IBRD Flexible Loan
The IBRD Flexible Loan (IFL) provides borrowers with flexibility in managing their financial risks as their needs change over the life of the loan through embedded currency and interest rate conversion options, as well as a wide choice of amortization patterns and repayment schedules. The IFL carries a variable lending rate that consists of 6-month LIBOR plus a spread that can either be fixed over the life of the loan or remain variable. Over the life of the loan clients have the flexibility to:
- Change the loan currency on disbursed and undisbursed amounts;
- Fix the interest rate on disbursed amounts;
- Unfix or re-fix the interest rate on disbursed amounts;
- Cap or collar the interest rate on disbursed amounts.
Borrowers also have flexibility during project preparation to custom-tailor IFL repayment terms (i.e., grace period, repayment period, and amortization structure) within existing financial policy limits. Once agreed, repayment terms may not be changed. In addition, all borrowers benefit from the extended limit on average repayment maturity up to 18 years and the extended limit on the final maturity up to 30 years for new loans.
IBRD Contingent Loans
The Deferred Drawdown Option (DDO) is a contingent loan product designed to provide immediate liquidity in case of adverse events such as a natural catastrophe, a downturn in economic growth, or adverse changes in commodity prices or terms of trade. The DDO allows a borrower to postpone drawing down a Development Policy Loan (DPL) for a defined drawdown period after the Loan Agreement has been declared effective. The IBRD offers two versions of the DDO product.
Development Policy Loan Deferred Drawdown Option (DPL DDO): The purpose of the DPL DDO is to provide a source of liquidity for member countries, granting access to long-term IBRD resources to maintain ongoing structural programs if a financing need materializes. It also provides a formal basis for continued policy-based engagement with the Bank when the borrower has no need for immediate funding, but values the Bank’s advice and access to immediate liquidity whenever deemed necessary.
Catastrophic Risk Deferred Drawdown Option (CAT DDO): The CAT DDO’s main purpose is to develop and/or enhance the capacity of borrowers to manage natural disaster risk, and to provide a source of immediate liquidity that could serve as a source of bridge financing while other sources (e.g. concessional funding, bilateral aid, or reconstruction loans) are being mobilized following a natural disaster. The presence of a hazard risk management program is a prerequisite.
Lending Rates for the IBRD Flexible Loan (IFL)
Currency |
Variable Spread Option/ |
Fixed Spread Option |
USD |
LIBOR - 0.02% |
LIBOR + 0.05% |
EUR |
LIBOR - 0.02% |
LIBOR +0.07% |
JPY |
LIBOR - 0.02% |
LIBOR +0.07% |
Front-end Fee |
+0.25 |
+0.25 |
Please contact us for more information on loan preparation and support.
