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CONFORMED COPY 
 
LOAN NUMBER 7838-VN 
 
Loan Agreement 
 
(First Public Investment Reform Development Policy Loan) 
 
between 
 
SOCIALIST REPUBLIC OF VIETNAM 
 
and 
 
INTERNATIONAL BANK FOR RECONSTRUCTION 
AND DEVELOPMENT 
 
Dated December 30, 2009 
 
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LOAN AGREEMENT 
 
AGREEMENT dated December 30, 2009, entered into between SOCIALIST 
REPUBLIC OF VIETNAM (“Borrower”) and INTERNATIONAL BANK FOR 
RECONSTRUCTION AND DEVELOPMENT (“Bank”) for the purpose of providing 
financing in support of the Program (as defined in the Appendix to this Agreement).  The 
Bank has decided to provide this financing on the basis, inter alia, of: (a) the actions 
which the Borrower has already taken under the Program and which are described in 
Section I of Schedule 1 to this Agreement; and (b) the Borrower’s maintenance of an 
appropriate macroeconomic policy framework.  The Borrower and the Bank therefore 
hereby agree as follows: 
 
ARTICLE I 
—
GENERAL CONDITIONS; DEFINITIONS 
 
1.01. 
The General Conditions (as defined in the Appendix to this Agreement) 
constitute an integral part of this Agreement. 
 
1.02. 
Unless the context requires otherwise, the capitalized terms used in this 
Agreement have the meanings ascribed to them in the General Conditions or in 
the Appendix to this Agreement. 
 
ARTICLE II 
—
LOAN 
 
2.01. 
The Bank agrees to lend to the Borrower, on the terms and conditions set forth or 
referred to in this Agreement, the amount of five hundred million Dollars 
(USD$500,000,000), as such amount may be converted from time to time 
through a Currency Conversion in accordance with the provisions of Section 2.07 
of this Agreement (“Loan”). 
 
2.02. 
The Borrower may withdraw the proceeds of the Loan in support of the Program 
in accordance with Section II of Schedule 1 to this Agreement.
 
2.03. 
The Front-end Fee payable by the Borrower shall be equal to one quarter of one 
percent (0.25%) of the Loan amount.   
 
2.04.  
The interest payable by the Borrower for each Interest Period shall be at a rate 
equal to LIBOR for the Loan Currency plus the Variable Spread; provided, that 
upon a Conversion of all or any portion of the principal amount of the Loan, the 
interest payable by the Borrower during the Conversion Period on such amount 
shall be determined in accordance with the relevant provisions of Article IV of 
the General Conditions.  Notwithstanding the foregoing, if any amount of the 
Withdrawn Loan Balance remains unpaid when due and such non-payment 
continues for a period of thirty (30) days, then the interest payable by the 
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2
Borrower shall instead be calculated as provided in Section 3.02(d) of the 
General Conditions. 
2.05. 
The Payment Dates are June 15 and December 15 in each year. 
 
2.06. 
The principal amount of the Loan shall be repaid in accordance with the 
amortization schedule set forth in Schedule 2 to this Agreement. 
 
2.07. 
(a) 
The Borrower may at any time request any of the following Conversions 
of the terms of the Loan in order to facilitate prudent debt management: 
(i) a change of the Loan Currency of all or any portion of the principal 
amount of the Loan, withdrawn or unwithdrawn, to an Approved 
Currency; (ii) a change of the interest rate basis applicable to all or any 
portion of the principal amount of the Loan withdrawn and outstanding 
from a Variable Rate to a Fixed Rate, or vice versa; and (iii) the setting 
of limits on the Variable Rate applicable to all or any portion of the 
principal amount of the Loan withdrawn and outstanding by the 
establishment of an Interest Rate Cap or Interest Rate Collar on the 
Variable Rate. 
 
(b) 
Any conversion requested pursuant to paragraph (a) of this Section that 
is accepte
d
by
the Bank shall be considered a “Conversion”, as defined 
in the General Conditions, and shall be effected in accordance with the 
provisions of Article IV of the General Conditions and of the Conversion 
Guidelines.  
 
