Circular No. 156/2009/TT-BTC guides the mechanism for borrowing state development credit to implement programs for reinforcing irrigation canals, rural road projects, aquaculture infrastructure, and rural craft village infrastructure.

CIRCULAR

Guidelines for the mechanism of borrowing development investment credit from the State to implement the program of reinforcing irrigation canals, investing rural road projects, infrastructure for aquaculture, and rural craft village infrastructure implement the program to reinforce irrigation canals and ditches, invest in rural road projects, infrastructure for aquaculture, infrastructure for rural craft villages

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Pursuant to the Decree No. 118/2008/NĐ-CP dated November 27, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decision No. 66/2000/QĐ-TTg dated June 13, 2000 of the Prime Minister on certain policies and financial mechanisms to implement the program of reinforcing irrigation canals;

Pursuant to Decision No. 132/2001/QĐ-TTg dated September 7, 2001 of the Prime Minister on financial mechanisms to implement the program of developing rural roads, infrastructure for aquaculture, and rural craft village infrastructure;

Pursuant to Decision No. 13/2009/QĐ-TTg dated January 21, 2009 and Decision No. 56/2009/QĐ-TTg dated April 15, 2009 of the Prime Minister amending and supplementing Decision No. 13/2009/QĐ-TTg dated January 21, 2009 of the Prime Minister on the use of State development investment credit to continue implementing the programs of reinforcing irrigation canals, developing rural roads, infrastructure for aquaculture, and rural craft village infrastructure during the period of 2009-2015;

PART I

GENERAL PROVISIONS

Article 1. Borrowers.

The borrowers of State development investment credit under this Circular are provinces and centrally-administered cities with the need to invest in projects specified in Article 2 of this Circular.

Article 2. Projects eligible for borrowing.

1. Projects to invest in reinforcing irrigation canals of type II and type III managed by localities and projects to construct embankments and floodgates (for provinces and centrally-administered cities in the Mekong Delta region).

2. Projects to develop rural roads.

3. Projects to develop infrastructure for aquaculture.

4. Projects to develop infrastructure for rural craft villages.

5. Pump stations for agricultural irrigation when necessary, including the following components: construction of pump houses, drainage tanks, suction tanks, purchase of pumps, and installation of low-voltage power lines from the substation to the pump station. The components of the project eligible for borrowing are decided by the People's Committee of the province or centrally-administered city. Hereinafter referred to as projects under the Program.

Article 3. Interest rate on loans and methods of using borrowed funds.

1. The interest rate on loans for projects under the Program is 0%.

2. Methods of using borrowed funds: State development investment credit for implementing projects under the Program shall be consolidated into local government revenue and targeted supplements to district-level budgets for investment (for projects directly managed by districts); or to be supplemented to commune-level budgets by districts (for projects directly managed by communes). Districts and communes are responsible for effectively utilizing State support and mobilizing people's contributions according to point b, Clause 3, Article 4 of this Circular.

Article 4. Conditions for borrowing State development investment credit.

1. In line with the development requirements of the locality.

2. Decided by competent authorities and having complete procedures for basic construction investment in accordance with current laws.

3. Clearly identifying sources of funding to implement projects under the Program, including:

a) Support from centralized construction investment funds and annual land use fees of the locality.

b) Mobilization of people's contributions and other lawful sources of funding. For the mobilization of people's contributions, based on the actual situation of the locality, the People's Committee of the province or centrally-administered city reports to the same-level People's Council to decide on the level and method of mobilizing people's contributions suitable for each area, mainly through labor days and voluntary contributions in compliance with Directive No. 24/2007/CT-TTg dated November 1, 2007 of the Prime Minister on strengthening the implementation of legal provisions on fees and charges, policies for mobilizing and using people's contributions.

c) State development investment credit.

Article 5. Sources of Repayment Funds.

The repayment funds for state development credit loans to implement projects under the Program shall be from local budgets. Localities shall allocate within their annual budget balance to repay according to commitments (local budget funds include investment funds from land use fees).

Article 6. Loan Implementing Agency.

The loan shall be implemented through the Vietnam Development Bank.

Chapter II

SPECIFIC PROVISIONS

Article 7. Loan Application Documents.

To have grounds for considering and deciding on the amount of state development credit loans for the Program, the People's Committees of provinces and centrally governed cities shall submit to the Ministry of Finance the following documents:

1. List of investment projects that have been approved by competent authorities.

2. Request letter from the People's Committee of the province or centrally governed city proposing to borrow state development credit loans for the next year to invest in projects (in detail for each project), including clearly and fully the following contents:

- Total investment capital requirement.

