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Apr 26, 2018 / 11:54

Proposal for private sector to access ODA

The Ministry of Planning & Investment (MPI) considers to allow the private sector accessing the official development assistance (ODA) and other preferential loans.

Under the draft Decree on management and utilization of the ODA, private enterprises can access ODA and preferential loans within the credit limit to carry out projects in conformity with international laws and regulations on ODA and preferential loans. 
 
Private enterprises could access preferential loans in the future.
Illustration photo.
Consequently, private sectors can take part in project under the form of private - public partnership (PPP) financed by ODA as a partner in joint ventures, preferential loans as state's investment; and relending ODA through commercial banks on the condition that the credit risk lies on the bank.

The draft Decree also stipulates a 7 - step procedures in managing and utilizing ODA and preferential loans, including: mobilizing capital; setting up and choosing project's proposal; appraising and approving project; negotiating and signing international agreements on the financing; project management and finalizing the project. 

In 1993, Vietnam start getting financial supports from multilateral and bilateral financial institutions such as the World Bank, the Asian Development Bank, International Monetary Funds, as well as from Japan, France, Denmark and Canada. 

In July 2017, World Bank announced the cut of preferential ODA to Vietnam as the country has turned to lower middle income status. Consequently, Vietnam will be able to access less preferential loans and move toward getting loans at market conditions. 

Those already-borrowed ODA loans will be transferred into those with shorter repayment period or with higher interest rates

As at the end of 2017, Vietnam has a total of 2,594 projects financed by preferential ODA, according to MPI. However, only government agencies and organizations in the public sector can access ODA and preferential loans. 

Specifically, a total of 1,300 projects  at ministerial level and 1,197 projects in provinces are allowed to access preferential ODA. 

Total foreign investment capital in the first quarter of 2018, including newly-registered, added and capital contributed by foreign investors, is at US$5.8 billion, decreasing 24.8% over the  the same period of last year, said the Foreign Investment Agency under MPI. 

Investors have invested in 17 fields and sectors, in which manufacturing and processing continued to attract substantial attention with investment capital of US$3.44 billion, accounting for 59.4% of total registered capital.

Followed by retail and wholesale with investment capital of US$531 million, then real estate with US$486 million. 

The data shows that 76 countries and regions have on-going projects in Vietnam, with Korea ranked first for US$1.84 billion, contributing to 31.6% of total investment. Hong Kong came in the second place with around US$689 million, while the third place belonged to Singapore with US$649 million.