Decision No. 317/TTg on the Interim Regulation for Creating Borrowing Sources for Investment in Basic Construction of Electrical Projects

Pursuant to …;

OF THE PRIME MINISTER

Regarding the temporary regulations on

creating sources of loans for investment in basic construction of power projects.

PRIME MINISTER

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

Considering the proposal of the Minister of Energy, the Minister and Chairman of the State Planning Committee, and the Ministers and Heads of relevant agencies,

DECISION:

Article 1. - Issued herewith are the temporary regulations on creating sources of loans for investment in basic construction of power projects.

Article 2. - These regulations shall take effect from the date of issuance.

Article 3. - The Ministers of Ministries, agencies at the level of ministries, Heads of government agencies, Chairmen of People's Committees of provinces and centrally governed cities are responsible for implementing these regulations.

TEMPORARY REGULATIONS ON CREATING SOURCES OF LOANS FOR INVESTMENT IN POWER PROJECTS CONSTRUCTION 

(Issued together with Decision No. 317-TTg dated June 15, 1994)

of the Prime Minister)

Article 1. Borrowing funds to invest in power projects to implement plans for investment in improving and constructing power sources and grids shall be carried out according to the principle of self-borrowing and self-repayment.

Article 2. Sources of loan funds for investing in power projects include:

1. Investment credit funds for basic construction provided by the Development Bank according to the annual plan.

2. Funds raised from the people and enterprises under various economic sectors within the country.

3. Temporary borrowing from other sources to construct power projects (if any).

4. Official Development Assistance (ODA) funds according to loan agreements between governments of countries and international financial organizations designated by the Government for power projects.

5. Funds from other international organizations and foreign companies and groups, including deferred payment purchases of materials and equipment in accordance with Vietnamese regulations and international practices.

Article 3. The Ministry of Energy selects certain projects that meet the necessary conditions to cooperate with foreign entities through joint ventures or BOT arrangements in accordance with the provisions of the Law on Foreign Investment.

Article 4. Regarding the form of borrowing and repayment:

1. Loans from ODA funds shall be implemented in accordance with the regulations on borrowing and repaying foreign debts issued together with Decree No. 58-CP dated August 30, 1993 of the Government.

2. Loans from foreign commercial credit funds shall be arranged by the State Bank selecting commercial banks to borrow and lend again to the project owner enterprises. Enterprises are encouraged to seek loan sources and bank guarantees in accordance with the regulations on managing borrowing and repaying foreign debts.

3. Loans from state investment funds according to the national plan, the Ministry of Energy registers the plan at the beginning of the year, and the project owner enterprises borrow and repay directly to the assigned bank.

4. For loans from domestic people and enterprises under various economic sectors, the borrowing and repayment procedures shall be carried out in accordance with the regulations on issuing corporate bonds and stocks and the guidance of the Ministry of Finance.

5. Loans from other temporary sources (if any) shall be agreed upon specifically by the Ministry of Energy and the project owner enterprise regarding the amount borrowed, term, interest rate, and borrowing and repayment methods with each lending organization and general state regulations.

Article 5Power projects borrowing investment funds, regardless of the source, must be implemented according to each project, included in the annual capital plan based on the need for capital usage, and must have all necessary conditions for basic construction investment procedures in accordance with current regulations.

Article 6. Project owner enterprises directly handle borrowing procedures, receive funds, and repay debts in accordance with the terms of the loan contracts with lending organizations.

Article 7. Sources of repayment funds for project owner enterprises include:

Depreciation of fixed assets formed from borrowed capital.

Post-tax profits.

Other sources of project owner enterprises (if any).

Article 8. Power projects borrowing funds from ODA sources enjoy favorable conditions of this fund regarding interest rates, grace periods, and repayment periods according to the Government's signed agreements. The service fee for domestic loan relending does not exceed 0.3% (three thousandths per annum).

Article 9. To facilitate the transition of investment mechanisms for power projects from budget allocation to borrowing funds:

The Ministry of Energy compiles the annual loan capital needs for investment in power projects, coordinates with the State Planning Committee, the Ministry of Finance, and the State Bank to find balanced loan sources according to the objectives and implementation schedules of projects in the annual plan and report to

Article 10. the Minister of Energy, the Minister of Finance, the Minister and Chairman of the State Planning Committee; the Governor of the State Bank; and the Head of the Government Price Control Board are responsible for coordinating detailed guidance on the implementation of these regulations.