Circular No. 26/2013/TT-BTC guiding disbursement and financial mechanisms for credit and grant funds from the Government of the Russian Federation for the Ninh Thuan 1 Nuclear Power Plant Project

CIRCULAR

Guidelines on disbursement and financial mechanism for the Russian Federation Government's credit and aid funds

for the Ninh Thuan 1 Nuclear Power Plant Construction Project Pursuant to the Law on Public Debt Management No. 29/2009/QH12 dated June 17, 2001;

Pursuant to Decree No. 78/2010/NĐ-CP dated July 14, 2010 on relending government foreign loans;

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Pursuant to the Agreement between the Government of Vietnam and the Government of the Russian Federation on providing state export credits to finance the construction of nuclear power plants in Vietnam signed on November 21, 2011 (Credit Agreement);

Pursuant to the Decree No. 79/2010/NĐ-CP dated July 14, 2010 on state debt management operations;

Pursuant to the Second Additional Agreement attached to the Agreement between the Government of Vietnam and the Government of the Russian Federation on the settlement of Vietnam’s debt to the Russian Federation for previously provided credits, signed on November 21, 2011 (Second Additional Agreement) and the exchange letter dated October 16, 2012 amending Article 1 of the Second Additional Agreement;

Implementing the Prime Minister's directive in Circular No. 301/VPCP-QHQT dated March 19, 2012 approving the financial mechanism and Circular No. 4726/VPCP-KTTH dated June 28, 2012 approving the relending fee for the Project;

The Minister of Finance issues this Circular guiding the disbursement and financial mechanism for the Russian Federation Government's credit and aid funds for the Ninh Thuan 1 Nuclear Power Plant Construction Project (Project).

Article 1. Scope of application:

This Circular takes effect from February 15, 2025.

This Circular stipulates the procedures for disbursement and the financial mechanism applicable to the Russian Federation Government's credit and aid funds for the Ninh Thuan 1 Nuclear Power Plant Construction Project.

Part I

GENERAL PROVISIONS

- Relending agency: Vietnam Development Bank (VDB).

- Serving bank: Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank).

Article 4. Scope of Application: This Circular applies to the following agencies and units:

- Borrower: Vietnam Electricity Corporation (EVN).

- The Ministry of Finance, the Ministry of Industry and Trade, and other agencies, organizations, and units related to the use of the Russian Federation Government's credit and aid funds to implement the Project.

Article 3. Principles of management and utilization of credit and aid:

1. The state credit from the Russian Federation Government to the Government of Vietnam under the Credit Agreement signed between the two Governments is a foreign loan of the Government of Vietnam. The Ministry of Finance represents the Government of Vietnam in taking on debt with the Russian Federation Government and is responsible for repaying the debt to the Russian Federation when due. The Ministry of Finance authorizes the Vietnam Development Bank (VDB) to relend the entire loan from the Russian Federation Government to the Vietnam Electricity Corporation (EVN) for investment in constructing the Ninh Thuan 1 Nuclear Power Plant.

2. The non-repayable aid from the Russian Federation Government for preparing the feasibility study report of the Project, drawn from the source of repayment of the Government of Vietnam to the Russian Federation according to the Second Additional Agreement of the Comprehensive Debt Settlement Agreement signed on September 13, 2000, is a revenue of the State Budget and is allocated to EVN in the form of budget revenue and expenditure recording.

3. The state credit and aid funds from the Russian Federation Government for the Government of Vietnam must be used for their intended purposes and efficiently, in accordance with the conditions stipulated in the Credit Agreement and the Second Additional Agreement and relevant current regulations of Vietnam.

2. The non-repayable grant from the Government of the Russian Federation funding the preparation of the Feasibility Study Report for the Project, drawn from the debt repayment source of the Government of Vietnam to the Russian Federation under Supplementary Agreement No. 2 of the Comprehensive Debt Settlement Agreement signed on September 13, 2000, is revenue of the State Budget and shall be allocated to EVN in the form of budget revenue and expenditure recording.

