Laws of Vietnam

Pursuant to the Law on Organization of the Government on the 30th of September, 1992;

At the proposal of the Minister of Energy, the Minister-Chairman of the State Planning Committee and the ministers and heads of the concerned services.

Article 1.- To promulgate together with this Decision the Provisional Statute on the Generation of Loans for Investment in the Construction of Electricity Projects.

Article 2.- This Decision takes effect from the date of its promulgation.

Article 3.- The Ministers of the ministries and the ministerial level offices, the heads of the agencies attached to the Government, the chairmen of the People's Committees in the provinces and cities directly under the Central Government have the responsibility to implement this Decision.

Article 1.- The borrowing of capital for investment in the construction of electricity projects in implementation of the investment plan for the transformation and building of the electric sources and electric grids shall be effected on the principle of self-borrowing and self-repayment.

Article 2.- The loans to invest in electricity projects come from the following sources:

1. Credit funds for investment in capital construction disbursed annually by the Bank for Investment and Development according to the annual plans.

2. Capital mobilized from the population and businesses of different economic sectors in the country.

3. Temporary loans from other sources to build electricity projects (if any).

4. Funds from the Official Development Aid (ODA) under loan agreements signed with the governments of various countries or international monetary organizations and reserved by the Government to lend to the electricity projects.

5. Funds provided by other international organizations and foreign companies and corporations including the purchases with delayed payment of foreign materials and equipment in conformity with Vietnamese regulations and international practice.

Article 3.- The Ministry of Energy shall choose a number of projects with the required appropriate conditions to cooperate with foreign countries either as joint ventures or as BOT projects, as prescribed by the Law on Foreign Investment.

Article 4.- On the modalities of borrowing and debt repayment:

1. Loans from the Official Development Aid (ODA) shall be made according to the Statute on Borrowing from and Debt Repayment to Foreign Countries issued along with Decree No. 58-CP of the Government on the 30th of August, 1993.

2. Borrowings from foreign commercial credits shall be made by the State bank which shall choose the foreign commercial bank to borrow and which shall reloan to the businesses and investing businesses. The investing businesses are encouraged to seek for lending sources and the guarantee banks conformable with the Statute on Management of the Borrowings from and Debt Repayment to Foreign Countries.

3. If the borrowings come from the investment capital under the State plan, the Ministry of Energy shall register the borrowings right at the beginning of the year and the investing businesses shall directly borrow from and directly repay to the Bank which is assigned this task.

4. With regard to the borrowings from the population and businesses of the different economic sectors in the country, the borrowing and debt repayment shall be made according to the Statute on the Issuance of Business Bonds and Stocks and to the guidance from the Ministry of Finance.

5. If the borrowings come from other provisional lending sources (if any), the Ministry of Energy together with the investing business shall agree with each lending organization on concrete terms, such as the size of the loan, the term for repayment, the interest rate and the modalities of borrowing and repayment in conformity with the general prescriptions of the State.

Article 5.- All projects which apply for investment capital loans, irrespective of the sources of capital, shall be considered for each project and for the overall need in capital each year. It must fill all the conditions and procedures for investment in capital construction under current regulations.

Article 6.- The investing business in an electricity project shall personally fill the procedures of borrowing, receiving the loan and repaying the debt in conformity with the terms in the loan contract signed with the lending agency.

Article 7.- The sources of capital for debt repayment of the investing business include:

- The depreciation cost of the fixed assets constituted by the loan,

- After-tax profit,

- Other sources of the investing business (if any).

Article 8.- The electricity projects borrowing from the Official Development Aid (ODA) shall enjoy preferential terms of this fund in interest rate, grace period and terms for debt repayment according to the agreement signed by the Government. The service fee in re-lending within the country shall not exceed 0.3% (three per thousand) a year.

Article 9.- To create conditions for the change of the investment mechanism among the electricity projects from budget allocations to capital lending:

- The Ministry of Energy shall draft an overall amount of loans each year to invest in the construction of electricity projects and, in collaboration with the State Planning Committee, the Ministry of Finance and the State Bank shall find the necessary loans as required by the objectives and the tempo of construction already written in the projects for the plan year and report to the Prime Minister.

- With regard to the fixed assets belonging to the budgetary capital which have been allocated to the electric service so far, the State allows the re-investment of 100% (one hundred percent) of the depreciation cost in the period from 1995 to the year 2000 for the purpose of developing the electricity generating sources and the electric grids. The Ministry of Finance shall guide the way to manage and use this fund.

- The Ministry of Energy shall call a conference with the Ministry of Finance, the Government Pricing Commission and the other concerned offices to work out a plan on the selling price of electricity based on the principle of gradual readjustment, compensation for expenditures and allowing for accumulation. The conference shall also re-examine the turnover tax, and profit tax and deduction from the capital with regard to commercial electricity and submit its proposal to the authorized offices for readjustment.

Article 10.- The Minister of Energy, the Minister of Finance, the Minister-Chairman of the State Planning Committee, the Minister-Chairman of the State Planning Committee, the Minister-Chairman of the State Committee for Cooperation and Investment, the Governor of the State Bank and the Head of the Government Pricing Committee have the responsibility to collaborate in working out detailed provisions for the implementation of this Statute.