DECREE

ON AMENDMENTS TO DECREE NO. 97/2018/ND-CP DATED JUNE 30, 2018 ON ON-LENDING OF THE GOVERNMENT’S ODA LOANS AND FOREIGN CONCESSIONAL LOANS

Pursuant to the Law on Organizing of the Government dated June 19, 2015; the Law on amendments to the Law on Organization of Government and the Law on Organization of Local Governments dated November 22, 2019;

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

Pursuant to the Law on State Budget dated June 25, 2015;

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

At the request of the Minister of Finance;

The Government promulgates a Decree on amendments to the Decree No. 97/2018/ND-CP dated June 30, 2018 on on-lending of the Government's ODA loans and foreign concessional loans.

...

...

...

1. Clause 3 Article 16 shall be amended as follows:

“3. The value of the collateral shall be at least 120% (one hundred and twenty per cent) of the outstanding debt of the sub-loan, if this loan is granted to an enterprise; and shall be at least 100% (one hundred per cent) of the outstanding debt of the sub-loan, if this sub-loan is granted to a public sector entity. During the sub-loan period, if the value of the collateral is reduced to be lower than the percentage mentioned above, the end borrower shall supplement the collateral to ensure the minimum value.”

2. Clause 4 Article 16 shall be amended as follows:

“4. No collateral is required in any of the following cases:

a) An on-lent loan granted to the People’s Committee of province;

b) An on-lent loans acknowledged by a project management board affiliated to Ministry and then transferred to the People’s Committee of province.”

3. Clause 1 Article 21 shall be amended as follows:

“1. The on-lending rate for the People’s Committee of the province:

a) The local government having the rate of additional funding from the central government budget to total local government budget expenditure equaling 70% or more shall be entitled to 10% of the on-lent capital derived from the ODA loan or concessional loan;

...

...

...

c) The local government having the rate of additional funding from the central government budget to total local government budget expenditure below 50% shall be entitled to 50% of the on-lent capital derived from the ODA loan or concessional loan;

d) The local government having the rate of revenues regulated into central budget shall be entitled to 70% of the on-lent capital derived from the ODA loan or concessional loan;

d) Hanoi city and Ho Chi Minh city: shall be entitled to 100% of the on-lent capital deprived from the ODA loan or concessional loan;

e) With regard to programs and projects in conjunction with sustainable development adapted to climate change in certain local areas in Mekong Delta that need the support from the Government as prescribed in the Resolution No. 41/NQ-CP dated April 1, 2021, the on-lending rate shall be decided by the Government but not less than 10%.”

4. Point c shall be added to Clause 2 Article 21 as follows:

“c) If other on-lending rates apply to the entities prescribed in point a, point b clause 2 of this Article, in the course of developing financial mechanism for ODA loans and concessional loans, upon the proposal of the agency in charge and end borrower, the Ministry of Finance shall take charge and cooperate with the Ministry of Planning and Investment and relevant agencies in seeking decision from the Government on the on-lending rates on a case-by-case basis but not less than 10%.”

5. Clause 3 shall be added to Article 23 as follows:

 “3. Notwithstanding clause 1 of this Article, the duly-authorized intermediary not bearing the credit risks shall have the following responsibilities:

a) Assess the sub-loans granted to enterprises, public sector entities and send the assessment reports to the Ministry of Finance; the reports shall affirm the capital recovery of the projects; capacity to repay the sub-loans of the enterprises, public sector entities;

...

...

...

c) Assess the loan security plan; register, manage and realize the collateral and other assets pledged by the end borrower as the security for the sub-loan as prescribed in the law on collateral;

d) Inspect the use of sub-loans by the end borrower through examining the sub-loan disbursement documents, except for those controlled by the State Treasury;

dd) Supervise the sub-loan, financial position of the end borrower, the existing operation of the project invested by the sub-loan; carry out periodic or ad-hoc inspection of the sub-loan, the end borrower and send a report to the Ministry of Finance;

e) Assess the sub-loan settlement plan (if any) of the end borrower and the report on the assessment of sub-loan settlement plan, clearly state the appropriateness or non-appropriateness of the sub-loan settlement plan and send it to the Ministry of Finance for seeking a decision from the competent authority.”

6. Clause 1 Article 31 shall be amended as follows:

“1. Within 30 days from the date on which the on-lending agreement is signed with the public sector entity or enterprise, the end borrower and the duly-authorized intermediary shall send a copy of the loan security contract to the Ministry of Finance.”

