The National Assembly Standing Committee (NASC) has asked the legislature’s committees for Finance and Budget, Legislation, and the Ministry of Planning and Investment (MPI) to compile a draft resolution on adjusting the usage of Vietnam’s foreign-sourced capital, known as official development assistance (ODA) and concessional loans (CL), for 2016.
Under the draft, expected to be adopted next week at the latest, NASC agreed with the government’s proposal that a sum of nearly VND5.855 trillion ($266 million) of ODA and CLs will be removed from 11 ministries and 28 provinces and cities in 2016.
They are stripping these ODA and CL users because they have failed to boost disbursement as scheduled. Currently, they are below 50 per cent in disbursement for their projects.
This sum, together with another VND1.3 trillion ($59 million) worth of unallocated ODA and CLs, will be used for 17 state-funded projects in need of over VND2.5 trillion ($113.64 million). ODA and CL agreements between the government and donors terminate at the end of the year, which is the major impetus behind the shifts in funding.
Of this VND2.5 trillion ($113.64 million), VND811 billion ($37 million) will be allocated to the Ministry of Transport, while VND1.69 trillion ($76.82 million) will be used for projects in Hanoi and six other provinces: Tuyen Quang, Bac Kan, Phu Tho, Vinh Phuc, and Ninh Binh.
VND66 billion ($3 million) and VND106 billion ($48.2 million) will be given to the provinces of Lai Chau and Nam Dinh to help them carry out various state-financed projects.
Social Policy Bank and Vietnam Development Bank will also receive VND2.7 trillion ($122.7 million) and VND1.783 trillion ($81 million), respectively, so they can raise their chartered capital for further development.
NASC reported that in 2016, the total ODA and CLs for all state-funded projects in Vietnam are planned to come to VND50 trillion ($2.27 billion) by the legislature. Of this number, the National Assembly will allocate VND48.7 trillion ($2.2 billion) for ministries and localities.
The remaining VND1.3 trillion ($59 million) has yet to be scheduled.
According to the Ministry of Finance, so far this year, a sum of more than VND36 trillion ($1.64 billion) was disbursed by ministries and localities, hitting nearly 75 per cent of the government’s initial target.
The MPI reported that the total sum of ODA and CLs signed this year is forecast to hit nearly $6 billion, much higher than the $3.33 billion signed last year.
In the first three quarters of 2016, the figure was over $4.91 billion (including $4.89 billion in ODA loans and CLs, and $26.5 million in grants), which is 1.8 times higher than in last year’s corresponding period. Total ODA and CLs for the first three quarters of 2015 touched $2.73 billion (including $1.573 billion in ODA and CLs, and $17 million in grants).
The $4.91 billion includes $2.33 billion from the Japanese International Cooperation Agency, $2 billion from the World Bank, $171.13 million from the Asian Development Bank (ADB), $137.56 million from the French Development Agency (AFD), $87 million from KfW, and $52 million from KEXIM.