Việt Nam moves to improve efficiency in foreign loan and ODA capital use

Decree 242/2025/ND-CP introduces three key groups of solutions to enhance the efficiency of managing and using official development assistance (ODA) and foreign preferential loans.

The Ministry of Finance (MoF) on Friday held a workshop in Hà Nội to introduce Decree 242/2025/ND-CP, a newly issued regulation aimed at improving the management and use of official development assistance (ODA) and foreign preferential loans.

Nguyễn Quốc Phương, director general of the MoF's Department of Debt Management and External Finance, emphasised the strategic significance of the decree.

"This decree is critically important. It not only helps remove barriers in accessing and utilising ODA and foreign loans, but also reflects the Government’s institutional reform efforts,” Phương said.

“It aligns with the Politburo’s four breakthrough resolutions that aim to unlock national resources and drive Việt Nam into a new era of development and prosperity.”

The decree introduces three key groups of solutions to enhance the efficiency of managing ODA and foreign preferential loans.

Simplifying administrative procedures is a central focus, including streamlining the process for adjusting project documents, requiring Ministry of Finance input only when capital increases significantly.

The regulation also simplifies procedures for loan reception, capital plan assignment, surplus capital utilisation and the selection of servicing banks, while reducing the number of cases requiring investment policy adjustments, thereby accelerating project implementation timelines.

At the same time, it emphasises greater decentralisation and delegation of authority in managing ODA and foreign preferential loans, granting ministries, sectors and local authorities the power to approve investment policies for Group A projects and others that were previously under the direct authority of the Prime Minister.

In addition, it assigns relevant governing bodies to oversee most regional projects, excluding certain specialised fields, and delegates the authority to approve the use of surplus capital and make adjustments to projects implemented by State-owned enterprises that re-borrow ODA and preferential loans.

Refining mechanisms and removing existing obstacles are also included with key measures given to clarifying regulations related to State-owned enterprises that utilise ODA and preferential loans, thereby facilitating smoother public investment processes.

In his speech at the event, Phương confirmed that the MoF, along with his department, would continue to work closely with ministries, sectors and local authorities to support the effective implementation of the decree.

He pledged that clear, timely and accessible guidance would be provided to address any challenges that arise, ensuring smooth execution at all levels.

Phương said that institutional reform efforts would be continuously updated to enhance governance capacity. The ultimate goal, he said, was to ensure that every ODA and foreign preferential loan would be used as effectively as possible, serving the vision of a strong and sustainable Việt Nam.

During the conference, representatives from ministries, Government agencies, localities, international donors and enterprises engaged in in-depth discussions on improving the legal framework for managing and implementing public investment projects, particularly those funded by foreign loans and aid.

Key issues highlighted included the need to remove rigid regulations on project implementation timelines to enhance flexibility, to consider allowing donor commitment letters as a valid basis for project approval, to adjust the management mechanism for aid programmes and projects in line with general regulatory frameworks and to address financial mechanism challenges.