7. Clause 1 Article 32 shall be amended as follows:

“1. The end borrower which is the People’s Committee of the province shall send reports on on-lending situation to the Ministry of Finance, the end borrower which is a public sector entity or an enterprise shall send reports to the duly-authorized intermediary twice a year, the first report shall be sent no later than July 31 of the year for the reporting period from January 1 to June 30, and then second report shall be sent no later than February 15 of the following year for the reporting period from July 1 to December 31, including:

a) Loan drawdown, repayment, outstanding amount of the sub-loan;

...

...

...

c) Financial positions, debts of the end borrower, including debt balance, past due loans (if any) to any creditor;

d) Existing operation of the projects, management and use of assets of the projects and assets formed by borrowed capital.”

8. Clause 2 Article 32 shall be amended as follows:

“2. The duly-authorized intermediary shall send reports with the contents specified in clause 1 of this Article to the Ministry of Finance twice a year, the first report shall be sent no later than August 31 of the year for the reporting period from January 1 to June 30 and the second report shall not sent no later than February 28 of the following year for the reporting period from July 1 to December 31 of the reporting year or report to it immediately if any problem occurs and affects the solvency of each on-lending project or end borrower.”

9. Point b Clause 1 Article 35 shall be amended as follows:

“b) If two or three loan installments are missed: Where the end borrower is an enterprise granted the sub-loan by the duly-authorized intermediary in which the intermediary bears the credit risks, at least 15 days before the subsequent loan installment, it shall at least maintain account balance as follows:

- Three subsequent loan installments if two loan installments are missed;

- Three subsequent loan installments if three loan installments are missed.”

10. Article 3 of the Appendix II shall be amended as prescribed in the Appendix hereto.

...

...

...

Article 3. Entry into force

1. This Decree comes into force as of October 1, 2021.

2. The programs and projects with the investment policies approved by the competent authority, the finance mechanism, loan eligibility conditions before the date of entry into force of the Decree shall be further implemented as per the approval of the competent authority.

3. With regard to overdue sub-loans of the programs and projects which have been given ODA loans or concessional loans before the effective date of the Law on Public Debt Management 2009 but it fails to deal with these sub-loans completely, the intermediary borrower shall make a risk reduction plan on a case-by-case basis, and send it to the Ministry of Finance, and then the Ministry and relevant agencies shall seek decision from the Prime Minister.

Article 4. Implementation

Ministers, Heads of ministerial-level agencies, Heads of Governmental agencies, the Presidents of People’s Committees of provinces or central-affiliated cities, relevant enterprises, organizations and individuals shall implement this Decree.

ON BEHALF OF THE GOVERNMENT
PP. PRIME MINISTER
DEPUTY PRIME MINISTER




Pham Binh Minh

...

...

...

APPENDIX

(Enclosed with Government’s Decree No. 79/2021/ND-CP)

Article 3 Appendix II in the Government’s Decree No. 97/2018/ND-CP dated June 30, 2018 shall be amended as follows:

“Article 3. Responsibilities of the Authorized Party

The Authorized Party shall comply with the regulations on responsibilities of the authorized duly-authorized intermediary as prescribed in the Law on Public Debt Management and the Government’s Decree No. 97/2018/ND-CP dated June 30, 2018 on on-lending of the Government's ODA loans and foreign concessional loans, clause 5 Article 1 of the Government’s Decree No. 79/2021/ND-CP dated August 16, 2021 on amendments to the Government’s Decree No. 97/2018/ND-CP dated June 30, 2018 and certain responsibilities as follows:

1. Within 30 working days from the date on which this Contract and/or the On-Lending Agreement is signed in accordance with the conditions prescribed in Article 1. Within 15 days after signing the On-lending Agreement with the end borrower, the Authorized Party shall send 01 copy of this Agreement to the Principal for cooperation in supervising the process.

2. The Authorized Party shall rely on the notice of loan withdrawal sent by the Principal to announce and acknowledge debts with the end borrower.

3. The Authorized Party shall recover and repay debts to the Principal within the period of time specified by the Government from the date on which the Authorized Party receives the principal, interest, charges of foreign loans and the charges required to be collected and specified in Article 1 from the end borrower, and after it being entitled to the management fees of sub-loans which are specified in the Government's Decree No. 97/2018/ND-CP dated June 30, 3018.

4. The Authorized Party shall do the debt reconciliation with the end borrower quarterly, including the disbursement amount, amount of acknowledged debt, repayment amount, and amount of outstanding loans in a period and the cumulative outstanding loans.

...

...

...

6. Once a year, at the time of formulating the state budget estimates, the Authorized Party shall aggregate borrowing and repayment plans of end borrowers for the Principal to include them in an annual plan for on-lending, repayment, and sub-loan limits of the Government.”