2.08. 
Without limitation upon the provisions of Section 5.08 of the General Conditions 
(renumbered as such pursuant to paragraph 4 of Section II of the Appendix to this 
Agreement and relating to 
Cooperation and Consultation
), the Borrower shall 
promptly furnish to the Bank such information relating to the provisions of this 
Article II as the Bank may, from time to time, reasonably request. 
 
ARTICLE III 
—
PROGRAM  
 
3.01. 
The Borrower declares its commitment to the Program and its implementation.  
To this end, and further to Section 5.08 of the General Conditions: 
 
(a) 
the Borrower and the Bank shall from time to time, at the request of 
either party, exchange views on the Borrower’s macroeconomic policy 
framework and the progress achieved in carrying out the Program; 
 
(b) 
prior to each such exchange of views, the Borrower shall furnish to the 
Bank for its review and comment a report on the progress achieved in 
carrying out the Program, in such detail as the Bank shall reasonably 
request; and 
 
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(c) 
without limitation upon the provisions of paragraphs (a) and (b) of this 
Section, the Borrower shall promptly inform the Bank of any situation 
that would have the effect of materially reversing the objectives of the 
Program or any action taken under the Program including any action 
specified in Section I of Schedule 1 to this Agreement. 
 
ARTICLE IV 
—
REMEDIES OF THE BANK 
 
4.01. 
The Additional Event of Suspension consist of the following, namely that a 
situation has arisen which shall make it improbable that the Program, or a 
significant part of it, will be carried out. 
 
ARTICLE V 
—
EFFECTIVENESS; TERMINATION
 
5.01. 
The Additional Condition of Effectiveness consist of the following, namely that 
the Bank is satisfied with the progress achieved by the Borrower in carrying out 
the Program,
 and that the Borrower’s macroeconomic policy framework is 
appropriate. 
 
5.02. 
The Effectiveness Deadline is the date ninety (90) days after the date of this 
Agreement. 
 
ARTICLE VI 
—
REPRESENTATIVE; ADDRESSES
 
6.01. 
The Borrower’s Representative is the Governor, or a Deputy Governor, of State 
Bank of Vietnam. 
6.02. 
The Borrower’s Address is: 
 
State Bank of Vietnam 
49 Lý Thái T
Hà N
i
Socialist Republic of Vietnam 
 
Cable: 
  Telex: 
  Facsimile: 
 
VIETBANK 
 
 412248 
  (84-4) 
3825 
0612 
Hanoi 
  NHTWVT 
 
6.03. 
The Bank’s Address is: 
 
International Bank for Reconstruction and Development 
1818 H Street, N.W. 
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4
Washington, D.C. 20433 
United States of America 
 
Cable 
address: 
 Telex: 
  Facsimile: 
 
INTBAFRAD  
248423(MCI) 
or 
1-202-477-6391 
Washington, D.C. 
 64145(MCI) 
 
AGREED at Hanoi, Socialist Republic of Vietnam, as of the day and year first 
above written. 
 
SOCIALIST REPUBLIC OF VIETNAM 
 
By: /s/ Nguyen Van Giau 
 
Authorized Representative 
 
INTERNATIONAL BANK FOR 
 
RECONSTRUCTION AND DEVELOPMENT 
 
By: /s/ Victoria Kwakwa 
 
Authorized Representative 
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SCHEDULE 1 
 
Program Actions; Availability of Loan Proceeds 
 
Section I. 
Actions under the Program
1. 
The Borrower has issued a law to allow a five-year period for FDI Enterprises to 
re-register under the Enterprise Law. 
 
The Borrower has issued a Decree to streamline provision of compensation to 
affected households, to align with market prices compensation for land and property, 
and to provide livelihood support.   
 
9. 
The Borrower has issued a Decree to establish a consistent monitoring and 
evaluation framework for public investment projects, including standardized 
monitoring tools. 
 
Section II. 
Availability of Loan Proceeds
A. General. 
 
The Borrower may withdraw the proceeds of the Loan in accordance 
with the provisions of this Section and such additional instructions as the Bank 
may specify by notice to the Borrower. 
 
