The Government will soon promote Official Development Agency (ODA) disbursement through commercial joint-stock banks.
"ODAcapital is mostly disbursed through State finance institutes with manylimitations and cumbersome procedures," Le Ngoc Hoan, a finance andinvestment expert, was quoted as saying in Dau Tu (Vietnam InvestmentReview) newspaper.
"Up to 2017, Vietnam will continue to receivepreferential loans from international finance institutes andGovernments. Therefore, how to effectively exploit ODA is veryimportant," he added.
Last year, Viet Nam disbursed 5.6 billionUSD from ODA but according to the Ministry of Planning and Investment,ODA loans were not fairly distributed among industries and localities.
In addition, slow ground clearance progress, changes and adjustments to projects prolonged projects and increased expenditures.
"Alongwith the fair distribution of ODA loans, related authorities like theministries of Finance and Planning and Investment should change theirpoint of view that ODA loans are just for state-owned enterprises,"Nguyen Hoang Hiep, Deputy General Director of Thai Son InvestmentConsulting company, said.
Since the beginning of this year, theGovernment has released policies to increase effectiveness for ODAdisbursement with a goal to reduce public debt in a sustainable way andspend 70 percent of ODA loans for social-economic development.
Ata meeting between the National Steering Committee about ODA andpreferential loans with six international banks at the beginning of theyear, Vietnamese authorities stressed that the preparation process willreceive more attention to ensure effectiveness and lower costs.
Themost important aspect in ODA disbursement is how to bring capital tothe appropriate enterprises and projects. This can help increaseeconomic effectiveness of business operations.
Furthermore, theGovernment is looking for good commercial joint-stock banks to deliverODA loans because they have a good understanding of localities, alongwith professional staff to manage projects.
HD Bank is the firstcommercial joint-stock bank which has been officially approved by theGovernment on behalf of the Finance Ministry to loan 3 trillion VND (141million USD) from the Japan International Cooperation Agency (JICA) tothe southern province of Dong Nai's Nhon Trach Water Supply project forthe second phase.
The project has total expenditures of 3.6 trillion VND (169 million USD) with 85 percent of capital from JICA.
"Withthis project, HD Bank has signed with the Ministry of Finance to cover20 percent of risk in order to reduce public debt," Tran Hoai Nam,Deputy General Director of HD Bank, said.
For other projects, theministry and bank will suffer varying degrees of risk (from 100 percentor less), depending on the agreement negotiated between the twosides.-VNA
"ODAcapital is mostly disbursed through State finance institutes with manylimitations and cumbersome procedures," Le Ngoc Hoan, a finance andinvestment expert, was quoted as saying in Dau Tu (Vietnam InvestmentReview) newspaper.
"Up to 2017, Vietnam will continue to receivepreferential loans from international finance institutes andGovernments. Therefore, how to effectively exploit ODA is veryimportant," he added.
Last year, Viet Nam disbursed 5.6 billionUSD from ODA but according to the Ministry of Planning and Investment,ODA loans were not fairly distributed among industries and localities.
In addition, slow ground clearance progress, changes and adjustments to projects prolonged projects and increased expenditures.
"Alongwith the fair distribution of ODA loans, related authorities like theministries of Finance and Planning and Investment should change theirpoint of view that ODA loans are just for state-owned enterprises,"Nguyen Hoang Hiep, Deputy General Director of Thai Son InvestmentConsulting company, said.
Since the beginning of this year, theGovernment has released policies to increase effectiveness for ODAdisbursement with a goal to reduce public debt in a sustainable way andspend 70 percent of ODA loans for social-economic development.
Ata meeting between the National Steering Committee about ODA andpreferential loans with six international banks at the beginning of theyear, Vietnamese authorities stressed that the preparation process willreceive more attention to ensure effectiveness and lower costs.
Themost important aspect in ODA disbursement is how to bring capital tothe appropriate enterprises and projects. This can help increaseeconomic effectiveness of business operations.
Furthermore, theGovernment is looking for good commercial joint-stock banks to deliverODA loans because they have a good understanding of localities, alongwith professional staff to manage projects.
HD Bank is the firstcommercial joint-stock bank which has been officially approved by theGovernment on behalf of the Finance Ministry to loan 3 trillion VND (141million USD) from the Japan International Cooperation Agency (JICA) tothe southern province of Dong Nai's Nhon Trach Water Supply project forthe second phase.
The project has total expenditures of 3.6 trillion VND (169 million USD) with 85 percent of capital from JICA.
"Withthis project, HD Bank has signed with the Ministry of Finance to cover20 percent of risk in order to reduce public debt," Tran Hoai Nam,Deputy General Director of HD Bank, said.
For other projects, theministry and bank will suffer varying degrees of risk (from 100 percentor less), depending on the agreement negotiated between the twosides.-VNA
