In this section, you can explore and compare the key features of three instruments at a time, including their primary objectives, terms and conditions, eligibility criteria, and disbursement requirements.
Deferred Drawdown Option for Catastrophic Risks
(Cat DDO)
Global Credit Financing
(GCR)
Contingent budget support. The amount is set at approval, within the limits approved by the Board of Executive Directors. Cat DDO approvals do not count against the limits on total PBF approvals.
Estimated cost of sub-loans based on expected demand for investments and financial capacity of intermediaries
Maturity: Flexible, max. 20 years
Weighted Average Life (WAL): Flexible, max. 12.75 years
Interest rate: SOFR base rate + Cost of Funding (41 bps) + IDB Ordinary Capital lending spread (80 bps)
Fees:
Upfront fee: 50 bps on the approved loan amount
Renewal fee: 25 bps on the undisbursed amount at the time of renewal
Options:
Flexible repayment options: Available
Interest rate conversion options: Available
Currency conversion options: Available
Maturity: Flexible, Max. 25 years
Weighted Average Life (WAL): Flexible, Max. 15.25 years
Interest Rate: SOFR + Cost of Funding (41bps) + IDB OC Spread (80bps)
Fees:
Commitment Fee: 50 bps
Upfront Fee: n.a.
Draw-down Fee: n.a.
Options:
Flexible Repayment: Available
Interest Rate Options: Available
Currency Options: Available
Eligible for CRDC activation: Yes
Definition of expenditures: Proceeds are not tied to specific expenditures. The Borrower undertakes not to use them for items on the Negative List.
Identification and approval: The country must have an adequate macroeconomic policy framework and a satisfactory disaster risk management program. Policy actions are agreed during preparation and the Board of Executive Directors approves the operation.
Definition of expenditures: Investments financed through sub-loans are not defined prior to loan approval, with specific projects determined based on demand.
Project Identification and Approval: A Credit Regulation Agreement must be in place to establish eligibility criteria and approval mechanisms for sub-loans.
Fund Allocation and Execution: Funds are allocated incrementally based on sub-loan approvals and demand.
Disbursement requires the satisfactory implementation of the agreed policy actions and the fulfilment of a pre-specified condition linked to a natural disaster or a public health emergency, typically the country’s declaration of a state of emergency or its equivalent. The drawdown period may be renewed while implementation of the reforms remains satisfactory, and the Board of Executive Directors approves replenishments.
Disburses incrementally based on approved sub-loans
Budget support operation. As part of its due diligence the Bank reviews the Borrower’s public financial management and procurement arrangements, including the control environment, and determines whether the operation should include measures to address identified weaknesses.
IDB policies and regulations but GN-2349-15 paragraph 3.13 states core principles for projects with financial intermediaries executed by public sector sub borrowers and commercial practices for private sector sub borrowers. IDB financial management policies and regulations
PBF operations are subject to the Environmental and Social Policy Framework (ESPF) regulations, to the extent established in the applicable ESPF provisions.
ESPF - Operations will have the FI Impact Classification (see sections 4.1, 4.2 and 4.3 of the ESPF for specific provisions for FIs)