- Local capital mobilized from the people.

- Level of support capital from the local budget.

- Level of central government budget support (if any).

- Shortfall capital, including the proposed borrowing of state development credit loans, with specific allocation of borrowing periods for each year.

- Repayment plan for each year.

The above documents must be sent to the Ministry of Finance no later than September 30 each year, so that the Ministry of Finance can decide specifically on the loan amount for the next year for each locality.

Article 8. Loan Amount.

Based on the total amount of state development credit granted annually by the Prime Minister; taking into account the need for state development credit loans of the People's Committees of provinces and centrally governed cities and the ability of local budgets to repay debts, the Ministry of Finance decides the amount of state development credit loans annually for each province and centrally governed city.

Article 9. Basis and Method of Transferring Loan Capital.

1. Basis for transferring loan capital: The Vietnam Development Bank shall transfer capital to provinces and centrally governed cities based on:

a) Decision on lending capital by the Minister of Finance.

b) Loan agreement between the Department of Finance (authorized by the Chairman of the People's Committee of the province or centrally governed city) and the Branch of the Vietnam Development Bank in the province or centrally governed city (according to Model 1 attached).

2. Method of Transferring Loan Capital:

a) Based on the provisions of Article 8 of this Circular, the Branches of the Vietnam Development Bank in provinces and centrally governed cities shall transfer capital to the provincial or centrally governed city budget according to the loan amount decided by the Minister of Finance, without implementing loans to individual districts or specific projects.

The allocation of specific amounts to individual districts and projects shall be decided and responsible for by the People's Committee of the province or centrally governed city according to the decentralized management mechanism of investment capital and current investment capital management regulations.

b) Based on the total amount of state development credit announced by the Ministry of Finance and the progress of implementing projects under the Program by localities; the Departments of Finance in provinces and centrally governed cities shall cooperate with the Branches of the Vietnam Development Bank to withdraw state development credit loans to implement projects under the Program.

Article 10. Repayment Period for Borrowed Capital.

Clause 1. Repayment period for borrowed capital: Starting from 12 months (from the date of disbursing the first loan amount), repayment begins. The repayment period is 4 years; specifically, for mountainous provinces and provinces with local state budget revenue (domestic revenue) only ensuring under 30% of the local budget expenditure tasks, the repayment period is 5 years.

Clause 2. In cases where a locality has overdue debt at the time of disbursing a new loan, the Vietnam Development Bank Branch temporarily does not transfer additional loan funds until the province or centrally-administered city completes repayment according to the signed contract. Only then will the Vietnam Development Bank Branch continue to transfer loan funds to the province or centrally-administered city; in special cases, there must be the opinion of the Ministry of Finance based on the proposal of the People's Committee of the province or centrally-administered city and the report of the Vietnam Development Bank.

Article 11. Management of State Credit Investment Capital for Projects under the Program.

Clause 1. When receiving loan funds transferred by the Vietnam Development Bank Branch to the provincial budget, the Department of Finance records it as local government revenue (Chapter 560, Type 340, Item 345, Sub-item 0800). When repaying the loan, record it as local government expenditure (Chapter 160, Type 340, Item 345, Sub-item 0800).

Clause 2. Based on the total credit investment capital of the State borrowed to invest in projects under the Program, the People's Committee of the province or centrally-administered city decides specifically on the allocation of capital for each project in accordance with the actual requirements and conditions of the locality and reports to the Ministry of Finance within 30 days from the receipt of the loan capital decision for monitoring purposes.

Clause 3. The State credit investment capital can only be used for projects specified in Article 2 of this Circular and shall not be used for other purposes.

Article 12. Payment and Settlement of Capital for Projects under the Program.

Clause 1. Payment of investment capital from the State credit investment capital source to the project investors is carried out in accordance with the current regulations of the State on investment capital management.

Clause 2. Investment expenses to implement projects under the Program are settled as local government expenditure (according to the分级管理的基本建设投资的分级管理规定).

Chapter III

IMPLEMENTATION:

Article 13. Responsibilities of the People's Committees of Provinces and Centrally-Administered Cities.

Clause 1. Approval of Projects: The People's Committees of the provinces and centrally-administered cities approve projects and direct the People's Committees at the district and commune levels to approve projects under the Program within their jurisdiction; balance various sources of investment capital for implementation.

Clause 2. Prepare loan application documents for State investment credit and submit them to the Ministry of Finance in accordance with Article 7 of this Circular.

