General Operational Policies
General
The President of the Bank, or such representative as he shall designate, is authorized, in the name and on behalf of the Bank, to sign such agreements as may be necessary with the European Economic Community (EEC), the International Agricultural Development Fund (IFAD), and the Special Fund of the Organization of Petroleum Exporting Countries (OPEC), for the participation of the Bank in the technical analysis and administration of financing which are made by such agencies to developing member countries of the Bank for the purpose of cooperating in the execution of social and economic projects.
Such agreements would generally include any understanding designed to obtain additional funding be it on a regular basis for certain types of operations, or, on a onetime basis, for specific operations.
This policy does not cover parallel financing arrangements worked out directly between financing sources and borrowers for projects or programs also financed by the Bank.
Basic Guidelines
The following general criteria are presented to guide the process and terms of negotiating agreements with sources such as those named above or any other institutions or countries that wish to contribute financial resources to help meet Latin America's development needs.
Nature and Purpose of Agreement. The Bank may enter into cooperation agreements with public agencies for the execution of lending, financing and/or technical cooperation projects in borrowing member countries, in the following categories:
a) Cofinancing agreements, whereby the Bank would furnish part of the resources needed by the project and assume the responsibility for the analysis and supervision of the project, as well as the administration of the joint financing.
b) Technical collaboration agreements, whereby the Bank would simply supply the other entity with projects already appraised out of its own pipeline; or would conduct the evaluation of projects presented by the other party; and/or would perform technical monitoring during execution of the project.
c) Agreements for administration of financing granted by a cooperating agency for the execution of projects or the financing of companies, in either of which the Bank does not participate financially but in which it might be participating with funds under administration. Such projects or equity financing must either have been evaluated by the Bank or be acceptable to it when the evaluation has been made by another institution and require the express approval by the Board of Executive Directors.
Any cooperation agreement in which the Bank Participates shall stipulate that such agreements must follow the basic policy, procedures and conditions applied by the IDB to the evaluation, granting and administration of its loans and technical assistance.
Project Eligibility criteria should in general be established in the pertinent agreements. Projects will be selected pursuant to those criteria on the basis of periodic consultation between the parties to discuss and review the information available.
The Cooperating Agency shall contribute its resources as a donation or on financial terms and conditions determining the interest rates, service fees and grace and amortization periods that are no less advantageous to the borrower than those set by the Bank for borrowers from its cofinancing funds, nor less advantageous than those it would grant, if it were financing with its own resources those projects in which it agreed to intervene without any commitment with regard to financing.
The agreements shall establish no restrictions with regard to Procurement of Goods and Services, so that the borrower may use the resources of the loan to make purchases in any country, pursuant to the eligibility criteria and procedures of the Bank. However, in the case of resources contributed by multilateral entities or groups of countries for the financing of operations on more favorable terms than those granted by the Bank with its FSO resources, preferential treatment with regard to procurement may be given to the countries specified as eligible by the contributors. In the case of a single contributing country, however, it would not be considered acceptable to restrict eligibility for procurement exclusively to that country and to the beneficiary.
The Bank will be entitled, as a minimum, to reimbursement of any expenses incurred as a result of its participation in any cooperation agreement, in addition to the remuneration it may obtain for its services. In both cases, the calculation and collection procedures shall be determined by agreement between the parties.
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Prevailing Reference Documents: GN-1340, January 1980 to GN-1340-4, November 1980.