3. State loans and grants from the Government of the Russian Federation provided to the Government of Vietnam must be used for their intended purposes and efficiently, in accordance with the conditions stipulated in the Loan Agreement and Supplementary Agreement No. 2, as well as relevant current regulations of Vietnam.

Part II

SPECIFIC PROVISIONS

Article 4. The conditions for re-lending applicable to the credit facility of the Russian Federation under the Credit Agreement:

1. Loan amount: according to the loan limit specified in the Credit Agreement signed between the two Governments. The actual loan amount is the total amount disbursed and recognized as debt with the Russian Federation.

2. Disbursement period: from 2014 to the end of 2021.

3. Currency for re-lending and debt recovery: United States Dollar (USD). In case EVN repays the debt in Vietnamese Dong, the selling rate of USD announced by Vietcombank at the time of debt recovery will be applied.

4. Re-lending period: 29 years, including an 8-year grace period starting from the first disbursement date of the credit, but principal repayment must begin no later than March 15, 2022, with two installments per year on March 5 and September 5.

5. Re-lending interest rate: specifically stipulated in the Delegation Contract for Re-lending.

Late payment penalty: 150% of the re-lending interest rate, calculated from the due date to the date of full settlement of overdue debt.

6. In addition to the re-lending interest rate mentioned in Point 5 above, EVN must pay the following fees:

- Foreign exchange transaction fee paid to Vietcombank: as announced by Vietcombank;

- Re-lending fee at a rate of 0.125% per annum on the outstanding principal, of which VDB receives 0.1% per annum and the Ministry of Finance receives 0.025% per annum.

7. The date EVN recognizes debt with the State Budget is the date when the Russian Federation records the debt for Vietnam according to the Agreement on Payment Procedures and Accounting of the Credit signed between Vietcombank and the Russian Development and Foreign Economic Bank (Vnesheconombank) on May 23, 2012 (Bank Agreement).

Article 5. Disbursement:

1. Borrowed capital

a) Disbursement process and procedures:

The disbursement of the credit borrowed from the Russian Federation shall be carried out through collection payment based on pre-approved documents as stipulated in Article 2 of the Credit Agreement, the Bank Agreement, and the guidance provided in Circular No. 108/2007/TT-BTC dated September 7, 2007, issued by the Ministry of Finance guiding the financial management mechanism for ODA programs and projects and subsequent amendments, supplements, or replacements (hereinafter referred to as Circular No. 108/2007/TT-BTC). The disbursement process shall be carried out as follows:

- After completing domestic approval procedures, EVN sends a notification to the Ministry of Finance along with four original copies of the Trade Contracts signed between EVN and Russian organizations for the Ministry of Finance to request the Russian Ministry of Finance's approval for contract financing (as stipulated in Article 8 of the Credit Agreement). These contracts only become effective for disbursement after receiving formal approval for financing from the Russian Ministry of Finance sent to the Ministry of Finance.

- The value of each disbursement is based on the Trade Contracts signed between EVN and Russian organizations, collection documents, and invoices issued by Russian organizations, approved for payment by EVN through Vietcombank.

- When Vietcombank receives the original collection documents (collection documents) from Russian organizations, Vietcombank is responsible for reviewing the documents and transferring them to EVN for examination and consideration to provide an approval or rejection of payment.

- Within seven working days from the receipt of the payment documents transferred by Vietcombank, EVN provides a written opinion to Vietcombank regarding the approval or rejection of payment for part or all of the documents, along with the reasons for non-payment and the amount rejected.

- Based on EVN's approval opinion, within two days from the receipt of EVN's approval notification, Vietcombank informs Vnesheconombank of the approval or partial approval or rejection of payment and the reasons for rejection to proceed with direct payment or inform the Russian organizations of the reasons for rejection.

- The day Vietcombank notifies Vnesheconombank of the approval of the collection documents will be considered the usage and recognition date of the credit.