2. 
The Borrower has issued a law to decentralize setting of cost estimates to 
Investment Owners; and has issued a Decree to align cost norms with the market. 
 
3. 
The Borrower has issued a law to clarify that late bids in procurement tenders for 
public investment projects shall be rejected. 
4. 
5. 
The Borrower, through MOF, has issued a Decision to align time of recording 
ODA funds in government accounts with the timing of actual receipts and 
expenditures.  
 
6. 
The Borrower, through, MOF  has issued a Circular to align  with the market cost 
norms applied to local consultants fees, translation fees, workshops and other 
costs related to  preparation and implementation of ODA-funded projects.  
 
7. 
The Borrower, through, MOC, has issued a Decision to clarify that project 
preparation costs set in percentage of total project cost are for reference only and 
are not budget caps. 
 
8. 
The Borrower has issued a Decree to harmonize terminology in documentation 
on pre-feasibility and feasibility studies across budget- and ODA-funded 
projects. 
 
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B. 
Allocation of Loan Amounts.
 
The Loan (except for amounts required to pay the 
Front-end Fee) is allocated in a single withdrawal tranche, from which the 
Borrower may make withdrawals of the Loan proceeds.  The allocation of the 
amounts of the Loan to this end is set out in the table below: 
 
Allocations 
Amount of the Loan 
Allocated 
(expressed in U.S. Dollars) 
 
(1) Single Withdrawal 
Tranche 
498,750,000 
(2) Front-end Fee 
 
1,250,000 
TOTAL AMOUNT 
500,000,000 
C. 
Withdrawal Tranche Release Conditions.
 
No withdrawal shall be made of the Single Withdrawal Tranche unless the Bank 
is satisfied: (a) with the Program being carried out by the Borrower; and (b) with 
the a
ppropriateness of the Borrower’s macroeconomic policy framework. 
 
D.   
Deposit of Loan Amounts.
 
1. 
The Borrower shall open, prior to furnishing to the Bank the first request for 
withdrawal from the Loan Account, and thereafter maintain a deposit account in 
Dollars (“Foreign Currency Deposit Account”) on terms and conditions 
satisfactory to the Bank. 
 
2. 
All withdrawals from the Loan Account shall be deposited by the Bank into the 
Foreign Currency Deposit Account.   Upon each deposit of an amount of the 
Loan into the Foreign Currency Deposit Account, the Borrower shall deposit an 
equivalent amount in Vietnamese Dong into its budget management system, in a 
manner acceptable to Bank.  
 
E. Audit.
 
Upon the Bank’s request, the Borrower shall: 
 
1. 
have the Foreign Currency Deposit Account audited by independent 
auditors acceptable to the Bank, in accordance with consistently applied 
auditing standards acceptable to the Bank; 
 
2. 
furnish to the Bank as soon as available, but in any case not later than 
four (4) months after the date of the Bank’s request for such audit, a 
certified copy of the report of such audit, of such scope and in such detail 
as the Bank shall reasonably request; and  
 
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3. 
furnish to the Bank such other information concerning the Foreign 
Currency Deposit Account and its audit as the Bank shall reasonably 
request. 
 
F. Excluded 
Expenditures
.
The Borrower undertakes that the proceeds of the 
Loan shall not be used to finance Excluded Expenditures.  If the Bank determines 
at any time that an amount of the Loan was used to make a payment for an 
Excluded Expenditure, the Borrower shall, promptly upon notice from the Bank, 
refund an amount equal to the amount of such payment to the Bank.  Amounts 
refunded to the Bank upon such request shall be cancelled.
 
