Decision No. 13/1999/QD-TTg on investment credit work in 1999

Pursuant to …;

On investment credit work in 1999

PRIME MINISTER

Pursuant to the Law on Government Organization dated September 30, 1992

To implement the State's investment credit work in 1999

At the proposal of the Minister of Planning and Investment, the Minister of Finance, and the Governor of the State Bank

Pursuant to …;

Article 1. The State’s investment credit capital for 1999 shall mainly be concentrated on providing loans according to the construction progress of projects that have already borrowed investment credit capital from the State and are still under construction, projects with investment decisions or capital allocation decisions made by the Prime Minister, ODA projects borrowing part of domestic counterpart funds, and projects with conditions to accelerate progress to enter production and business operations in 1999.

Article 2. The lending organizations and sources of loan capital for ongoing projects are regulated as follows:

1. Projects currently being lent by which lending organization (Vietnam Investment and Development Bank, General Department of Investment Development, and commercial banks lending pursuant to Decision No. 107/1998/QĐ-TTg dated June 11, 1998 of the Prime Minister) shall continue to provide loans according to the construction progress and capital structure determined in the investment decision in 1999. The project investor registers the loan amount with the supervising agency and the lending organization; the supervising agency reports to the Ministry of Planning and Investment. The investor is responsible for the investment effectiveness and timely repayment of the loan; the lending organization is responsible for timely provision of capital according to the construction progress, monitoring the use of loan capital for its intended purpose, and full and timely recovery of the capital.

For projects that are currently being lent but are truly ineffective and unable to repay the debt, within 45 days from receiving the complete documentation from the investor, the lending organization must notify in writing the reasons to the investor, supervising agency, and the Ministry of Planning and Investment. The Ministry of Planning and Investment is responsible for compiling and reporting recommendations for measures to handle the outstanding debt to the Prime Minister for decision.

2. The source of loan capital for ongoing projects will be balanced from the recovered debt and domestic and foreign fundraising of each lending organization; initially, it will be implemented according to the Appendix attached to this Decision. The Ministry of Planning and Investment is responsible for compiling the capital requirements, allocating the capital sources, and announcing the total capital allocated to each Ministry, Sector, and locality and to each lending organization.

3. The loan term, interest rate, collateral for the loan, and responsibilities of the investment decision-making agency, lending organization, and investor shall be carried out in accordance with Decision No. 52/1998/QĐ-TTg dated March 3, 1998 of the Prime Minister.

Article 3. For new projects, in 1999, priority will be given to the following sectors: production (including rubber planting and care, coffee, tea, fruit trees, forest plantation), processing and preservation of agriculture, forestry, and fisheries; export product manufacturing; manufacturing products to replace imports; shipbuilding projects, production of power machinery, agricultural machinery; support for electricity production, metallurgy, fertilizer, cement production; medical equipment and school facilities; production and business projects in difficult areas under the Law on Encouraging Domestic Investment, and some infrastructure construction projects related to transportation, industrial zones, and urban areas.

Investment projects borrowing capital must be effective, capable of repaying the debt, and comply with investment and construction procedures. For projects decided upon after March 31, 1999, the competent authority will only issue the investment decision after obtaining the opinion of the lending organization regarding the investment effectiveness, debt repayment capability, and availability of loan capital. Group A projects will be appraised by the Ministry of Planning and Investment, with the lending organization participating from the appraisal stage and implementing according to the Prime Minister's decision. Once the investment decision is issued, the lending organization will sign a credit agreement and must provide loans and disburse funds according to the project's investment schedule.

Article 4. The sources of capital, mechanisms, and management policies for lending the projects mentioned in Article 3 of this Decision shall be handled as follows:

1. The loan capital and lending organizations for Group A projects will be specifically determined for each project when issuing the investment decision. The Ministry of Planning and Investment will estimate the total capital, the loan amount for 1999, and the list of projects to report to the Prime Minister. The specific loaning of capital for each project will be carried out according to the project's investment decision.

Initially, the Ministry of Planning and Investment will compile the loan capital amount for projects with investment decisions before April 1, 1999, to submit to the Prime Minister for determination of the 1999 capital amount and lending organization.