- After each debt recognition with Vnesheconombank, Vietcombank officially notifies the Ministry of Finance (Department of Debt Management and Foreign Financial Affairs) along with a copy of the debt record for State Budget revenue recording and EVN re-lending expenditure.

b) Payment documentation files: as stipulated in the Trade Contracts signed between EVN and Russian organizations and Circular No. 108/2007/TT-BTC of the Ministry of Finance and subsequent amendments, supplements, or replacements (if any).

c) Post-payment control confirmation:

The post-payment control method is applied to the project's payments, specifically: After each payment to Russian organizations, EVN submits the payment file as stipulated in Point b Clause 1 of this Article to VDB for review and post-payment control confirmation. If the confirmed payable amount by VDB is lower than the actual payment amount in the previous period, EVN is responsible for adjusting the difference into the next payment period's amount. A payment request with VDB's post-payment control confirmation (original) is one of the bases for the next payment.

For the final payment, VDB conducts pre-payment control before paying to Russian organizations to ensure that the entire payment volume of the Contract has been fully and accurately controlled.

2. Grant capital:

a) Disbursement process and procedures:

The disbursement of grant capital for the preparation of the Feasibility Study Report of the Project is carried out according to Supplementary Agreement No. 2 and the Bank Agreement guiding technical payment procedures for the grant signed on January 20, 2012, between Vietcombank and Vnesheconombank. The specific disbursement process is carried out as follows:

- After receiving the payment request along with the original invoices and payment documents issued by Russian organizations and sent by Vnesheconombank to Vietcombank, Vietcombank forwards a letter along with the entire set of original documents to EVN;

- Within five working days from the date of receipt of the above set of documents, EVN shall be responsible for examining and expressing approval of the entire set, or approving part of it, or rejecting payment of the set of documents. In case of approval of the set of documents, EVN shall send a letter requesting withdrawal of funds to the Ministry of Finance along with the documents specified in point b, Clause 2, Article 5, accompanied by the relevant documents. In case EVN rejects the set of documents, within three working days from the date of receipt of the set of documents transferred by Vietcombank, EVN must notify Vietcombank in writing, also sending a copy to the Ministry of Finance, clearly stating the reasons and the amount not accepted for payment so that Vietcombank can inform Vnesheconombank.

- Based on the letter requesting withdrawal of funds from EVN, within five working days, the Ministry of Finance shall issue an Order to pay money requiring Vietcombank to transfer funds from the Russian Debt Repayment Account to pay the Russian organizations according to the information provided in the letter from EVN and record the debt on the Russian Debt Repayment Account at Vietcombank.

- After transferring funds to Vnesheconombank for payment to Russian organizations, Vietcombank shall send a copy of the Money Transfer Order to the Ministry of Finance and EVN to proceed with the procedures for recording state budget revenue and expenditure for EVN.

b) Documents for each disbursement request: In addition to the initial documents and certificates required under Circular No. 108/2007/TT-BTC, EVN shall be responsible for sending the following documents to the Ministry of Finance (Debt Management and Foreign Financial Affairs Department) as the basis for disbursement including:

- The request for withdrawal of aid funds from EVN;

- Payment requests (or certified copies of invoices) from Russian organizations;

- The completion acceptance report from EVN (certified copy);

For the first withdrawal to pay the advance payment (deposit): Within seven working days, EVN shall submit the disbursement request documents, supplemented with certified copies (confirmed and certified true copies by EVN) of the Contract Performance Guarantee and Advance Payment Guarantee as stipulated in the Contract to the Ministry of Finance (Debt Management and Foreign Financial Affairs Department) to process the request for Vietcombank to pay the Russian organizations.

Article 6.Reporting, accounting, and auditing regulations: Shall be implemented in accordance with Part III of Circular No. 108/2007/TT-BTC.

