The Government has issued the Decision 44/2011/QD-TTg dated August 18, 2011 on a list of programmes and projects prioritised to have the government guarantee. The decision takes effect on October 10, 2011.
The seven programmes and projects include:
Investment programs and projects approved by the National Assembly or Prime Minister and are rated important, urgent for implementation.
National target credit programmes are financed by State-owned policy banks and decided by the Prime Minister.
Commercial credit programmes and projects are tied to ODA capital, coming in the form of mixed credit.
Energy and extractive programmes and projects: Electricity investment and development; oil refinery and gas investment; alumina and aluminium extraction investment. These investments must be approved by the lawmaking National Assembly.
Infrastructure construction and development programmes and projects: deep seaport construction and operation investment in accordance with the plan approved by the Prime Minister; airplane fleet investment in accordance with the plan ratified by the Prime Minister; highway construction investment in accordance with the plan ratified by the Prime Minister; national bridge construction investment in accordance with the plan adopted by the Prime Minister; locomotive purchase in national railway projects ratified by the National Assembly; education and vocational training establishment construction investment with a high possibility of recovering investment capital.
Programmes and projects produce major mechanical products to replace imports.
Other programmes and projects are decided by the Prime Minister.
At present, regulations on Government guarantees are provided in the Prime Minister’s Decision 272/2006/QD-TTg dated November 28, 2006. Government guarantees are those guarantees of the highest legality in Vietnam. A Government guarantee commitment is established in the form of letter of guarantee or guarantee contract. The Government provides only guarantees, not re-guarantees.
Objects to be considered for provision of Government guarantees (the guaranteed) include domestic enterprises, economic organisations and credit institutions of all economic sectors that directly sign loan agreements with foreign lenders to borrow capital by mode of self-borrowing and accountability for debt payment for execution of investment or credit programmes or projects and fully satisfy the following conditions: Ensuring that at least 20 percent of the total investment capital for each programme or project is the own capital; Having complete dossiers of application for Government guarantees as stipulated; Having conducted normal business activities without a loss for the last three consecutive years and being currently free from overdue domestic and foreign debts; Agreeing with the guarantee charge rate specified in Article 14 of Decision 272/2006/QD-TTg; Submitting to sanctions imposed by the guarantee-providing agency, including the freezing of accounts to coerce the compensation for financial obligations performed by the guarantee-providing agency on their behalf.
Guarantee level must not exceed 80 percent of the total investment capital of a programme or a project, including insurance premium and loan interest during the construction process, except for programmes and projects of specially high urgency and importance to national socioeconomic development
Guarantee level must lie within the annual guarantee limit calculated by the Finance Ministry based on the annual limit of foreign commercial loans of enterprises or organisations of the public sector and the forecast of the annual foreign loans of the private sector approved by the Prime Minister.
Thanh Yen
Vietnamese
