CIRCULAR Guide made the financial appraisal of the project, lending programs from the source of the Government's foreign loans _ _ _ _ _ _ _ _ _ _ _ Public debt management pursuant to the law No. 29/2009/QH12 17/6/2009;
Pursuant to the law No. 49 public investment/2014/QH13 on 18/6/2014;
Pursuant to Decree No. 78/2010/ND-CP dated 14/7/2010 of the Government loans back foreign capital of Government;
Pursuant to Decree No. 79/2010/ND-CP dated 14/7/2010 of the Government on public debt management services;
Pursuant to Decree No. 16/2016/ND-CP dated 16/3/2016 of the Government on the management and use of which official development assistance (ODA) and preferential loans of foreign donors;
Pursuant to Decree No. 215/2013/NĐ-CP on December 23, 2013 of government functions, tasks, powers and organizational structure of the Ministry of finance;
According to the proposal of the Director General of debt management and financial affairs, the Minister of Finance issued a circular guiding the financial appraisal of the implementation of the program, project lending from foreign loan capital from the Government.
 
Chapter I GENERAL PROVISIONS article 1. Scope 1. This circular regulates financial evaluation for: a) due diligence when deciding the investment program, project lending in whole or in part from the Government's foreign loans;
b) loan appraisal back foreign government loans for businesses.
2. The programs, investment projects according to the method of lending institutions suffered the entire implementing risk assessment and loan provisions of credit financial institutions, consistent with the provisions of the law and not under the scope of this circular.
3. The evaluation of source lending foreign government loans for provincial peoples Committee made under the provisions of the law on local government lending.
Article 2. The object to apply the object application this circular includes the investment decision, the Ministry of finance, Agency for loans, the borrower and the organizations and individuals related to the evaluation of the financial program, project loans from the foreign capital of the Government in the scope of this circular. 
Article 3. Explanation of terms the terms used in this circular shall be construed consistent with the wording of the public debt management Law No. 29/2008/QH12 on 17/6/2009, Decree No. 78/2010/ND-CP dated 14/7/2010 of the Government loans back foreign capital of the Government (hereafter referred to as Decree No. 78/2010/ND-CP) and Decree No. 16/2016/ND-CP dated 16/3/ 2016 of the Government on the management and use of which official development assistance (ODA) and preferential loans of foreign donors (hereafter called the decree number 16/2016/ND-CP). The other words are interpreted as follows: 1. The ratio of benefits on the project's cost (B/C) is the ratio of the present value of the stream of benefits and the present value of the cost lines are defined in the project lifecycle.
2. net present value (NPV) is the value of the entire net cash flow of the project in the future discounting of present time.
3. The rate of internal financial (IRR) is the rate of discount that with this rate of net present value of the project by 0 (zero).
4. Calculation of the financial indicators referred to in paragraph 1, 2 and 3 of this guidance in annex 1 and 2 attached to this circular.
Article 4. Valuation principles 1. The evaluation must ensure objectivity, transparency and caution.
2. The Agency is responsible for investment decisions about the evaluation results, the investment project decisions under the provisions of the law.
3. The borrower again responsible before the law for the accuracy, valid, logical, true law of data, information, parameters, the input data provided to the Agency for the evaluation of calculation methods of finance, loan repayment approach of the project and the financial capacity of the borrower.
4. With respect to the program or project to apply the method of lending agencies suffered a partial credit risk, the financial appraisal made under the provisions of this circular and the lending agency's regulations.
5. The financial appraisal for investment decision made under the provisions of Decree No. 16/2016/ND-CP, this circular and related laws.
6. The evaluation to financial re-lend the foreign government loan made under the provisions of article 19 of Decree 78/2010/ND-CP, this circular and related laws.
Article 5. Evaluation methodology 1. When evaluating the financial plan of the project loan, determining the rate of discount of the project (r), the ratio of benefits on the project's cost (B/C), net present value (NPV) and internal capital recovery rate (IRR) follow the instructions in Appendix 1 of this circular.
2. When assessing the financial capacity of the borrower, the determination of the financial indicators follow the instructions in Appendix 2 of this circular.
 