2. The loan capital for Group B and C projects includes savings mobilized by the Post Office Savings Fund and other sources of the National Investment Support Fund. Initially, the Vietnam Postal and Telecommunications Corporation will mobilize savings in 1999 according to the Appendix of this Decision to transfer to the National Investment Support Fund as the loan capital source; the Ministry of Planning and Investment will allocate the total loan capital for new projects in Groups B and C to each Ministry, Sector, and locality. Based on the announced total capital, Ministries, Sectors, and localities will allocate capital for each specific project, ensuring sufficient capital according to the project's investment schedule and registering with the lending organization, reporting to the Ministry of Planning and Investment; the lending organization will base the investment decision and the project's loan capital to sign a loan agreement with the investor and disburse funds according to the project's investment schedule.

3. New projects in Groups B and C of the 1999 plan with investment decisions after March 31, 1999, will be handled by the National Investment Support Fund as the main lender. The Management Board of the National Investment Support Fund must establish regulations on financial plan assessment and project effectiveness before the competent authority issues the investment decision.

4. The loan interest rate for new projects is 0.81% per month.

5. The loan term, including grace periods (construction period), depends on the production cycle and capital recovery period of the project, but not exceeding 10 years; cases exceeding this period will be decided by the Management Board of the National Investment Support Fund.

6. During the period when the debt has not been fully repaid, the project investor shall not transfer, sell, or mortgage the assets financed by the loan to obtain new loans. State-owned enterprises are exempted from mortgaging assets when borrowing funds.

Article 5. Projects not falling within the investment objects specified in Article 2 and Article 3 of this Decision shall be considered for lending by banks in accordance with banking credit regulations. The State implements preferential policies according to the Law on Encouragement of Domestic Investment and the Government's provisions, without distinction among economic sectors.

Article 6. The allocation, disbursement, and lending of capital for national target programs such as the program for five million hectares of forest, poverty alleviation program, clean water and environmental sanitation program, and other programs such as mechanical development, distant sea fishing, disaster mitigation program... shall be carried out in accordance with the Prime Minister's Decision or the competent authority as prescribed for each program.

Article 7. THIS DECISION SHALL TAKE EFFECT 15 DAYS FROM THE DATE OF SIGNATURE.

Establish an inter-ministerial expert team under the direction of Deputy Prime Minister Nguyen Tan Dung to develop a proposal for fundamentally reforming the State's investment credit mechanism to be submitted to the Government for approval in June 1999 to be implemented from 2000.

Article 8. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial and centrally governed city People's Committees are responsible for enforcing this Decision./.

ANNEX

SOURCES OF INVESTMENT CREDIT FOR THE YEAR 1999
(Issued together with Decision No. 13/1999/QĐ-TTg dated February 4, 1999 of the Prime Minister)

I. SOURCES OF LOANS FOR ONGOING INVESTMENT PROJECTS IN 1999

1. General Department of Investment and Development

- Recovered debts for lending: 200 billion VND

- Borrowing from the Social Insurance Fund: 1,000 billion VND

- Capital mobilization: 500 billion VND

2. Vietnam Investment and Development Bank

- Recovered debts for lending: 400 billion VND

- Borrowing from the Social Insurance Fund: 1,000 billion VND

- Capital mobilization: 1,000 billion VND

- Foreign borrowing: 30 million USD equivalent to 400 billion VND

3. Ministry of Planning and Investment shall aggregate the registered capital requirements of ministries, sectors, and localities; allocate the total loan amount to each ministry, sector, and locality, and designate the lending entity.

II. SOURCES OF LOANS FOR NEW INVESTMENT PROJECTS IN 1999

1. Assign the Vietnam Post and Telecommunications Corporation to mobilize postal savings in 1999: 1,500 billion VND.

III. PROPOSED ALLOCATION OF LOAN FUNDS FOR NEW PROJECTS IN 1999

1. Loans for new projects in Category A shall be proposed by the Ministry of Planning and Investment for the total amount and specific allocation to each project upon submission for investment decision approval.

2. Loans for projects in Categories B and C shall be based on postal savings mobilization sources, with the Ministry of Planning and Investment allocating the total amount to each ministry, sector, and locality./.