G. 
Closing Date.  
The Closing Date is September 30, 2010. 
 
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SCHEDULE 2 
 
Amortization Schedule 
 
1. 
The following table sets forth the Principal Payment Dates of the Loan and the 
percentage of the total principal amount of the Loan payable on each Principal 
Payment Date (“Installment Share”).  If the proceeds of the Loan have been fully 
withdrawn as of the first Principal Payment Date, the principal amount of the 
Loan repayable by the Borrower on each Principal Payment Date shall be 
determined by the Bank by multiplying:  (a) Withdrawn Loan Balance as of the 
first Principal Payment Date; by (b) the Installment Share for each Principal 
Payment Date, such repayable amount to be adjusted, as necessary, to deduct any 
amounts referred to in paragraph 4 of this Schedule, to which a Currency 
Conversion applies. 
 
Principal Payment Date 
Installment Share 
(Expressed as a Percentage)
 
On each June 15 and December 15  
Beginning June 15, 2020 through  
June 15, 2034  
 
3.33% 
On December 15, 2034  
3.43% 
2.  
If the proceeds of the Loan have not been fully withdrawn as of the first Principal 
Payment Date, the principal amount of the Loan repayable by the Borrower on 
each Principal Payment Date shall be determined as follows: 
 
(a) 
To the extent that any proceeds of the Loan have been withdrawn as of 
the first Principal Payment Date, the Borrower shall repay the 
Withdrawn Loan Balance as of such date in accordance with paragraph 1 
of this Schedule. 
 
(b) 
Any amount withdrawn after the first Principal Payment Date shall be 
repaid on each Principal Payment Date falling after the date of such 
withdrawal in amounts determined by the Bank by multiplying the 
amount of each such withdrawal by a fraction, the numerator of which is 
the original Installment Share specified in the table in paragraph 1 of this 
Schedule for said Principal Payment Date (“Original Installment Share”) 
and the denominator of which is the sum of all remaining Original 
Installment Shares for Principal Payment Dates falling on or after such 
date, such amounts repayable to be adjusted, as necessary, to deduct any 
amounts referred to in paragraph 4 of this Schedule, to which a Currency 
Conversion applies. 
 
3. 
(a) 
Amounts of the Loan withdrawn within two (2) calendar months prior to 
any Principal Payment Date shall, for the purposes solely of calculating 
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the principal amounts payable on any Principal Payment Date, be treated 
as withdrawn and outstanding on the second Principal Payment Date 
following the date of withdrawal and shall be repayable on each 
Principal Payment Date commencing with the second Principal Payment 
Date following the date of withdrawal. 
 
(b) 
Notwithstanding the provisions of sub-paragraph (a) of this paragraph, if 
at any time the Bank adopts a due date billing system under which 
invoices are issued on or after the respective Principal Payment Date, the 
provisions of such sub-paragraph shall no longer apply to any 
withdrawals made after the adoption of such billing system.  
 
4. 
Notwithstanding the provisions of paragraphs 1 and 2 of this Schedule, upon a 
Currency Conversion of all or any portion of the Withdrawn Loan Balance to an 
Approved Currency, the amount so converted in the Approved Currency that is 
repayable on any Principal Payment Date occurring during the Conversion 
Period, shall be determined by the Bank by multiplying such amount in its 
currency of denomination immediately prior to the Conversion by either: (i) the 
exchange rate that reflects the amounts of principal in the Approved Currency 
payable by the Bank under the Currency Hedge Transaction relating to the 
Conversion; or (ii) if the Bank so determines in accordance with the Conversion 
Guidelines, the exchange rate component of the Screen Rate.  
 
5. 
If the Withdrawn Loan Balance is denominated in more than one Loan Currency, 
the provisions of this Schedule shall apply separately to the amount denominated 
in each Loan Currency, so as to produce a separate amortization schedule for 
each such amount. 
 
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APPENDIX 
 
Section I. Definitions 
 
1. 
“Circular” means a government regulation issued by a minister or the head of a 
ministerial level government agency and which is legally enforceable under the 
Borrower’s legal system. 
 
2. 
“Decree” means a government regulation issued by the government of the 
Borrower and signed by the Borrower’s Prime Minister and which is legally 
enforceable under the Borrower’s legal system. 
 
3. 
“Decision” means a government regulation issued by: (a) the Borrower’s Prime 
Minister and which is legally enforceable under the Borrower’s legal system; or 
(b) a minister or the head of a ministerial level government agency on a specific 
issue under the legal mandate of relevant government agency which is legally 
binding upon such agency.  
 
