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IFAD Financial Products

IFAD provides financing through loans, grants and a debt sustainability mechanism.

Loans 

IFAD provides loans to developing Member States on highly concessional, blend and ordinary terms for approved projects and programmes. The criteria for determining the financing terms is detailed in IFAD Policies and Financing Criteria.

Grants

Grants may be provided to: (i) developing Member States; (ii) intergovernmental organizations in which Member States participate; and (iii) other entities which the Executive Board determines to be eligible pursuant to article 8 of the Agreement. Grants are provided in accordance with a policy for grant financing established by the Executive Board.

Debt Sustainability Mechanism

Financing under the debt sustainability mechanism is provided to eligible Member States in the form of grants or a combination of a grant and a loan on highly concessional terms, in accordance with arrangements for implementation of a debt sustainability framework.

IFAD financing terms

  • IFAD loans granted on highly concessional terms are free of interest. A service charge of three fourths of one per cent (0.75% per cent) per annum and a maturity period of forty (40) years, including a grace period of ten (10) years are applied, starting from the date of the approval by the Executive Board

  • IFAD loans granted on blend terms are subject to interest on the principal amount outstanding at a fixed rate of 1.25 per cent and a maturity period of twenty five (25) years, including a grace period of five (5) years and in addition a service charge of 0.75 per cent, starting from the date of the approval by the Executive Board.

  • IFAD loans granted on ordinary terms shall have a rate of interest per annum equivalent to one hundred per cent (100 per cent) of the variable reference rate, as determined semi-annually by the Executive Board, and a maturity period of fifteen (15) to eighteen (18) years, including a grace period of three (3) years, starting once the specified disbursement conditions have been met.

  • IFAD offers a Single Currency Lending (SCL) facility which allow member States to borrow  in either EUR, USD or SDR. All IFAD countries that receive full or partial access to DSF Funding (DSF or DHC) Highly Concessional, Blend and Ordinary term loans are eligible, at their discretion, to request single-currency loans (USD or EUR) on a first-come, first-served basis.

  • No Commitment charge is applied on any loan by IFAD.

  • No Front-End Fee is applied on any loan by IFAD.

  • No additional fee is applied on loan cancellation.

  • No additional fee is applied on early repayment of loan principal.

  • IFAD billing procedures provide up to 30 days interest rate free for repayments.

Variable Spread Pricing Structure

  • IFAD pricing of ordinary loans is based on a floating reference rate, calculated bi-annually based on six-month LIBOR/EURIBOR, plus a variable spread.
  • IFAD’s bi-annual interest rate semesters commence on 1 January and 1 July.
  • The variable spread is that which has been published by the International Bank for Reconstruction and Development (IBRD) at the start date of the applicable interest rate semester.
  • The variable spread corresponds to the International Bank for Reconstruction and Development (IBRD) variable spread for an average maturity “Greater than 18 to 20 years”, however it is important to note that this spread is not linked to the average maturity of IFAD’s non-concessional lending portfolio.
  • For loans on ordinary and intermediate variable terms denominated in SDR, the applicable rate is based on the SDR LIBOR six-month variable rate in force on the first working day of the six-month period plus the International Bank for Reconstruction and Development (IBRD) SDR spread (variable rate/variable spread loans).
  • For loans on ordinary and intermediate variable terms denominated in USD, the applicable rate is based on the LIBOR six-month variable rate in force on the first working day of the six-month period plus the International Bank for Reconstruction and Development (IBRD) USD spread (variable rate/variable spread loans).
  • For loans on ordinary and intermediate variable terms denominated in Euro, the applicable rate is based on the EURIBOR six-month variable rate in force on the first working day of the six-monthly period plus the International Bank for Reconstruction and Development (IBRD) Euro spread (variable rate/variable spread loans).
  • Where any LIBOR/EURIBOR rate has a negative value, it will be deemed to have a value of zero for the purpose of calculating IFAD’s variable interest rates.

Pricing Review Process

  • IFAD updates its pricing semi-annually based on the recalculation of the underlying reference rate and IBRD’s spread.
  • The Borrowers are informed of the applicable interest rate through publication on the IFAD website.
  • Interest rates applicable for second semester of 2017

 

IFAD Loans

Ordinary Variable

Intermediate variable (*)

SDR denominated

2.08%

1.04%

Euro denominated

0.95%

0.48%

USD denominated

2.41%

N.A.