INTEREST RATES ON LOAN CAPITAL FOR PPP
On July 21, 2017, the Ministry of Finance issued the Circular No. 75/2017/TT-BTC on amending the 55/2016/TTBTC providing contents of financial management of investment projects in the form of public-private partnership and costs of investor selection.
Accordingly, if the investor appointed without bidding, the loan capital interest rate shall be determined via negotiation or agreement between the competent State agency and the appointed investor. The interest rate referred for carrying out the negotiation or agreement must abide by the www.LuatVietnam.vn 3 principles such as the interest rate shall not exceed 1.5 times the simple average of bid-winning interest rates on government bonds whose term is corresponding to the duration of PPP project contract (Project contract) within 10 bidding sessions preceding the time of contract negotiation. The bid-winning interest rates on government bonds are published on the websites of the State Treasuries or the Hanoi Stock Exchange. In case the number of bidding sessions for issue of government bonds whose term is corresponding to the duration of PPP project within 06 months preceding the time of contract negotiation is less than 10, the interest rate shall not exceed 1.5 times the simple average of bid-winning interest rates on government bonds of corresponding term within 06 months preceding the time of contract negotiation. The interest rate shall not exceed the average interest rates on medium-term and long-term loans of 04 state commercial banks at the time of contract negotiation. In previous regulations, the Circular No. 53/2016/TT-BTC prescribes that The loan capital interest rate referred for carrying out the negotiation and agreement shall not exceed 1.3 times the average yield on government bonds with 10-year maternity that have been issued by employing bidding method within 03 months preceding the time of contract negotiation.
This Circular takes effect on September 05, 2017.
