PM issues directive to strengthen ODA management, disbursement

PM issues directive to strengthen ODA management, disbursement

Prime Minister Le Minh Hung has issued a directive on the focused and targeted allocation of official development assistance and foreign concessional loans, prioritising nationally significant and key infrastructure projects.

Directive No.27/CT-TTg, dated June 25, sets out measures to strengthen the management of official development assistance (ODA) and foreign concessional loans, improve efficiency, and accelerate disbursement in 2026 and beyond.

According to the Ministry of Finance (MoF), as of June 15, the nationwide disbursement rate for the 2026 public investment plan financed by foreign sources, calculated under the revenue-and-expenditure recording mechanism, stood at just 9.99 per cent of the allocated plan.

The rate reached 9.37 per cent for local authorities and 10.79 per cent for central ministries and agencies, both significantly lower than the disbursement rate for domestically funded public investment. The disbursement rate for on-lending programmes implemented by local authorities was only 8.98 per cent of the allocated plan.

Notably, several ministries, central agencies and local authorities recorded a zero per cent disbursement rate.

To strengthen management, improve the efficiency of ODA and concessional loan utilisation, and ensure the full disbursement of annual public investment plans assigned by the Prime Minister, thereby supporting the government's goal of achieving double-digit economic growth, the directive requires ministries, central agencies and local authorities to concentrate resources on projects of the highest priority. These include nationally significant projects, key infrastructure projects and initiatives with strong spillover effects that can create long-term growth momentum while promoting balanced regional development.

The directive also requires a comprehensive review of medium-term public investment needs funded by foreign sources from the central budget for the 2026-2030 period. Ministries and agencies are instructed not to propose or seek approval for new borrowing, programmes or projects that are unnecessary, inefficient, lack clear justification or fail to demonstrate sufficient feasibility.

The PM stressed the need to improve the efficiency of ODA and concessional loan utilisation, while ensuring both investment effectiveness and project feasibility.

Projects are to be categorised according to their disbursement performance. Funding will be prioritised for projects with strong implementation progress, priority projects requiring early completion, projects nearing completion and those approaching the deadline for disbursement under their respective loan agreements.

At the same time, annual foreign-funded investment plans must not allocate capital to projects that are not ready for disbursement. New projects will not be approved for agencies or units that have allowed prolonged delays in disbursement, losses, waste or misconduct without taking timely corrective action in accordance with regulations. Capital will also be promptly reallocated from slow-disbursing projects to those with stronger implementation performance and additional funding needs.

The directive further calls for improvements in investment planning and project preparation. Relevant authorities are instructed to complete investment and construction procedures without delay, ensure adequate supplies of construction materials and allocate sufficient counterpart funding to facilitate payments in line with approved budgets, thereby enabling projects to meet implementation and disbursement schedules.

Alongside efforts to accelerate disbursement, the PM has called for stronger inspection and supervision throughout the entire project cycle, including project selection, investment preparation, approval of investment policies, capital allocation, project implementation, and the management, utilisation and disbursement of ODA and concessional loans.

The directive emphasises that foreign-funded capital must be used for the intended purposes, allocated to the appropriate beneficiaries and managed in accordance with regulations, while ensuring efficiency, cost-effectiveness, transparency and accountability.

Authorities are instructed to promptly detect, prevent and strictly deal with corruption, misconduct, vested-interest practices, bid rigging, inflated investment estimates, inflated contract values, losses, waste and any other violations arising during the proposal, approval, implementation or disbursement of ODA – and concessional loan-funded programmes and projects.

The PM also instructed ministries, sectors and local authorities to submit periodic reports on foreign-funded disbursement in accordance with regulations. They are required to prepare detailed monthly disbursement plans for each project covering the remaining months of 2026, clearly identifying obstacles, analysing their causes and proposing practical solutions to ensure full disbursement of the 2026 foreign-funded public investment plan. These reports must be submitted to the MoF for consolidation by July 10.

The PM instructed the MoF to proactively and decisively engage in discussions and work with donors to simplify and shorten procedures related to the disbursement of ODA loans and preferential foreign loans; based on reports from ministries, sectors, and localities, to promptly address any arising issues within the MoF's scope of responsibility, ensuring the progress of implementation and disbursement as committed to donors.

VIR