Hanoi (VNA) - Vietnam has set ambitious growth targets and has significant demand for investment in infrastructure, green transition, and other areas. Thus unlocking official development assistance (ODA) and concessional loans has become increasingly urgent, heard a recent workshop.
The workshop was held by the Ministry of Finance on October 3 to introduce Decree No.242/2025/ND-CP on the management and use of ODA and foreign concessional loans. Issued on September 10, the decree introduces major reforms aimed at creating a more open, transparent, and efficient framework to unlock international resources for the country’s development.
Barriers that need to be addressed
Decree No. 242, effective from September 10, is considered an important step forward, replacing Decree No. 114/2021/ND-CP. This new decree aligns with the State Budget Law, the Public Investment Law 2024, and other related laws.
Over the past three decades, ODA and foreign concessional loans have played an undeniable role in Vietnam's socio-economic development. Numerous major national projects bear the clear mark of this funding. These include the Ben Luc-Long Thanh and Long Thanh-Dau Giay expressways, iconic bridges like Can Tho and My Thuan, as well as large urban environmental improvement projects such as those in Ho Chi Minh City and the Ben Thanh-Suoi Tien metro line. These projects have not only helped upgrade the country’s infrastructure but also created positive, widespread impacts, particularly in the central, Central Highlands, and Mekong Delta regions.
However, the process of mobilising, managing, and utilising ODA capital currently faces certain limitations.
Nguyen Quoc Phuong, Director of the ministry’s Department of Debt Management and External Economic Relations, stated that complex administrative procedures, slow disbursement progress, lack of coordination between agencies, and overlapping mechanisms are significant challenges that need to be urgently addressed. These issues create difficulties for project owners, ministries, sectors, and localities.
The issuance of Decree No. 242 is expected to help address these bottlenecks, facilitating the smooth flow of ODA and concessional loans in the near future.
Clearer and simpler regulations
Introducing the key changes of the new decree, Nguyen Trong Nghia, a representative of the department, mentioned that it focuses on four major breakthrough solutions. They include the simplification of administrative procedures, the acceleration of decentralisation and delegation of authority, and the allowance of the disbursement of funds through electronic platforms.
Nguyen Ba Hung, Chief Economist at the Asian Development Bank (ADB) in Vietnam, stated that the ADB is currently working with Ho Chi Minh City on a project to control urban flood drainage, which is in the preparation stage for investment decisions.
With the more flexible regulations in Decree 242, the ADB is optimistic that the project preparation process between ADB and the implementing agencies will be faster, Hung emphasised.
He also affirmed that ADB and the donor community maintain a close relationship with the Ministry of Finance and have provided advice during the process of modifying procedures. Additionally, he suggested the Government continue reviewing regulations of international agreements and treaties related to loan agreements, viewing this as a space for further effective reforms - better decentralisation, simpler procedures.
Acknowledging the proposals made at the workshop, the Director of the Department of Debt Management and External Economic Relations affirmed that the Ministry of Finance is committed to working closely with ministries, sectors, and localities during the implementation of Decree No. 242. It will provide guidance and promptly address any obstacles that arise in practice, while continuing institutional reforms to enhance public debt management capacity.
The ministry will also ensure a transparent and favourable legal environment that aligns with international standards, all for a sustainable and prosperous Vietnam, he added./.
