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General Policy

The Bank is prepared to finance, with foreign exchange, established percentages of the estimated total cost of projects. The percentages vary according to the country group to which the country that is the site of the proposed project belongs. Any financing in local currency of the local cost component of a project will be in addition to the portion to be financed in foreign exchange. Also, in the case of projects which include co financing, such financing may be considered as part of the local contribution.

Country Groups

For the purpose of applying its operational policies, the Bank groups its borrowing member countries on the basis of their relative level of development within the region:

Group A. The more advanced countries: Argentina, Brazil, Mexico, and Venezuela.

Group B. Middle developing countries: Chile, Colombia, and Peru.

Group C. Countries with insufficient markets: The Bahamas, Barbados, Costa Rica, Jamaica, Panama, Suriname, Trinidad and Tobago, and Uruguay.

Group D. The least-developed countries: Belize, Bolivia, Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Haiti, Honduras, Nicaragua, and Paraguay.

Matrix

With respect to the percentage of foreign exchange financing of total costs, the following matrix will apply:

In case of hybrid loans, with a fast-disbursing component as well as a long-term investment component, the matrix percentages referred to above will be applied to the investment component, while the fast-disbursing component will be financed in its entirety and in foreign exchange.

Financing Above Established Percentages

The percentages of foreign exchange financing of total costs indicated above are those that the Bank would apply regularly and consistently. At the borrower's request, the financing in foreign exchange could exceed these percentages if the cost of the goods and services that would have to be imported for a specific project exceeds the applicable level, provided that this does not mean a substantial reduction in the local contribution and provided that it is shown that no alternative source of financing exists on reasonable terms. For no category the share of foreign exchange is to exceed 90%.

The levels of financing according to the various country groups will be supplemented with an additional ten-percentage-point increase for projects of programs that are geographically targeted to poor beneficiaries or that a significant majority of the beneficiaries of the projects or programs, according to conditions prevailing in each country, are poor. However, in no case should the total financing exceed 90%.

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Prevailing Reference Documents:
GN­1335 and amendments, December 1979 to March 1980,
AB­1378, May 1989,
AB­1704, August 1994.
AB-2151, January 2003
CS-3400, January 2003
GN-2200, February 2003
GN-2200-1, March 2003
AG-1/02