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Investment Financing with Deferred Drawdown Option

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Woman manipulating an instrument in a laboratory - Inter American Development Bank - Public Sector Investment Financing with Deferred Drawdown Option IF-DDO

Investment loans may include a Deferred- Drawdown Option (DDO), allowing the borrower to access Bank financing for pre-identified eligible expenditures upon the occurrence of a pre-specified trigger event aligned with the project’s development objectives.

The DDO may also be structured as a stand-alone operation.

The DDO can be used to address catastrophic natural disasters or public health events.

The DDO is justified on the grounds that the use of the option will help address urgent needs without jeopardizing long-term development objectives.

Financial Terms

Lending rate: SOFR base rate + IDB Ordinary Capital variable lending spread:​

SOFR base rate is USD SOFR daily overnight compounded rate + IDB's funding margin. Funding margin for 1st quarter 2026 is 41 bps.

IDB’s Ordinary Capital lending spread – 80 bps for 2026.​

Fees: ​Upfront fee: 50 bps; applicable on approved loan amount.​Stand-by Fee: 38 bps; calculated over the undisbursed balance. ​

Interest and Currency conversion options are available.​

For applicable loan charges and conversion option fees, please refer to www.iadb.org/rates

Flexible repayment options subject to a maximum maturity of 25 years, and maximum Weighted Average Life (WAL) of 15.25 years.​

​Standard amortization schedule (semiannual, straight-line payments), bullet repayment structures, extended grace periods, uneven amortization schedules, and shorter repayment periods are available without additional cost.​
 

Instruments that this can be combined with:

Post-disaster response activities

Immediate Response Facility for Emergencies caused by disasters

(IRF)

Provides rapid financial support for addressing the effects of disasters.
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Risk of investment projects

Partial Credit Guarantees

(PCG)

Provides credit enhancement for loans, bonds, or other debt instruments by covering various risks that could lead to default.
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Sovereign non-performance risks leading to debt default

Political Risk Guarantees

(PRG)

Covers sovereign non-performance risks of contractual obligations that could trigger debt payment default.
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Investments with defined objectives and scopes

Specific Investment Loans

(ESP)

Finances one or more specific projects or subprojects that are wholly defined at the time the IDB's loan is approved.
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Contingent credit line for immediate response after a disaster

Contingent Credit Facility for Natural Disaster and Public Health Emergencies

(CCF)

Provides resources for immediate response after a natural disaster or a public health event of severe catastrophic proportions.
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Results of an existing or new government program

Results-Based Loans

(LBR)

Finance the achievement of results of new or existing Government program. The LBR disburses once results have been achieved.
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Small independent investment projects

Multiple Works Financing

(GOM)

Finance groups of similar, independent and small works with specific characteristics, a sample of which are fully defined.
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Loans to small and medium-size enterprises

Global Credit Financing

(GCR)

Provides financing to enable borrowers to on-lend and/or issue guarantees to support the financing of multi-sector projects.
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Transfer of technical know-how

Reimbursable Technical Cooperation

(TCR)

Transfers technical know-how to strengthen the capacity of entities in developing countries and requires repayment like a regular investment loan.
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Project's preparation and start of activities

Projects Preparation, Execution and Evaluation Facility

(PROPEF)

Finances project's preparation for individual operations under a global line of credit.
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Credit line with a framework for a series of operations

Conditional Credit Line for Integrated Projects

(CCLIP)

Supports a long-term plan that combines funding, policy support, and technical assistance into one coordinated programmatic framework.
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Investment Financing with Deferred Drawdown Option

Investment Financing with Deferred Drawdown Option

(IF-DDO)

Investment loans may include a Deferred- Drawdown Option (DDO) to address catastrophic natural disasters or public heath events.
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Investment Guarantee

Investment Guarantee

(GUA)

SG investment guarantees are operational instruments designed to mobilize private financing by improving financing conditions or generating savings from liability management and catalyze private investment by covering specific risks that investors ar...
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