Prioritize the use of ODA and preferential loans for the agricultural sector.
On the morning of December 6, the Ministry of Agriculture and Rural Development held a plenary conference of the International Support Group (ISG) 2024 to prioritize the use of ODA capital and preferential loans for the Agriculture and Rural Development sector in the 2026-2030 period.
The conference was held in person and online to 63 provinces and cities across the country. Comrade Le Minh Hoan - Member of the Party Central Committee, Minister of Agriculture and Rural Development and Ms. Mariam Sherman - Country Director of the World Bank in Vietnam, Cambodia and Laos - chaired the conference; Attending were representatives of ministries, departments and central agencies; Representatives of international partners and relevant embassies.
Attending at Nghe An bridge were representatives of the Department of Agriculture and Rural Development and related departments and branches.
Focus on improving livelihoods and responding to climate change
Speaking at the opening of the Conference, the Minister of Agriculture and Rural Development said that this is a high-level event held annually between the Ministry of Agriculture and Rural Development and foreign partners to exchange and share policy orientations and priorities of both sides to promote cooperation and enhance resource coordination, contributing to promoting the development of Vietnamese agriculture.
In 2024, in the context of ODA and preferential loans tending to decrease, shifting to other types of investment and support, while the state budget is still unable to allocate enough for the tasks of the agriculture and rural development sector, the Conference focused on the goal of determining the priorities of partners and donors, the guiding viewpoints and orientations for the priority use of ODA and preferential loans for the agricultural sector of the Government in the coming period, creating a premise for developing a plan to mobilize and effectively use ODA capital and preferential loans for the agricultural sector.
During the 2016-2020 period, the Ministry approved and signed 5 loan programs and projects with a total value of 826 million USD, including 662 million USD in loans.
The 2021-2025 period will mainly focus on proposing and preparing new projects, and no loan agreements have been signed yet. The total expected loan capital for new projects under preparation is about 2 billion USD, non-refundable capital is about 58 million USD, and counterpart capital is about 478 million USD. Of which, 5 projects have been approved by competent authorities for project proposals with a total loan capital of about 750 million USD.
Regarding non-refundable aid, the Ministry of Agriculture and Rural Development currently has 112 projects under implementation (approved from 2016 to present) with a total non-refundable capital of about 300 million USD. Currently, the approval procedures for 32 more projects with aid capital of about 9 million USD are in progress.
According to the Ministry of Agriculture and Rural Development, the proportion of ODA capital in the total development investment capital of the Ministry was at one point approximately 50%. Most of the ODA loans were used for investment projects in infrastructure development, supporting production promotion, hunger eradication, poverty reduction, livelihood improvement, climate change response, natural disaster and epidemic prevention, ensuring hygiene and food safety, etc. Supporting the development and improvement of policy institutions, and capacity building for the sector from the central to local levels.
The expected public investment plan for new projects using foreign capital in the 2026-2030 period is about 2.16 billion USD, including:
1. Transition from phase 2021-2025 and expected to be completed and put into use in phase 2026-2030: approximately 161 million USD.
2. The project is preparing to invest in the 2026-2030 period of about 2 billion USD, including:
- The project team has approved the Project Investment Proposal and/or Policy including 5 projects: about 740 million USD.
- The project team is submitting for approval the Project Proposal including 7 projects: 1,260 million USD.
Nghe An wants to build infrastructure to serve agriculture
In Nghe An, in recent years, the period 2010-2025 has received direct attention and support from the Ministry of Agriculture and Rural Development. Nghe An province has been able to access and borrow preferential ODA capital from partners such as WB, ADB, JICA, KFW... to invest in restoring and upgrading the irrigation infrastructure system to serve agricultural production, aquaculture and respond to natural disasters and global climate change; develop and protect sustainable forests; and value agricultural products in a market-oriented manner.
In particular, the JICA Northern Nghe An Irrigation Project (JICA2) invested 5,025 billion VND to restore and upgrade the entire Northern Nghe An irrigation system, which was built during the French colonial period in the 1930s and is the largest irrigation system in Nghe An province. The project completed its investment in July 2023 and has been very effective after investment.
Currently, most of the large construction systems in the province have been built for a long time, are seriously degraded, and cannot meet the demand. The demand for investment resources is very large, while Nghe An province is still a difficult province, prioritizing public investment capital to build and restore infrastructure serving agriculture is still limited and difficult. Therefore, the general direction of the provincial leaders in the next period, especially the period 2026-2030, is to prioritize mobilizing preferential ODA loans for investment.
However, during the mobilization process, there are still some difficulties regarding interest rates according to regulations, counterpart costs in the total investment of the project...
Nghe An proposed that the Government direct relevant ministries and branches to advise on adjusting regulations on loan interest rates and counterpart fund usage expenses in the direction of partially supporting loan interest rates for localities, reducing counterpart fund usage in the total investment and having a support mechanism from the Central Government. It is requested that ministries and branches remove obstacles related to the management, use and exploitation of irrigation infrastructure assets in Decree 129/2017/ND-CP.
Nghe An hopes to soon invest in projects that have submitted investment proposals for the 2025-2030 period:
1. Restoring and upgrading the Nam Nghe An irrigation system, with a total investment of about 3,500 billion VND, borrowed from the Japan International Cooperation Agency (JICA).
2. Sustainable Fisheries Development (FSDP), total investment of about 500 billion VND, loan from WB.
3. The Climate Resilient and Inclusive Water Infrastructure Project for Rural Smallholders in Nghe An Province (CRWIS), with a total investment of approximately VND 800 billion, is funded by concessional loans from the International Fund for Agricultural Development (IFAD) and the AF Grant Fund.
4. Sustainable rural clean water project and climate change response in Nghe An province, total investment of about 886.3 billion VND, loan from WB.
