Synthesize concepts, principles of use, and sources of reciprocal capital mobilization in a simple and easy-to-understand way, helping you get the most overview of this type of capital.

Viewing: What is counterpart capital

Article Table of Contents: 1. What is counterpart capital?.2. Principles of using reciprocal capital.3. From what source does the counterpart fund come from?.4. Amounts paid directly from counterpart funds?.

1. What is counterpart capital?

Reciprocal capital is the capital contributed by the Vietnamese side (in kind or in cash) to a program or project funded by ODA or concessional loan (excerpt from Clause 26, Article 3 of Decree No. 16/2016/ND-CP). .

Reciprocal capital is usually obtained from the central and local budget, from the project owner or from other capital sources.

Example 1: Total cost to build Hung Ha bridge (connecting 2 provinces of Hung Yen and Ha Nam) is 2,900 billion VND (The capital is mobilized from ODA capital of the Korea Economic Development Cooperation Fund and capital. counterpart of the Vietnamese government). Assuming, in this project, the Vietnamese side contributes 40% of the total project (about 1160 billion), the counterpart capital is 1160 billion.

Example 2: In a project to build social housing for workers in industrial zones, the total capital to be mobilized is 3,000 billion. (The capital is mobilized with 50% of ODA capital from the government’s social housing construction support fund and 50% from the project investor). At that time, the reciprocal capital that the investor needs to contribute is 1500 billion.

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2. Principles of using reciprocal capital

– Reciprocal capital is prioritized to be used for projects using ODA or concessional loans that are fully allocated by the state budget from the 5-year medium-term public investment capital plan and the investment capital plan. Annually, the reciprocal capital must be fully mobilized to ensure the implementation plan of the programs and the set out capital sources.- The source, level of capital and the mechanism of counterpart capital contribution must be consistent with the plan. The program’s expenditures, based on the agreement between the subjective agency and the foreign donor, are shown through documents and projects that have been licensed by different levels of government.

3. From which source does the counterpart fund come from?

– For the state: Reciprocal capital is taken from the state budget, from local governments, from preferential loans of domestic and foreign donors.– For enterprises: The counterpart capital is taken from from the company’s business capital, from the state’s preferential loans, from bank loans or from other sources, etc.

4. Amounts paid directly from reciprocal capital?

– Reciprocal capital is used to pay for operations of the management board (salaries, bonuses, administrative expenses, office expenses,…) complete legal procedures for project implementation and acceptance,..- Project implementation costs: Meeting, organizing bidding, contractor selection, surveying, design and construction costs project, costs for construction of some items, procurement of equipment for the project, etc.- Costs of auditing, accounting, supervision of the project implementation process.- ……………………

In case the reciprocal capital has been allocated for the project but has not been used up, the governing body has the right to flexibly transfer capital to other projects in accordance with law. When reciprocal capital is limited, projects need to pour too much capital, capital will be poured based on the amount of capital to be mobilized and the urgency of each project.

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See also: What Are Attributes With information about counterpart funds provided in this article , hope you have found the most useful knowledge for yourself. And if you are a business owner and want to participate in bidding for state-owned ODA projects, consider and consider whether you can manage and use this reciprocal capital. In addition, if you want to borrow money, you can refer to the article What documents do MBBank need to borrow? for more information.