Pursuant to the provisions of the Agreement Establishing the Inter-American Development Bank, Article III, "Operations", the Bank may make loans or provide loan guarantees to any member country, any political subdivision or government organization unit thereof, any independent agency, semipublic enterprise, or private enterprise in the territory of a member country, regional organizations composed of member countries, and to the Caribbean Development Bank.
The political subdivisions of a country include states, provinces, and municipalities, and decentralized government organizations such as State banks, development corporations, public utility companies, universities, and the like, that are legally empowered to enter into loan contracts with the Bank. Any company in which the government has a proprietary interest of more than 50% is considered to be a public sector company.
The Bank may make loans to private enterprises, whatever their form of organization, provided they have the legal capacity to enter into loan contracts with the Bank. Among the private undertakings that may be eligible to become borrowers from the Bank are corporations, other commercial companies, cooperatives, foundations, and the like.
The following is a list of minimum general criteria for deciding whether an entity is eligible to borrow directly from the Bank or whether it may only act as executing agency with the principal and general liability to be assumed by the respective member country.
1. Member countries that assume liability on their own general responsibility, as well as their political subdivisions, such as states, provinces, municipalities, and the like, which require a member-country guarantee before a loan proposal may be submitted to the Board of Executive Directors for consideration, must demonstrate that they meet the following requirements:
2. In addition to the requisites mentioned above, political subdivisions and decentralized public-law institutions of the State shall demonstrate that they possess:
3. Private sector institutions established under private law shall demonstrate that:
4. International entities shall demonstrate that:
The basic organization of the borrower and the executing agency shall be appropriate for the purposes of the operation.
With the exception of the member countries and their central banks, all potential borrowers shall demonstrate that:
1. They are endowed with and currently have adequate assets and financial resources. This conclusion might be supported by a financial analysis.
2. They are assured of adequate local counterpart contributions for the project or program in the amounts and at the times required.
3. They have the capacity to punctually pay service on their debts, particularly on the prospective IDB loan. This shall be confirmed by a financial analysis.
Prevailing Reference Documents:
GP20 to GP2019, May 1974 to December 1975,
GP251 to GP2523, October 1974 to May 1975.
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