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Italian Development Co-operation in Vietnam

 
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Organisation and legislative basis

 

The Official Development Assistance (ODA) activities of the Italian Government are regulated by Law N.49, dated 26 February 1987, and by its operational procedures defined by the Presidential decree N.177, dated 12 April 1988 and following decrees.

The Italian Development Co-operation activities, aiming at strengthening friendship among people and protecting human rights, are an integral part of the Italian Foreign Affairs policy and are financed by grants and soft loans.

Within the Ministry of Foreign Affairs, the Directorate General for Development Co-operation (DGCS) is the central agency responsible for the implementation of the Italian ODA activities. The Central Technical Unit, which is the body of the DGCS, carries out all the technical activities involved in the ODA implementation assisted by its local representative offices (UTL, Local Technical Unit).

Development Co-operation Agreements

The two protocols signed in 1990 and 1992 between the Government of the Italian Republic and the Government of the Socialist Republic of Viet Nam have been contributing to reach two main objectives of the Italian Bilateral Assistance, i.e. contribution to poverty alleviation and assistance in developing the export oriented industrial sector.

In 1997, a Memorandum of Understanding concerning the implementation of the Italian Co-operation Program was signed in Rome. The Memorandum defines a soft loan package of 100 Billion Lit (currently, around 55 Million USD) with very favourable repayment terms and conditions (since January 1999, the following new conditions have been fixed: 40 years repayment period, 27 years of grace and 0.25% annual fixed interest rate).

Scope of the Italian Development Co-operation in Vietnam

The main trust of the Italian Development Co-operation in Vietnam is provided by the activities carried out within the Bilateral Agreement. In addition and outside the financial scope of the Bilateral Program, the Italian Development Co-operation finances projects and programs through Multilateral Organisations, NGOs, and Scholarship.

Italian Development Co-operation Program in Vietnam, Current Situation

The Italian Development Co-operation Program follows three main criteria:

  • Geographical concentration;

  • Sectorial focus;

  • Co-financing or parallel financing within International Organisation Projects.

 The Memorandum is currently under implementation with the identification and financing with soft loans of projects in the following sectors:

  • Infrastructure;

  • Health and Sanitation;

  • Disaster Preparedness;

  • Education and Training;

  • Industry.

 The financing mode allowed by the Memorandum is a tied aid. The soft loans shall be dedicated only to those project’s components for which procurement of good and services can and will be done in Italy through a competitive bidding procedure restricted to Italian companies for goods and services of Italian origin only. Bidding procedures will carried out in accordance with the Vietnamese law.

 

In addition, besides the soft loans, within the bilateral activities, grants are available for projects executed or promoted by Non Governmental Organisations, emergency aid and scholarships.

Ongoing activities

A)    Bilateral programs

1. Projects financed through grants at 100%

 

 

Project Title

Executed Project

 

1

 

 

·         Extension of the mother and child protection in Ha Bac, project executed by the NGO GVC (1,434 billion LIT)

2. Projects co-financed through grants at 50%

 

 

Project Title

Promoted Project

2

·         Creation and development of a vocational professional institute in Hanoi to assist young vietnamese (3.15 Billion LIT, Ministry of Foreign Affairs contribution: 1.50 million). Project promoted by ONG ELIS;

·         Micro-financing support project aiming at promoting and strengthening nutritional skill and income generating activities by women, project promoted by the NGO GVC (1.15 Billion LIT, MAE, contribution 835 million LIT).

 3. Emergency Projects

 

 

Project Title

Projects directly managed

 

2

 

 

·         IMEO-Italian Medical Equipment Operation, Italian Medical Equipment Operation (IMEO), project directly managed by the Italian Co-operation (270,000 USD);

·         Food Aid 1998, food aid program and utilisation of the related funds for mini-projects (1 billion LIT);

·         Food Aid 1999, emergency Food Aid to assist the flood victims of the provinces of Thua Thien Hue and Quang Tri, who were hardly-effected by the last November floods (1 billion LIT).

 

4. Projects financed with Soft Loans

The Protocol that has been signed in May 1997 foresees the allocation of 100 Billion Lira through Soft Loans. 28 billion have been already committed for 4 projects approved during 1999 and 72 still have to be assigned to the projects proposed for financing and at different stage of appraisal.

a) Industry: agro-industry and Textile

Industrial Projects proposed for financing by the Vietnamese Ministry of Planning and Investments

 

 

Project Title

Projects proposed for financing

 

 

 

 

 

 

 

2

Agro-industry Sector

·         1) Packaging Production Line, Hanoi;

·         2) Plastic Pipes Production Line, Haiphong;

·         3) Agricultural products processing plant, Bac Giang;

Textile Sector

·         4) Investment in providing equipment for Fibre Factory of Gia Dinh Textile Company;

·         5) In-depth investment for the equipment of Nam Dinh Silk Company to strengthen its production capacity;

·         6)Building an affiliated suit production factory for the Garment Company’ Garco N.10.

 b) Health Sector

 

 

Project Title

Projects approved

(Steering Committee November 1999)

 

1

·         Health projects for the Provincial Hospitals of Ninh Binh, Phu Tho, Da Nang, Can Tho Provinces, joined together under a common “umbrella” project; named “ Investment on facilities and medical equipment for four hospitals in Phu Tho, Ninh Binh, Da Nang and Can Tho” (12 billion LIT);

Project proposed for financing

1

·         Hanoi Intracardiac Surgery hospital (11 billion LIT).

 c) Natural Disasters

 

 

Project Title

Project approved

(Steering Committee November 1999)

 

1

·         Strengthening the national flood forecasting and warning system, phase I (5 billion LIT).

d) Water Management

 

 

Project Title

Projects approved

 

(Steering Committee July 1999)

 

  (Steering Committee November 1999) 

2

 

 

·         Ugrading and expanding the Quang Ngai water distribution system (4.5 billions LIT); 

 ·         Upgrading and expanding the water distribution system of Ca Mau Provinces (6.5 Billions LIT).

Project proposed for financing

1

·         Upgrading and Expanding the Melinh water Supply in Vinh Phuc Province.

  e) Education

 

 

Project Title

Projects proposed for financing

2

·         Investment in providing equipment for main laboratories of Hanoi Poli-University;

·         Investment in providing equipment for the Automation and Soil Science Laboratory of Thai Nguyen University.

 B) Multilateral Projects financed through grants

 

 

Project Title

Executed by FAO

1

Strengthening National Food Security Information System (1,5 million USD).

 

 

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