Circular No. 60/TC-ĐTPT guiding the management and use of investment capital for the YAZUN irrigation project.

CIRCULAR

MINISTRY OF FINANCE DECREE NO. 60/TC-ĐTPT ON JULY 27, 1995

GUIDELINES FOR THE MANAGEMENT AND USE OF INVESTMENT FUNDS FOR THE YAZUN IRRIGATION PROJECT

Pursuant to the loan agreement between the Government of Vietnam and the Arab Economic Development Fund signed on June 17, 1993; GENERAL PROVISIONS Pursuant to Decree No. 58/CP dated August 30, 1993 of the Government on the regulations for managing loans and foreign debt repayment, and the attached Circulars guiding the implementation of the decree;

After reaching consensus with the State Planning Commission, the State Bank of Vietnam, the Ministry of Water Resources, and the Vietnam Foreign Trade Bank; N |||The Ministry of Finance hereby provides guidelines for the management and use of investment funds for the Yazun Irrigation Project as follows:

1\. The loan from the Arab Economic Development Fund (referred to as the Arab Fund) for constructing the Yazun project under the Ministry of Water Resources is an external loan of the Government; therefore, procedures for withdrawing funds, using funds, and repaying the loan shall be carried out according to Decree No. 58/CP dated August 30, 1993 of the Government, the implementing Circulars, the terms and annexes of the loan agreement between the Government of Vietnam and the Arab Fund signed on June 17, 1993. The aforementioned loan will be recorded as revenue in the state budget, and each year, the state budget will allocate funds to repay the debt when it becomes due.

2\. The sources of investment funds for the Yazun Irrigation Project include:

I- GENERAL PROVISIONS:

- The loan from the Arab Fund according to the signed agreement on June 17, 1993 between the Government of Vietnam and the Arab Fund.

- Domestic funds allocated to the project and included in the annual national investment plan.

3\. The provision of funds (domestic and foreign) for the Yazun Water Resources project shall be carried out according to the approved project and in accordance with the Investment Management and Construction Regulations issued together with Decree No. 177/CP dated October 20, 1994 of the Government, the implementing Circulars, and the provisions in the signed agreement with the Arab Fund.

4\. The Ministry of Finance and the State Bank of Vietnam authorize the Vietnam Foreign Trade Bank to handle procedures for withdrawing funds and making foreign payments with the Arab Fund.

During the process of withdrawing funds and making foreign payments with the Arab Fund, the Vietnam Foreign Trade Bank is entitled to service fees at a rate of 0.07% per annum on the amount withdrawn each time, collected every six months concurrently with the repayment period of the Arab Fund (this service fee includes both the letter of credit opening fee and the document submission fee...). This service fee will be included in the value of the construction project.

A\. Sources of Budget Allocated Funds:

1\. Each year, based on the requirements and content of the budget revenue and expenditure plan guided by the Ministry of Finance, the Ministry of Water Resources is responsible for preparing and defending the investment and construction plan with the State (including domestic funds and the Arab Fund loan) for approval and allocation of funds for the project.

II. SPECIFIC PROVISIONS:

2\. The project owner is responsible for:

- Preparing the annual investment and construction fund plan (including domestic and foreign funds) for each project component, while clearly identifying the amount of foreign funds to be spent domestically and abroad (by quarter and month) to serve as the basis for withdrawing funds from the Arab Fund and submitting them to the Ministry of Water Resources, the Ministry of Finance, and the State Planning Commission.

- Reporting to the Ministry of Finance, the Ministry of Water Resources, and the State Planning Commission on the project implementation status, fund allocation, withdrawal of funds, and use of the Arab Fund loan every quarter on the 25th day of the last month of each quarter.

- Using funds for their intended purpose and effectively in accordance with the project regulations and the signed agreement.

3\. Each time funds are withdrawn, the project owner must prepare a withdrawal application with the Ministry of Water Resources' endorsement, accompanied by relevant payment documentation consistent with the loan agreement's provisions, for the Ministry of Finance (Department of Foreign Financial Affairs) to approve.

Based on the Ministry of Finance's approval, the Vietnam Foreign Trade Bank will proceed to withdraw the Arab Fund loan for the project.

4\. Immediately after withdrawing the loan (within one working day), the Vietnam Foreign Trade Bank must send the Ministry of Finance a list of withdrawals and a copy of the credit notification along with the confirmation of receipt from the Arab Fund (in cases of direct payment or commitment procedures, the bank must also submit to the Ministry of Finance a goods entry report specifying the payment details, the value of the documents in original currency and equivalent in Kuwaiti Dinars, the date the Arab Fund records the debit...) to enable the Ministry of Finance to record the loan from the Arab Fund as revenue in the state budget and record the disbursement of investment and construction funds for the project (based on the selling exchange rate published by the Vietnam Foreign Trade Bank at the time of recording).

- Quarterly, biannually, and annually, the Vietnam Foreign Trade Bank must provide a statement of account for the project to the Ministry of Finance.

5\. The General Department of Investment and Development is responsible for allocating investment funds to the project owner from the Arab Fund loan in accordance with the state regulations.

B\. Loan from the Arab Fund for purchasing machinery and equipment:

- Units utilizing the loan are those directly or indirectly related to the construction of the Yazun Irrigation Project and are entities eligible for borrowing as specified by the Minister of Water Resources.

- The General Department of Investment and Development guides units in handling borrowing procedures.

- Borrowing units must sign a loan agreement with the General Department of Investment and Development in foreign currency (Kuwaiti Dinars), with the date of liability being the date the Arab Fund records the debt for Vietnam.

Units within the Ministry of Water Resources borrowing from the Arab Fund will repay interest in foreign currency at an annual rate of 3.8% on the outstanding principal balance at each point in time, including Arab Fund interest, service fees of the Vietnam Foreign Trade Bank, and loan processing fees.

Interest repayment will be made twice a year, one month before the principal repayment deadline, with the maximum repayment period being 18 half-years, starting from the end of the grace period (one year).

- After signing the credit agreements with borrowing units, the General Department of Investment and Development compiles and reports to the Ministry of Finance (Department of Foreign Financial Affairs) a list of borrowing units, repayment schedules for principal and interest. Quarterly reports to the Ministry of Finance on the amounts of principal and interest recovered, amounts submitted to the state budget...

III\. INSPECTION AND SETTLEMENT WORK.

- The project owner is responsible for reporting the use of funds and project implementation status according to the commitments signed between the Government of Vietnam and the Arab Fund in the loan agreement signed on June 17, 1993.

III. INSPECTION AND SETTLEMENT WORK.

- The project sponsor is responsible for reporting on the use of capital and the implementation of the project in accordance with the commitments signed between the Government of Vietnam and the Co-operation Fund under the Loan Agreement dated June 17, 1993.

- Periodically, the Ministry of Finance, the Ministry of Water Resources, and the State Planning Commission shall inspect the implementation of the project and the use of capital (domestic and foreign) by the project owner. If the project owner misuses the capital for purposes other than intended or uses it inefficiently, the Ministry of Finance shall suspend the transfer of funds to address the violation.

- The Yazun hydraulic project owner must complete the final settlement when the project or its components are completed in accordance with current regulations.

IV. IMPLEMENTATION PROVISIONS:

This Circular takes effect from the date of signature. During its implementation, any difficulties should be promptly reported to the Ministry of Finance for study and resolution./.