Clause 3. Direct and inspect all sectors and levels in managing and using the investment credit funds in accordance with the objectives and regulations on basic construction investment management and fulfill the loan repayment commitment to the Vietnam Development Bank.

Clause 4. Regularly (before the 15th day of the first month of each quarter) direct the Department of Finance to report the progress of implementing projects under the Program to the Ministry of Finance and the Vietnam Development Bank Branch (using Form No. 2 attached).

Clause 5. Annually (before January 15 of the following year) report the implementation status of projects under the Program to the Prime Minister, copied to the Ministry of Planning and Investment, the Ministry of Finance, and the Vietnam Development Bank; in the report, provide specific evaluations of the results achieved by each project under the Program, difficulties encountered during implementation, and recommendations (if any).

Article 14. Responsibilities of the Ministry of Finance.

1. Annually, based on the total investment capital and credit investment development capital of the State, taking into account the local budget's debt repayment capacity, and the proposal from the province or centrally governed city; decide the specific annual borrowing amount for each province or centrally governed city in accordance with the provisions set out in Clause 8 of this Circular.

2. Allocate resources to cover the interest rate differential and management fees for the Vietnam Development Bank according to the prescribed regulations.

3. Inspect the implementation results of the Program for canal consolidation, rural road development, aquaculture infrastructure, rural craft village infrastructure, and electric pumping stations serving agricultural irrigation funded by State investment credit at local levels to serve as the basis for allocating annual capital plans for provinces and centrally governed cities.

Article 15. Responsibilities of the Ministry of Planning and Investment.

Take the lead and coordinate with the Ministry of Finance and relevant agencies to balance and submit to the Prime Minister for decision the level of support for investment capital from the central budget for local budgets and the total annual State investment credit capital to implement projects under the Program.

Article 16. Responsibilities of the Vietnam Development Bank.

1. Transfer loans to provinces and centrally governed cities after signing loan agreements (loan contracts) between the Vietnam Development Bank branch and the provincial finance departments and the progress of implementing projects under the Program in accordance with the decision of the Minister of Finance, without organizing reviews and lending to individual projects.

2. Recover loans when due.

3. Calculate the interest subsidy for the Vietnam Development Bank according to Decision No. 44/2007/QD-TTg dated March 30, 2007 of the Prime Minister on the issuance of financial management regulations for the Vietnam Development Bank and current regulations, report to the Ministry of Finance.

4. Calculate management fees for the Vietnam Development Bank according to the Prime Minister's decision and the guidance of the Ministry of Finance, report to the Ministry of Finance.

5. Annually, be responsible for reporting and evaluating the implementation results of projects under the Program and the loan recovery situation to the Prime Minister, simultaneously sending reports to the Ministry of Planning and Investment and the Ministry of Finance.

Article 17. Implementation Provisions.

1. This Circular shall take effect 45 days from the date of signature.

2. This Circular replaces Circular No. 72/2000/TT-BTC dated April 19, 2000 of the Ministry of Finance guiding the financial mechanism for implementing the canal consolidation program, and Circular No. 79/2001/TT-BTC dated September 28, 2001 of the Ministry of Finance guiding the financial mechanism for implementing rural road projects, aquaculture infrastructure, and rural craft village infrastructure projects.

3. During the implementation process, if there are difficulties or obstacles, please reflect them to the Ministry of Finance for resolution.

Model No. 1

SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness

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..., day..., month..., year...

LOAN AGREEMENT NUMBER ...

Lender Name: Vietnam Development Bank Branch in Province (City) ...

Address: …

.............................................................................................................................

Phone: …

Borrower Name: People's Committee of Province (City) ...

Address:…

.............................................................................................................................

Telephone: ...

Article of Commitment:

1- The Branch of the Vietnam Development Bank in the province (city) ... shall transfer to the provincial (city) budget ... the amount of ... VND according to Decision No. .../.../QĐ-BTC dated ..., month ..., year ... of the Minister of Finance.

2- Interest rate on the loan: 0%.

3- Principal repayment term: 1 year (12 months) from the date of disbursement of the first capital. The province commits to annually repay the loan to the Branch of the Vietnam Development Bank in accordance with the prescribed time and repayment amount. If payment is not made within the deadline, it will be handled as stipulated in Clause 2, Article 10 of Circular No. .../2009/TT-BTC dated ..., month ..., year 2009 of the Ministry of Finance.

This document is made in four original copies having equal legal force, each party retains two copies.