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LOANS FOR INVESTMENT

LOANS FOR INVESTMENT

loans, credits, economy, finance, currency, investments

loans, credits, economy, finance, currency, investments

The Bank offers two basic types of financing instruments: loans for investment projects and for adjustment lending. Loans for investments are long term (five to 10 years) and allow to finance the acquisition of goods and contracting of works and services for projects of economic and social development in a wide variety of sectors. Adjustment loans are short term (one to three years) and provide external financing of quick disbursement to support institutional reforms and policies. Both types of loan are used with flexibility to meet different purposes, and are occasionally used jointly in combined operations.

Financing for investment projects

Loans for investment projects provide financing for a wide range of activities aimed at creating the physical and social infrastructure to alleviate poverty and promote sustainable development. In the past 20 years, financing for investment projects has represented, on average, between 75% and 80% of the total financing granted by the Bank.

This type of financing has evolved over time. Initially focused on physical components, engineering services and project “brick and cement,” but is now more related to institutional strengthening, social development and infrastructure of public policies needed to facilitate private activity. The projects are varied and its objectives include the reduction of urban poverty (for example, with the participation of private housing construction contractors); rural development (formalization of land tenure to increase the safety of small farmers); water supply and sanitation (increasing the efficiency of the water supply companies); the management of natural resources (training in sustainable forestry and Agriculture); the reconstruction of post-war (reintegration of soldiers into communities); Education (promotion of the education of girls), and health (establishment of rural clinics) and training of health workers.

Requirements. They can apply for loans for investment purposes borrower of IBRD and IDA having no payments in arrears with the Bank Group.

Disbursements. Funds are disbursed against specific expenditures in national or foreign currency related to the investment project, including equipment, materials, civil works, technical services and consulting, studies and additional recurrent costs identified above. The acquisition of these assets and the hiring of these works and services represent an important aspect of the implementation of the project. To ensure results satisfactory, in the loan agreement may include conditions of disbursement to certain components of the project.

Instruments. The vast majority of the loans for investment projects are loans for specific investments or loans for investment and maintenance sector. Recently adaptable program loans and loans for learning and innovation, have been introduced to allow for greater innovation and flexibility. There are other instruments adapted to the specific needs of borrowers, such as technical assistance loans, loans to financial intermediaries and loans from emergency to recovery.

loans, credits, economy, finance, currency, investments

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