The IBRD Flexible Loan (IFL) is the leading loan product of the World Bank for public sector borrowers of middle-income countries. Eligible borrowers work with their World Bank country office to obtain financing for development through Investment Project Financing, Development Policy Financing, Program-for-Results, or any combination of those by a Multiphase Programmatic Approach, and use the IFL as their loan product.
- Long maturities – up to 35 years
- Market-based interest rates reflecting IBRD's AAA credit rating
- Flexibility to tailor repayment terms
- Embedded tools to manage currency or interest rate risk over the life of the loan
What are the maturities in IFL?
IFL's maximum final maturity is 35 years, including the grace period. The maximum weighted average maturity or average repayment maturity (ARM) is 20 years.
What is the cost of IFL?
The cost of the IFL reflects IBRD's AAA credit rating and is stable and transparent. Components of the pricing include the interest rate, front-end fee, and commitment fee.
The interest rate consists of a market-based variable reference rate and a spread (variable or fixed). A one-time front-end fee of 0.25% is charged on the committed loan amount, and a commitment fee of 0.25% per annum paid semi-annually is charged on the undisbursed balances, which begins to accrue sixty days after the loan agreement is signed. Countries are classified into four pricing groups based on income and other factors. Please refer to the IBRD Flexible Loan Pricing Basics product note for information on IBRD USD, EUR, JPY, and GBP lending rates and charges or consult our Lending Rates & Fees.
How does the IFL help borrowers customize the repayment terms?
The IBRD Flexible Loan (IFL) allows borrowers to customize repayment terms (i.e., grace period, repayment period, and amortization profile) to meet debt management or project needs. For example, if the objective is to reduce the overall refinancing risk of the debt portfolio, a borrower may choose repayment terms that smooth out the debt service profile. This flexibility can also be used in investment operations to match repayment terms to a project's expected cash flows. Borrowers can find the most up-to-date information on IBRD Flexible Loan in the Major Terms and Conditions product note.
How does the IFL help manage financial risk?
The IFL includes conversion options to manage currency and/or interest rate risks over the life of the loan. These options are embedded in the loan agreement and can be executed at a borrower's request at any time. In line with their debt management strategy requirements or changing market conditions, IFL borrowers have the option to change from a floating to a fixed interest rate or vice versa. The IFL also offers the flexibility of using interest rate caps or collars to manage interest rate volatility. Similarly, IFL provides a currency conversion option for hard currencies as well as specific local currencies.
How to select the financial terms for your IFL? - Loan Choice Worksheet (LCW)
To prepare for the IFL, World Bank project manager, the World Bank country office, and the borrower's representative in charge of selecting financial terms, review the preparatory package to choose the suitable financial terms. The package consists of the Loan Choice Worksheet (LCW), instructions for the LCW, and an informational letter to the borrower with a more detailed explanation of the options available. The worksheet serves as the basis for the preparation of the applicable draft legal documentation.
You can tailor the repayment schedule of IBRD loans to meet specific project or portfolio needs. Determine if the customized schedule falls within IBRD maturity limits (20 years average repayment maturity and 35 years final maturity) using the Amortization Schedule Analyzer (ASA) available through Client Connection.