Concessional Financing

Concessional financing is offered to the IDB’s most vulnerable member countries. At present Bolivia, Guatemala, Guyana, Honduras, Nicaragua and Paraguay qualify for some form of concessional financing that is provided via blended loans. Haiti benefits exclusively from grants.

Blended loans result from the combination of highly concessional financing terms from the Fund for Special Operations (FSO) and market-based terms from the Ordinary Capital (OC) that are disbursed pari-passu from a predetermined mix of FSO and OC funds that varies by country based on its debt sustainability.

The introduction of the blended loan approach—after the IDB participated in the largest debt relief initiative for Latin American and Caribbean countries in 2007—allowed it to extend concessional financing for additional years. Blend financing replaced the FSO traditional loan as well as the interest subsidies that were provided through the Intermediate Financing Facility (IFF).

Concessional Financing: Terms and Conditions (PDF)