Chapter II article 6 ASSESSMENT CONTENT. Evaluation of the condition to be lent back to the 1. Appraisal to meet loan terms and regulations, including the financial conditions and ensuring the conditions of the order and procedure as prescribed by law; the borrower must ensure the financial capacity, ensure equity ratio as defined, have effective business shows pay debt, make regulations on secured loan.
2. Conditions of the loan back to the borrower back to apply under the provisions of the law on management of public debt.
Article 7. Evaluation of the borrower's financial capability back 1. Evaluation of the borrower's financial capability through the evaluation of the financial statements have been audited by 3 years continuous nearest implementation evaluation of the borrower's financial capability.
2. in case the borrower again not sufficient 3 years of operation, they must have the written commitment of the representative of the owner, the owner's or the parent company about the guarantee of repayment of the loan in case changes have difficulty in repaying. The absence of this guarantee, the borrower must have a guarantor responsible for repayment of a commercial bank or other secured form was again lending Agency verification of feasibility and compliance under current law.
Article 8. Appraisal schemes for loans and the repayment ability of the borrower back 1. The evaluation methodology used the loan, including the ability to layout and recovery of capital investment of the project, which clearly define: a) investment capital (including equity, capital link, a joint venture project, which are the budget level, loans and other capital as provided by the law);
b) project cost;
c) investment layout capabilities, the ability to generate revenue, cash flow of the project.
2. Evaluation criteria the financial options evaluation methodology the evaluation referred to in article 5 of this circular.
3. determining the ability to pay of the debt repayment schedule of the loan, a deficiency in the flow of money to pay the debt (if any), propose to offset deficits.
Article 9. Property assessment loan guarantee of the loan back to the evaluation of the secured property loans back to assess its compliance with rules on collateral loans in Decree No. 78/2010/ND-CP and circular No. 139/2015/TT-BTC dated 3/9/2015 of the Ministry of finance instructed the loan guarantee for the loans back foreign government loans.
Article 10. Reviews, reviews the elements non financial reviews, reviews of non-financial factors include: 1. the business sector; qualifications, competence and experience of the Board of Directors; borrower's governance model.
2. economic relations, finance, loans and the repayment of the loan back with your customers, clients and the lending institution.
  Article 11. Risk assessment and risk mitigation solutions

  The loan agencies back to the comments about the risk and reviews the effectiveness of the project according to the risk; reviews solutions minimize risk by lending proposals.
 
Chapter III PROCEDURES and APPRAISAL RECORDS article 12. Appraisal at the Agency decided to invest 1. When establishing the report proposes investment undertakings or feasibility research report of the program, projects using foreign capital in an applicable government lending mechanisms, the Agency proposed investment decisions on the borrower and the lender back the method proposed by one of the following methods a. lenders back under the method of lending institutions do not bear the credit risk.
b. the loan back by the method of lending institutions suffered credit risks in part or whole.
        c. financial institutions, credit loans under the program, the credit limit.
2. When the evaluation documents program, projects using foreign government loans, the Agency decided to invest the Organization the evaluation methods of project finance lending, lending conditions to meet the borrower under the current rules and regulations of this circular.
a. the content of the financial assessment made under the provisions of chapter II of this circular.
b. to cater for the financial evaluation, project owners submit key documents referred to in paragraph 1 article 13 this circular (minus c).
c. time appraisal made under the provisions of article 30 of Decree 16/2016/ND-CP. 3. Cost of staff appraisal a. staff expenditure appraisal investment decisions at the Agency are paid from the funds of the Agency for investment decisions.  
b. the content and the level of expenses evaluation made under current rules.
c. The estimating, estimation and Executive funding settlement to serve the evaluation in accordance with the provisions of the law on the State budget.
Article 13. Appraised at lending institutions back 1. Evaluation profile catalogue the borrower again sends text to the lending institutions are the Ministry of finance authorized in accordance with paragraph 1 article 16 proposed loan appraisal back attached to records appraisal, the Ministry of finance. Back to the borrower is responsible for the accuracy, logical, valid, proper law of the records provided to perform appraisal for lending; parameters, metrics, norms, unit price, technical economic forecasts of revenue, output as well as the other data presented in the project documents.
The records include: a. the text of the Prime Minister for permission to use foreign government loans.
b. documents program, project.
c. approval of investment decision-making authority.
d. financial report audited by 3rd consecutive year closest to make appraisal of the financial capacity of the borrower (for business/economic organizations are active); case the borrower again not sufficient 3 years of operation, they must have the written commitment of the representative of the owner, the owner's or the parent company about the guarantee of repayment of the loan in case changes have difficulty in repaying. The absence of this guarantee, the borrower again sends guarantee repayment responsibilities of a commercial bank or the documents proving the other assurance approach to key the test of feasibility and compliance under current law.
Case the borrower's parent company, the financial statements include the financial statements of the parent company and consolidated financial statements of the Group companies. The case of the independent accounting firm for loans with the guarantee the repayment obligation of the parent company, the financial statements include the financial statements of subsidiaries, financial statements of the parent company and consolidated financial statements of the Group companies.
Sync report on the borrower's credit relationship with lending institutions to the point closest to the time of the financial evaluation; lists the borrower credit contracts signed again, and the implementation of the loan, the repayment for the credit contract; the terms of the guarantee, the guarantee to a third party.
e. records on secured loan under the provisions of Decree No. 163/2006/ND-CP on December 29, 2006 by the Government on the secured transaction and Decree No. 11/2012/ND-CP on 22/02/2012 on the revision, addition of some articles of Decree No. 163/2006/ND-CP g. financial approach based on the basis of reference conditions for the loan under a decree No. 78/2010/ND-CP and the writing guidelines for lending under the law on public debt management.
2. The duration and content of the appraisal in the lending agency back to a. term of evaluation-the borrower has the responsibility for filing under the provisions for lending agencies again to verify. Case of need for additional records, lending institutions have written notice to borrower. Within 7 days of receipt of the notification, the borrower has the additional responsibility of records as prescribed.
-In case of need, to check the computer certainly, practicability of the assumptions used in calculating the financial performance of the project, lending institutions can suggest additional documentation to confirm the basis of given assumptions or ask for the opinion of the relevant management bodies.
-Within 30 working days from the date of receipt of a valid application of the borrower, loan agencies back to make appraisal and evaluation results report for the Ministry of finance.
b. the content of the evaluation report the evaluation results need to clarify the following:-evaluation of the satisfies the conditions used foreign capital under the Government's lending mechanism under the provisions of the law.
-Reviews the financial capacity of the borrower.
-Reviews of the financial plan of the project using the loan back by the borrower back up, the basis of given assumptions about revenues, costs, terms of lending projects.
-Evaluation of alternative use of the secured property by the borrower again.
-Assess the risk level of the project loan, the borrower's repayment ability under the basic risk approach; proposed preventive measures risk.-commenting about the possibility of repayment (or does not pay the debt) of the project, the borrower; and the conditions of the loan back to the borrower under current rules.
Article 14. Assessment at the Ministry of finance 1. After receiving the report the evaluation results by sending back the lending institutions, the Ministry of finance to consider the following: a. consider the suitability of the profile assessment, evaluation methods and processes applied in lending institutions.
b. consider the direction handles these differences of opinion, the assessment of the ability to repay the loan and the loan Agency.
c. evaluation of results the evaluation of the lending institutions, which include:-reviews of appraisal conclusions of the lending institutions; the conclusion of loan agencies back to the financial plan of the programme, project and financial capabilities of other project owners with reviews of the governing body, the Ministry of finance please leave comments the governing body to decide under the authority or the Prime Minister reports to review the decision.
-Recommendations of the lender or lenders; the solution to prevent the risk of lending.
d. considering the recommendations of the borrower, loan agencies back on solutions to ensure the necessary support from the borrower or a third party in the event of the lack of temporary repayment sources.
2. On the basis of the results of the evaluation report assessment of lending institutions, the Finance Ministry and the Prime Minister, or the decision by the authority for the loan again for programs, projects and lending conditions notice to the borrower and lending again.

