Owner's equity to occupy 10-20 pct of total investment in PPP projects

10:39 | 15/05/2018 Investment

The Government has issued Decree No.63 stipulating the areas, conditions, and procedures for investments in PPP (public-private partnership) projects including regulations on the owner's equity of investors participating in PPP projects.

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According to the Decree, the Government has stipulated that the owner's equity of investors participating in a PPP project with a total investment capital of up to VND1,500 billion (US$66 million) must occupy at least 20 pct of the total investment capital.

Regarding PPP projects with a total investment capital of more than VND1,500 billion, the ratio of owner's equity must not be lower than 10 pct of the total investment capital.

Meanwhile, the State capital participating in a PPP project is not factored into the total investment capital to calculate the owner's equity ratio.

Concerning a BT (Build-Transfer) project, investors must meet the additional requirements of owner's equity (if any) in accordance with the laws on investment, construction, housing and real estate business, and other related laws.

The National Assembly will have the ability to approve in principle projects of national significance, while the Prime Minister will decide to invest in group-A projects with more than 30 pct their capital sourced from the State budget or projects with over VND 300 billion (US$13.2 million) funded by the State budget and group-A projects in the form of BT contracts.

Ministers, heads of ministerial-level agencies, and Government agencies will agree in principle on the projects which do not belong to the aforementioned cases.

The Decree will take effect on June 19 this year.

Theo NDO