Prime minister Nguyen Xuan Phuc has called on government agencies to work towards boosting official development assistance (ODA) disbursements for projects in Vietnam as the time for gaining access to low-interest loans is running out.
Phuc told them to swiftly complete procedures for all the capital pledged for Vietnam by the International Development Association (IDA) to be disbursed on schedule, and find ways to ensure the efficient use of ODA and concessional loans.
The government leader made the urge in his conclusion at a recent meeting on preparation and approval for projects using IDA finances allocated for Vietnam by the World Bank (WB) in the IDA 17 term and other ODA-funded projects to be executed in fiscal 2016.
IDA 17 is the final term that the WB would give IDA capital to Vietnam in the 2014-2017 period. After that, Vietnam will have to take out loans with higher interest rates.
As for the projects for strengthening land management and land database, and improving teacher quality using IDA capital, the prime minister agreed to keep the scale of the first project unchanged, and will consider its expansion later.
Phuc urged related agencies to quickly finish procedures for the two projects for submission to him for approval before May 20 to meet the schedule for negotiations over funding and put them in the list of projects to be implemented in fiscal 2016.
Urgent preparations for projects to be carried out in fiscal 2017 are also required.
The Ministry of Planning and Investment is assigned to coordinate with other ministries and agencies to review and pick projects planned for implementation in fiscal 2017 and suggest conducting the feasibility study for viable projects only.
Management agencies for ODA-financed projects are told to use the capital effectively and not to use ODA and preferential loans for capability improvement projects and lending on to others.
Pledged ODA loans totalling around $21 billion are awaiting for disbursement for projects in Vietnam as shown in data of the Planning and Investment Ministry.
According to the Asian Development Bank (ADB), if Vietnam does not complete the required procedures to boost ODA disbursements, the country might incur some $100 million in opportunity cost.