4. 
“Excluded Expenditure” means any expenditure: 
 
(a)  
for goods or services supplied under a contract which any national or 
international financing institution or agency other than the Bank or the 
Association has financed or agreed to finance, or which the Bank or the 
Association has financed or agreed to finance under another loan, credit, 
or grant; 
 
(b) 
for goods included in the following groups or sub-groups of the Standard 
International Trade Classification, Revision 3 (SITC, Rev.3), published 
by the United Nations in Statistical Papers, Series M, No. 34/Rev.3 
(1986) (the SITC), or any successor groups or subgroups under future 
revisions to the SITC, as designated by the Bank by notice to the 
Borrower: 
 
Group
Sub-group Description 
of 
Item 
112  
Alcoholic 
beverages 
121  
Tobacco, 
un-
manufactured, tobacco 
refuse 
122  
Tobacco, 
manufactured 
(whether or not containing 
tobacco substitutes) 
525 
 
Radioactive and associated 
materials 
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667 
 
Pearls, precious and 
semiprecious stones, 
unworked or worked 
718  
718.7 
 
Nuclear reactors, and parts 
thereof; fuel elements 
(cartridges), non-
irradiated, for nuclear 
reactors 
728 
728.43  
Tobacco processing 
machinery 
897  
897.3 
Jewelry of gold, silver or 
platinum group metals 
(except watches and watch 
cases) and goldsmiths’ or 
silversmiths’ wares 
(including set gems) 
971  
 
Gold, non-monetary 
(excluding gold ores and 
concentrates) 
(c) 
for goods intended for a military or paramilitary purpose or for luxury 
consumption; 
 
(d) 
for environmentally hazardous goods, the manufacture, use or import of 
which is prohibited under the laws of the Borrower or international 
agreements to which the Borrower is a party; 
 
(e) 
on account of any payment prohibited by a decision of the United 
Nations Security Council taken under Chapter VII of the Charter of the 
United Nations; and 
 
(f) 
with respect to which the Bank determines that corrupt, fraudulent, 
collusive or coercive practices were engaged in by representatives of the 
Borrower or other recipient of the Loan proceeds, without the Borrower 
(or other such recipient) having taken timely and appropriate action 
satisfactory to the Bank to address such practices when they occur. 
 
5. 
“Enterprise Law” means the Borrower’s Enterprise Law of 2005, as amended 
from time, which governs the establishment and operation of enterprises.  
 
6. 
“FDI Enterprises” means foreign enterprises established by foreign investors to 
invest in the Borrower’s territory and which are registered as such under the 
Borrower’s Enterprise Law of 2005.   
 
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7. 
“Foreign Currency Deposit Account” means the account referred to in Part D. 1 
of Section II of Schedule 1 to this Agreement. 
 
8. 
“General Conditions” means the “International Bank for Reconstruction and 
Development General Conditions for Loans”, dated July 1, 2005 (as amended 
through February 12, 2008) with the modifications set forth in Section II of this 
Appendix. 
 
9. 
“Investment Owner” means a government institution assigned by a government 
ministry or agency to take responsibility for direct management and 
implementation of an investment project. 
 
10. 
“MOC” means the Borrower’s Ministry of Construction or any successor thereto.  
 
11. 
“MOF” means the Borrower’s Ministry of Finance or any successor thereto. 
 
12. 
“ODA” means official development assistance which refers to development 
cooperation activities between the Borrower and foreign donors. 
 
13. 
“Program” means the program of actions, objectives and policies designed to 
strengthen the selection, preparation, implementation and supervision of public 
investment projects and set forth or referred to in the letter dated November 20, 
2009 from the Borrower to the Bank declaring the Borrower’s commitment to the 
execution of the Program, and requesting assistance from the Bank in support of 
the Program during its execution. 
 
14. 
“Single Withdrawal Tranche” means the amount of the Loan allocated to the 
category entitled “Single Withdrawal Tranche” in the table set forth in Part B of 
Section II of Schedule 1 to this Agreement. 
 
