Decree stipulates investor’s equity ratio in PPP projects

The decree stipulates the areas, conditions, sequence, and procedures concerning the implementation of investment under the form of PPP.

It regulates the investor’s equity and mobilized capital to implement the PPP investment projects.

Specifically, the investor(s) shall be responsible for contributing equity and mobilizing other legal capital sources to implement the project as agreed in the project contract.

The  investor’s  equity  ratio  must  not  be  lower  than  20%  of  the  total investment  capital, as for the project worth up to VND1.5 trillion (US$66 million). Regarding  the  project  with  a  total  investment  capital  of more  than  VND1.5 trillion,  the  equity  ratio  shall  be  determined  based on a principle as follows: 

For  the  capital  portion  of  up  to  VND1.5 trillion,  the  equity  ratio must not be lower than 20% of this portion;  

For the capital portion of more than VND1.5 trillion, the equity ratio must not be lower than 10% of this portion.  

The State investment capital in the PPP project shall not be counted as part of the total investment capital when identifying the equity ratio.  

As for the build-transfer (BT) contract, the investor must satisfy an additional requirement concerning equity (if any) in line with the laws on investment, construction, housing, and real estate business, and other relevant laws, in order to implement other projects.

By Vien Nhu