Article 7. Responsibilities of related agencies:

1. Project Owner (Electricity of Vietnam - EVN):

In addition to fulfilling the responsibilities of the Project Owner as prescribed in Article 24, the regular reporting system as prescribed in Clause 1, Article 36 of the Regulation on Management and Use of Official Development Assistance issued together with Decree No. 131/2006/NĐ-CP dated November 9, 2006 of the Government, EVN also has the following specific tasks:

a) Annually, based on the project implementation progress and the sponsor's commitments, EVN shall be responsible for preparing and submitting to the competent authority for approval the financial plan for the project (including Russian loans, aid funds, and counterpart funds) in accordance with Circular No. 108/2007/TT-BTC dated September 7, 2007 of the Ministry of Finance.

b) Ensuring timely and adequate provision of counterpart funds for the project in accordance with the provisions of Circular No. 108/2007/TT-BTC.

c) Closely coordinating with Vietcombank to ensure compliance with the deadlines for responding to payment request documents from Russian organizations as prescribed in Article 5 of this Circular; checking, and being responsible for the accuracy and authenticity of the payment documents.

d) Preparing annual settlement reports and final investment settlement reports for completed projects in accordance with the guidance documents of the Ministry of Finance.

e) Using funds for their intended purposes, in accordance with the conditions stipulated in the Credit Agreement and Supplement No. 2.

g) Being responsible for receiving debts, repaying principal and interest to VDB in accordance with the Rescheduling Loan Agreement signed with VDB.

2. Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank):

Joint Stock Commercial Bank for Foreign Trade of Vietnam is the Bank serving the Project authorized by the Ministry of Finance to handle loan withdrawals, aid, and repayment to foreign countries. In addition to fulfilling the responsibilities of the Serving Bank as prescribed in Circular No. 108/2007/TT-BTC, Vietcombank also has the following specific tasks:

a) Closely coordinating with Vnesheconombank to promptly confirm the receipt of payment documents, and notifying approval or rejection of payment within the time limit stipulated in the Banking Agreement and in accordance with the guidance of this Circular.

b) Checking payment documents, disbursing loan funds according to EVN's requirements, and disbursing aid funds from the debt processing fund according to the Ministry of Finance's Order to Pay Money, and repaying loan principal to the Russian side in accordance with the provisions of the Banking Agreement and the guidance of this Circular.

c) Recording the debt on the "Russian Debt Repayment" account at Vietcombank and sending a payment message to Vnesheconombank.

d) During the period of drawing down to prepare the Feasibility Study Report (18 months), sending quarterly statements to Vnesheconombank and reconciling the paid amounts and balances on the "Russian Debt Repayment" account with Vnesheconombank.

e) Based on the repayment notice received from Vnesheconombank, no later than 15 days before each repayment due date (March 15 and September 15), Vietcombank shall be responsible for notifying the Ministry of Finance of the amount of principal and interest to be repaid each period so that the Ministry of Finance can proceed with repayment to the Russian side through Vietcombank.

g) Regularly every six months, Vietcombank shall be responsible for reporting to the Ministry of Finance (Debt Management and Foreign Financial Affairs Department) on the disbursement of loan and aid funds, repayment, and credit balance with the Russian Federation.

3. Vietnam Development Bank:

Vietnam Development Bank (VDB) is the Rescheduling Agency authorized by the Ministry of Finance to provide rescheduling loans to EVN and is responsible for recovering rescheduling loans from EVN into the Debt Repayment Reserve Fund managed by the Ministry of Finance to have funds to repay the Russian Government. In addition to the responsibilities of the Rescheduling Agency as prescribed in Article 26 of the Public Debt Management Law and Decree No. 78/2010/NĐ-CP dated July 14, 2010 on Rescheduling Loans from Foreign Government Loans, VDB also has the responsibility to check and confirm the control of payments from Russian Federation loan funds for the project in a timely manner, in accordance with the provisions of the Credit Agreement, current regulations of the Ministry of Finance, and the guidance of this Circular.

Part III

IMPLEMENTING PROVISIONS

Article 8. Effective Date

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

2. During the implementation process, if there are any difficulties, the relevant agencies and units are requested to promptly reflect them to the Ministry of Finance for consideration and resolution./.