Orientation to attract, manage and use ODA and concessional loans

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Illustrative photo.

About VND527.1 trillion, over US$22.9 billion, in foreign official development assistance, ODA, and concessional loans will be allocated during the 2011 - 2025 period.

Of which, loans allocated from the central budget totals VND305,000 billion, while on-lending is VND222,000 billion.

Pursuant to Resolution 29/2021/QH15, dated July 28, 2021 of the National Assembly on the medium-term public investment plan for 2021-2025, out of VND300,000 billion of ODA and concessional loans granted by foreign donors from the central budget, VND270,000 billion is allocated for transitional and new projects and VND30,000 billion is reserve capital.

The allocation of ODA and concessional loans for 2021-2025 will be complied with Decree 56/2020/ND-CP, dated May 25, 2020.

Non-refundable ODA is used for the execution of programs and projects for development of socio-economic infrastructure, capacity improvement, institutional and administrative reform, natural disaster recovery and preparedness, climate change adaptation, social security, preparation for investment projects or sponsoring projects funded by concessional loans to increase their grant element.

ODA loans is used for projects for healthcare, education vocational training, climate change adaptation, environmental protection and essential traffic infrastructure investment.

Concessional loans are used for on-lending programs/projects, in accordance with regulations, on on-lending ODA loans and foreign concessional loans of the Government. Infrastructure development programs/project fall under the spending plan of State budget.

In addition, based on actual needs, the non-refundable ODA is prioritized for disasters, pandemics, green growth and creative innovation in this period.

Orientation to allocate ODA by economic region

The allocation of ODA and concessional loans for 2021-2025 will be implemented by economic region. Accordingly, non-refundable ODA and ODA loans are prioritized to allocate for localities with difficult socio-economic development conditions, through the allocation mechanism from the central budget.

The ODA and concessional loans are prioritised for implementing infrastructure improvement projects, helping disadvantaged regions and localities to develop the economy and gradually catching up with other regions and localities. They will also prioritize regions and localities with a low ability to mobilize domestic capital and projects supporting in handling the problems in the process of rapid urbanization in the provinces.

The ODA and concessional loans are prioritized for developing localities and projects suitable to their development level and for increasing capacity to absorb and use ODA and concessional loans of the locality, inter-regional and inter-provincial connection projects in the Northwest, Central Highlands and Mekong River Delta regions for further development.