3. In case there are different opinions among agencies, to have testimonials of support to the Ministry of finance in determining loan approval, the Finance Ministry can consult independent organizations, individuals with the expertise to assess the results of due diligence review lending institutions for the financial plan of the project and the financial capacity of the the borrower again. Organizations, independent experts, responsible for his comments.
4. Cost of staff assessment, valuating a. administrative costs to organizations, independent experts in the Ministry of finance to be paid from the funds of the Ministry of finance often genera or source for lending and guarantee fees by the excerpts of finance currency according to the regulations.
b. annual, chaired the working unit again establishment loan cost estimation for the assessment referred to in this Article sent to the Finance Ministry and approval of estimation often genera of the Ministry of finance. The estimating, estimation and settlement Executive under the provisions of the law on the State budget.
 
Chapter IV RESPONSIBILITY of the AGENCY in RELATION to article 15. The responsibilities of the Agency decided to invest 1. The Agency decided to organize the investment appraisal, investment decisions, including the evaluation of the financial plan of the project loan, the borrower's financial capability back as stipulated in Decree No. 16/2016/ND-CP, the current rules and regulations of this circular.
2. The Agency is responsible for investment decisions about the evaluation results, the decision of investment projects, the efficiency of investment projects, including financial evaluation under the provisions of the law.
Article 16. The responsibility of the Ministry of finance 1. Informed investment decisions for the Agency and the borrower back on lending institutions are the Ministry of finance authorized the loan project.
2. On the basis of the investment decisions of competent bodies and consider the results of the evaluation of the lending institutions, the Finance Ministry and the Prime Minister, or the decision by the authority for the loan again for programs and projects.
Article 17. Responsibilities of lending institutions authorized by the Ministry of finance 1. Implement the evaluation methods of project finance lending and financial capacity of the borrowers under the provisions of Decree No. 78/2010/ND-CP and the provisions of this circular.
2. evaluation results report for the Ministry of finance.
3. clear recommendations for the loan or not lending back to the project, responsible for the results of the evaluation.
Article 18. The liability of the borrower lending again is responsible for the accuracy, logical, valid, proper legislation on data, information, parameters, the input data provided to the investment decision, the Ministry of finance and lending institutions catering for the calculation of the financial approach loan repayment schemes, of the project and the financial capacity of the borrower.
Chapter V IMPLEMENTATION article 19. Effect 1. This circular effect since 20/7/2016.
2. In the process of implementation, if the legal texts are references to apply this circular was modified, supplemented or replaced by a new text will apply according to the new text.
3. in the implementation process, if there are obstacles and suggest the Agency, relevant units reflect promptly for the Finance Ministry to study the resolution./.