Legal News
Decree stipulates investor’s equity ratio in PPP projects

11 - 05 - 2018
VGP

The Government promulgated Decree No. 63/2018/ND-CP on investment in form of public-private partnership (PPP).

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.

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