system where commercial banks bear the credit risk...
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A project to be implemented in Hanoi with preferential loan terms. |
The draft Decree also outlines a seven-step process for managing and utilizing ODA and concessional loans, including: fundraising; project proposal development and selection; project investment policy formulation, appraisal, and approval; negotiation and signing of international treaties and agreements on capital; project implementation management; and project completion.
Vietnam began borrowing aid from multilateral and bilateral financial institutions such as the World Bank (WB), the Asian Development Bank (ADB), the International Monetary Fund (IMF), and countries like Japan, France, Denmark, and Canada starting in 1993. In July 2017, the WB announced the termination of concessional ODA for Vietnam, replacing it with concessional loans at higher interest rates.
According to aggregated data from the Ministry of Planning, by the end of 2017, the whole country had 2,594 programs and projects funded by ODA loans and preferential loans. Of these, ministries and agencies accounted for nearly 1,300 projects and programs; localities accounted for 1,197 projects.
