The Government issued Decree 79/2021 to revise some articles of Decree 97 dated June 30, 2018 on on-lending or ODA and foreign concessional loans.

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Clause 1, Article 21 on the on-lending rate to provincial People's Committees is amended as below: local governments that have the rate of additional funding from the central budget to total local budget expenditure equalling 70% or more, shall be entitled to the on-lending rate of 10% of ODA and concessional loans instead of 30% in the existing regulations.

The local governments that have the rate of additional funding from the central budget to the total local budget expenditure at 50% to less than 70 will be entitled to the on-lending rate of 30% of ODA and concessional loans instead of 40% described in existing regulations.

Local governments that have the rate of additional funding from the central budget to total local budget expenditure equalling less than 50% shall be entitled to the on-lending rate of 50% of ODA or concessional loans.

Local governments that have remittances to the central budget (except for Hanoi and HCM City), shall enjoy the on-lending rate of 70% of ODA and concessional loans.

The on-lending rate to Hanoi and HCM City is 100% of ODA and concessional loans.

For programmes and projects related to sustainable development and response to climate change of in some provinces in Mekong Delta funded by the Government under Resolution 41 of the Government dated April 1, 2021, the on-pending rate will be decided by the Government but not lower than 10%.

The decree also amends Clause 3, Article 16 on collaterall. The value of the collateral will be equal to a minimum of 120% of the original value of an on-lent loan for enterprises and equal to 100% of the original value of an on-lent loan for public delivery service units.

During the on-lending process, if the value of collateral drops to be lower than the above rates, the end borrower shall add another collateral to ensure the minimal rate of collateral.

Decree 79/2021 shall be in enforcement from October 1.