Circular No. 34/TC-KBNN guiding the issuance of bonds for the Yaly Hydropower Project

CIRCULAR

Circular No. 34 TC/KBNN dated July 11, 1996, guiding the issuance of bonds for the Yaly Hydropower Project

Implementing Decision No. 427/TTg dated June 25, 1996 of the Prime Minister on the issuance of bonds to raise capital for the Yaly Hydropower Project, the Ministry of Finance guides implementation as follows:

1. Bonds for raising capital for the Yaly Hydropower Project are a form of project bond (government bond) issued and guaranteed for payment by the Ministry of Finance according to the provisions of Government Decree No. 72/CP dated July 26, 1994, and Circular No. 75 TC/KBNN dated September 14, 1994 of the Ministry of Finance guiding the regulations on the issuance and payment of government bonds.

2. The issuance of bonds for the Yaly Project shall be carried out according to the conditions stipulated in Decision No. 427/TTg dated June 25, 1996 of the Prime Minister, specifically as follows:

2.1. The total amount of bond issuance for the entire project is 1.100 billion VND from 1996 and subsequent years. 2.2. Bonds have a term of one year or more.

2.3. The interest rate on bonds issued through auction is formed based on the auction results through the State Bank or the retail bond interest rate directly through the Treasury system, decided by the Minister of Finance after consulting with Vietnam Electricity Corporation for each issuance period in accordance with market rates.

2.4. The capital raised from the issuance will be centralized at the Central Treasury, managed and used directly by Vietnam Electricity Corporation to transfer funds to the Investment Development Department of Gia Lai for payment to the Yaly project in accordance with current construction management regulations.

2.5. The source of funds for principal and interest payments on the bonds and issuance costs will be guaranteed by Vietnam Electricity Corporation, drawn from the basic depreciation fund and annual post-tax profits of Vietnam Electricity Corporation.

Interest on bonds raised for investment in the Yaly project and issuance and payment costs will be included in the construction cost of the project and settled within the total capital invested annually in the project.

3. Procedures for issuing and paying bonds:

3.1. Issuing bonds:

- Based on the total capital-raising amount of 1.100 billion VND approved by the Prime Minister, Vietnam Electricity Corporation will cooperate with the Central Treasury to develop detailed plans for bond issuance and payment.

- Based on the annual capital-raising plan (divided by fund) and the completed construction volume of the project eligible for payment confirmed by the Investment Development Department of Gia Lai, Vietnam Electricity Corporation will issue a letter requesting the Ministry of Finance to issue bonds according to the main contents as follows:

+ Issuance time

+ Capital-raising volume needed

+ Estimated bond term

- Based on the request letter from Vietnam Electricity Corporation, the Central Treasury will determine the bond issuance plan and submit it to the Ministry of Finance for approval for each issuance period to ensure alignment with the time and capital-raising volume required for the project.

3.2. Management and use of the issuance capital:

- Vietnam Electricity Corporation is allowed to open a deposit account at the Central Treasury. This account is used to receive funds raised from bond issuance and transfer capital to the Investment Development Department of Gia Lai for payment to the Yaly Hydropower Project.

- The Central Treasury will transfer all funds raised from bond issuance for the Yaly Project into the deposit account opened by Vietnam Electricity Corporation at the Central Treasury.

- Based on the amount transferred into the aforementioned deposit account, Vietnam Electricity Corporation will process the debt recognition procedure with the Central Treasury regarding the principal and interest on the bonds issued for the Yaly Project according to the attached model in this Circular.

- Vietnam Electricity Corporation is responsible for transferring capital to the Investment Development Department of Gia Lai (which has an account at the Gia Lai Treasury) for managing and disbursing payments for the completed construction volume of the Yaly Project in accordance with current construction management regulations.

3.3. Bond repayment:

- Upon maturity, Vietnam Electricity Corporation will transfer funds to the Central Treasury according to the principal, interest, and repayment time recorded in the bond issuance receipt.

- In cases where new bonds are issued to repay old debts, Vietnam Electricity Corporation and the Central Treasury need to coordinate calculations and report to the Ministry of Finance for decision-making to ensure sufficient new revenue sources for timely repayment of maturing bonds.

- At the bond repayment deadline, if Vietnam Electricity Corporation does not have sufficient funds to repay maturing bonds, the Ministry of Finance (Investment Development General Department, Treasury) will draw from the basic depreciation fund of Vietnam Electricity Corporation to repay the bondholders.

4. After each issuance period, Vietnam Electricity Corporation is responsible for paying the issuance and bond repayment costs to the Central Treasury, including:

- Printing fees for bond certificates (if any) according to the printing contract.

- Issuance and payment fees of 0.25% of the issuance amount if the bonds are issued through an auction via the State Bank to cover auction costs according to Circular No. 01/NHNN-TC dated February 10, 1995. - Issuance and payment fees of 0.5% of the issuance amount if the bonds are issued through the retail system of the Treasury.

5. The Central Treasury, Investment Development General Department, Vietnam Electricity Corporation, and related units are responsible for coordinating the issuance, management, and use of capital, and bond repayment in accordance with the guidance provided in this document and current regulations.