Circular No. 03/1998/TT-BKH guiding the implementation of Decision No. 52/1998/QĐ-TTg of the Prime Minister on the implementation of the investment credit plan for 1998.

CIRCULAR
Guidelines for implementing Decision No. 52/1998/QĐ-TTg of the Prime Minister on the implementation of the 1998 credit investment plan
Pursuant to Decision No. 52/1998/QĐ-TTg of the Prime Minister dated March 3, 1998, regarding the implementation of the 1998 credit investment plan, the Ministry of Planning and Investment provides guidance as follows: 

1. The borrowing entities of the 1998 credit investment plan.

1.1. Projects carried over include:

- Projects that have been signed credit contracts or received loans from lending agencies since 1997 or earlier, within the 1998 plan, beyond the amount already contracted under credit agreements, and excluding self-raised funds by enterprises, will be allocated capital plans to ensure construction progress according to approved projects. In cases where there are many carried-over projects and limited funding sources, priority will be given to projects with higher efficiency.

- Projects recorded in the 1997 plan, which have been reviewed by lending agencies, and if they have signed credit contracts (which may not yet have been disbursed), they will be considered carried-over projects for the 1998 plan. If no credit contract has been signed or if signing such a contract is refused, they will not be considered carried-over projects for the 1998 plan. Projects that have had their credit contracts refused will not be considered for the 1998 plan.

1.2. New projects beginning to be recorded in the 1998 plan. State resources available for lending are limited, and these funds are mainly short-term borrowings at higher interest rates to lend for medium and long-term periods at lower interest rates, therefore:

- Priority will be given to new investment projects in the following sectors: electricity, machinery; export production; distant-sea fishing; processing of agricultural, forestry, and marine products; perennial industrial crops; raw material forests and transportation infrastructure; new industrial zones, urban areas with fee collection capabilities and repayment capacity.

Projects in other sectors (not mentioned in Point 1.2) that are not prioritized for borrowing but are assessed to be effective may be partially supported depending on the availability of funds.

- Based on effective projects with debt repayment capability, priority will be given to projects in provinces facing significant difficulties, particularly mountainous, remote, and far-flung regions.

- For large-scale projects (Groups A and B) of the 91 General Corporations, when deciding on Group A and B projects, the first step must be to self-fund through own sources such as basic depreciation funds, post-tax profits, project bonds, foreign loans (excluding ODA loans). State credit investment funds will only provide partial support when the investor has not raised sufficient funds.

1.3. State credit investment funds according to the plan shall not be used to contribute statutory capital in joint venture projects with foreign countries, except in the following cases requiring approval from the Prime Minister:

- Joint venture projects that have been granted licenses but due to force majeure, the Vietnamese enterprise cannot contribute the required statutory capital as stipulated in the investment license.

- There is a request to increase the statutory capital contribution ratio of Vietnam in joint venture projects.

1.4. State credit investment funds according to the plan shall not be used to refinance medium and long-term loans that state-owned enterprises have contracted with financial institutions. In cases where other enterprise funds are used and advance payments are made by the counterparty, refinancing may be considered.

2. Interest rate on loans.

- The interest rate for loans in Vietnamese dong is 0.81% per month.

- Loans for importing materials and equipment to serve investment projects will be provided in foreign currency at a fixed interest rate of 8.5% per year. In the 1998 plan, it must clearly state the amount of foreign currency loan.

3. Repayment period.

- According to Article 3 of Decision No. 52/1998/QĐ-TTg, in special cases where the repayment plan cannot be implemented within ten years, relevant ministries, provincial People's Committees, and the 91 General Corporations must report early to the Ministry of Planning and Investment for review and submission to the Prime Minister for decision. Projects that have been permitted by the Prime Minister to repay over ten years will continue to be implemented.

4. Collateral for loans.

All investment projects of both state-owned and non-state-owned enterprises included in the state credit investment plan are allowed to use assets formed with borrowed funds as collateral for loans. During the period before full repayment, enterprises are not allowed to transfer, buy-sell, or mortgage assets financed by state credit investment funds.

5. Investment procedures.

All investment projects recorded in the 1998 credit investment plan must complete investment procedures as prescribed in Decrees No. 42/CP and 92/CP of the Government for state-owned enterprises and applicable regulations for non-state-owned enterprises prior to March 1, 1998.

6. Allocation and management of the plan.

The Ministry of Planning and Investment allocates loan plans for each Group A project, the list of Group B projects (without specifying capital), and the total capital for Group B and C projects.

Ministries, provincial People's Committees, centrally-administered city People's Committees, and the 91 General Corporations allocate capital for each Group B and C project; register with the Ministry of Planning and Investment for monitoring and tracking, while also registering with the Vietnam Development Bank and the General Department of Investment and Development for loan consideration.

Adjustments to the loan plan will only be implemented once in the third quarter of 1998. At the request of ministries, provincial People's Committees, and centrally-administered city People's Committees, the Ministry of Planning and Investment will consider and adjust the capital for Group A projects and the list of Group B projects. Ministries and provincial People's Committees will adjust the capital for Group B projects and the list and capital for Group C projects.

This Circular takes effect fifteen days after its date of issuance.

Any new issues arising during implementation should be reported by ministries, provincial People's Committees, centrally-administered city People's Committees, and the 91 General Corporations to the Ministry of Planning and Investment for study and resolution.

During the implementation process, any new issues arising are requested to be reported by the Ministries, Provincial People's Committees, City People's Committees, and Total Joint Stock Company 91 to the Ministry of Planning and Investment for study and resolution.