15. 
“Vietnamese Dong” means the official currency of the Borrower. 
 
Section II.  Modifications to the General Conditions 
 
The modifications to the General Conditions are as follows:   
1. 
The last sentence of paragraph (a) of Section 2.03 (relating to Applications for 
Withdrawal) is deleted in its entirety. 
2. 
Sections 2.04 (
Designated Accounts)
 and 2.05 (
Eligible Expenditures
)
are deleted 
in their entirety, and the remaining Sections in Article II are renumbered 
accordingly. 
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3. 
Paragraph (a) of Section 2.05 (renumbered as such pursuant to paragraph 2 
above) is modified to read as follows:  
 
“Section 2.05. 
Refinancing Preparation Advance; Capitalizing Front-end Fee 
and Interest 
 
(a) 
If the Loan Agreement provides for the repayment out of the 
proceeds of the Loan of an advance made by the
 
Bank or the Association 
(“Preparation Advance”), the Bank shall, on behalf of such Loan Party, withdraw 
from the Loan Account on or after the Effective Date the amount required to 
repay the withdrawn and outstanding balance of the advance as at the date of 
such withdrawal from the Loan Account and to pay all accrued and
 
unpaid 
charges, if any,
 
on
the advance as at such date.  The Bank shall pay the amount 
so withdrawn to itself or the Association, as the case may be, and shall cancel the 
remaining unwithdrawn amount of the advance.” 
4. 
Sections 5.01 (
Project Execution Generally
), and 5.09 (
Financial Management; 
Financial Statements; Audits
)
are deleted in their entirety, and the remaining 
Sections in Article V are renumbered accordingly. 
5. 
Paragraph (a) of Section 5.05 (renumbered as such pursuant to paragraph 4 above 
and relating to 
Use of Goods, Works and Services
)
is deleted in its entirety. 
 
6. 
Paragraph (c) of Section 5.06 (renumbered as such pursuant to paragraph 4 
above) is modified to read as follows: 
 
“Section 5.06. 
Plans; Documents; Records 
 
…
(c) 
The Borrower shall retain all records (contracts, orders, 
invoices, bills, receipts and other documents) evidencing expenditures 
under the Loan until two years after the Closing Date. The Borrower 
shall enable the Bank’s representatives to examine such records.” 
 
7. 
Paragraph (c) of Section 5.07 (renumbered as such pursuant to paragraph 4 
above) is modified to read as follows: 
 
Section 5.07. 
Program Monitoring and Evaluation 
 
…
(c)  
The Borrower shall prepare, or cause to be prepared, and 
furnish to the Bank not later than six months after the Closing Date, a 
report of such scope and in such detail as the Bank shall reasonably 
request, on the execution of the Program, the performance by the Loan 
Parties and the Bank of their respective obligations under the Legal 
Agreements and the accomplishment of the purposes of the Loan. 
 
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8. 
The following terms and definitions set forth in the Appendix are modified or 
deleted as follows, and the following new terms and definitions are added in 
alphabetical order to the Appendix as follows, with the terms being renumbered 
accordingly:
 
(a) 
The definition of the term “Conversion Date” is modified to read as 
follows: 
 
“‘Conversion Date’ means, in respect of a Conversion, the Execution 
Date (as herein defined) or such other date as requested by the Borrower 
and accepted by the Bank, on which the Conversion enters into effect, 
and as further specified in the Conversion Guidelines.” 
 
(b) 
The definition of the term “Eligible Expenditure” is modified to read as 
follows:   
 
“‘Eligible Expenditure’ means any use to which the Loan is put in 
support of the Program, other than to finance expenditures excluded 
pursuant to the Loan Agreement.” 
 
(c) 
The term “Financial Statements” and its definition are deleted in their 
entirety. 
 
(d) 
The term “Project” is modified to read “Program” and its definition is 
modified to read as follows (and all references to “Project” throughout 
these General Conditions are deemed to be references to “Program”):  
 
“‘Program’ means the program referred to in the Loan Agreement in 
support of which the Loan is made.”