The Government has issued a new decree on the management and use of official development assistance (ODA) and concessional foreign loans.

Taking effect on September 10, 2025, the Decree No. 242/2025/ND-CP sets out four forms of ODA and concessional loan provision: programs; projects; non-project assistance; and budgetary support.

In particular, non-refundable ODA capital will be prioritized for implementing socio-economic infrastructure development projects, enhancing capacity, preventing and mitigating natural disasters and epidemics, responding to climate change, promoting green growth, as well as in the fields of science, technology, innovation, digital transformation, and social security. In addition, this capital source can also be used to prepare investment projects or co-finance projects using concessional loans, in order to increase the concessionality of the loan. Meanwhile, ODA loans will focus on programs and projects in the fields of health, education, vocational training, climate change adaptation, environmental protection, and essential economic infrastructure that are not directly revenue-generating. Concessional loans are prioritized for programs and projects with lending capacity or projects under the state budget expenditure tasks in the field of socio-economic infrastructure.

The decree also clearly stipulates the principles of state management, in which ODA capital and concessional loans are only used for development investment expenditures and not for recurrent expenditures. At the same time, the Government uniformly manages ODA capital and concessional loans based on the principle of ensuring efficient use of capital and debt repayment capacity.

A notable new point is that the private sector can also access and use ODA capital and concessional loans through mechanisms such as state capital participation in PPP projects, participation in the implementation of programs and projects supporting the private sector, or being assigned to perform public investment tasks in accordance with the Law on Public Investment.