The government has recently issued Decree No.56/2020/ND-CP on management and use of official development assistance (ODA) and concessional loans granted by foreign sponsors to Viet Nam.

Nhat Tan Bridge, one of major infrastructure projects using the official development assistance (ODA) loans. (Source: VNA)

Accordingly, foreign sponsors can be foreign governments, international organisations, inter-government or international organisations, and governmental organisations authorised by foreign governments.

Methods for the provision of ODA and soft loans include programme, project, non-project and budget assistance.

Regarding the usage of non-refundable ODA, priority will be given to socio-economic infrastructure programmes and projects; capacity building; supporting formulation of policies, institutions and reforms; prevention and mitigation of natural disasters and response to climate change; social security; among others.

ODA loans will be used for execution of programmes and projects in healthcare, education and vocational training, climate change adaption, environment protection, and essential infrastructure that are not able to produce paybacks.

The ODA and concessional loans shall not be used for regular spending, payment of fees, taxes and interests, or purchase of cars (except for those approved by competent authorities) and site clearance, among others.

The decree also outlines rules to prevent and deal with corruption, losses and wastefulness in management and use of ODA and soft loans in accordance with law.

It took effect from May 25.

Source: VNA