Private businesses can borrow capital from official development assistance (ODA) and preferential loans from foreign donors. (Photo: vneconomy.vn)

Hanoi (VNA) - Private businesses can borrow capital from official development assistance (ODA) and preferential loans from foreign donors.

This recommendation is part of a draft decree on the management and use of ODA and preferential loans issued by the Ministry of Planning and Investment (MPI). It has been published to get the feedback of the public and relevant agencies.

If the draft decree is approved by the Government, private enterprises will be able to access and use ODA and preferential loans within the lending limits, which are allowed for other domestic and financial institutions, to carry out activities in accordance with international treaties and agreements on ODA capital and preferential loans and in compliance with the lending process of financial and credit institutions.

The private enterprises will also be able to participate as a capital contributor in investment projects under the form of public-private partnerships, which uses ODA funds and preferential loans as the State’s investment capital, as well as borrow ODA through commercial banks.

The draft decree provides a seven-step process for managing and using ODA and preferential loans. These include mobilisation to borrow capital; building and selecting projects; setting, assessing and deciding the investment policy of the project; negotiating and signing international treaties and agreements on capital; project management and completion of projects.

Vietnam has been given financial aid from from multilateral and bilateral institutions such as World Bank, Asian Development Bank and International Monetary Fund as well as from countries such as Japan, France, Denmark and Canada since 1993. In July 2017, World Bank announced the termination of ODA for Vietnam; instead, the latter loans were declared preferential loans with higher interest rates.

According to MPI’s statistics, by the end of 2017, there were 2,591 programmes and projects funded by ODA and preferential loans. Among them, ministries and sectors have 1,279 projects, localities have 1,197 projects and the remaining are projects of banks and Vietnam Television.

The Ministry of Transport has taken the lead, with 288 ODA programmes and projects. It is followed by the Ministry of Industry and Trade with 152 projects. The Ministry of Agriculture and Rural Development, Ministry of Health and MPI have 272, 132 and 51 projects and programmes, respectively.-VNA