World Bank Financial Products Overview
ProductIBRD Flexible Loan(IFL) 1, 2

Financing(Loans)

IDA Concessional
Financing 1

Financial Risk
Management

Insurance forDisaster Risk
Management

IBRD loan product with flexible financial terms tailored to the needs ofdevelopment financing or the client’s debt management strategy.
• Committed and repayable in the currency or currencies of the loan
selected by the borrower.
• Includes embedded risk management features – see financial risk
management options below.
Lending from IDA on concessional terms (carrying no or low interestcharges) to address primary education, basic health services, cleanwater and sanitation, environmental safeguards, business climate
improvements, infrastructure and institutional reforms.

Key Terms and Fees••••Maturity: final: ≤ 35 years, average repayment maturity: ≤20 Years
Repayment schedule: Flexible
Lending Rate: Reference Rate + variable spread
Fees: Front-end fee: 25 bps one-time fee
Commitment fee: 25 bps per annum (p.a.) on undisbursed balance
SBL Surcharge: for some countries• Maturity: 12/30/38/40 Blend/Regular/Small• Repayment schedule: Fixed• Lending Rate: Grants: zero; Credits: Fixed concessional rate

ProductNotes
IFL ProductNote
IFL Pricing
BasicsCaseStudies
Vietnam
Colombia
Kazakhstan
Botswana

IDA Single
Currency
Lending
Financing
Solutions for
IDA

West Africa

Enclave

Cote d’Ivoire

DPL DDO

Indonesia

IBRD CATDDOIDA CATDDO

Colombia Cat
DDO
Kenya - IDA• Repayment Terms and Lending Rates: follows IFL or IDA concessional financing
at time of drawdown (except that average repayment maturity for maturity
premium calculated at loan effectiveness).
• Fees: IBRD: Front-end fee: 25 bps one-time fee; standby fee: 50 bps p.a. on
unwithdrawn balances; no renewal fee. IDA: Zero fees

IPF DDOIPF DDO

Convert currency of an IFL between the four lending currencies, USD,EUR, GBP, JPY, using options embedded in the loan agreement5.
Convert disbursed amounts into 25 liquid local currencies.

• Fee5: Disbursed amounts from 6 bps p.a. from USD, 11 bps p.a. from EUR/JPY• Fee: Undisbursed amounts, lending currencies, one-time 12.5 bps

Localcurrency
financing

Interest rate risk in IFL

Fix, unfix, cap, or collar the interest rate using options embedded in theloan agreement5.

• Fee5: Rate fixing 5 bps p.a. for USD, 10 bps p.a. for EUR/JPY• Fee5: Caps and collar on a case-by-case basis

Hedging non-IBRD
exposure

Non-IBRD exposures to currency and interest rate risks can be hedged
similarly to IFL loans using free standing derivatives. Hedging Non-IBRD
exposure requires a client to have an ISDA Master Derivatives
Agreement with IBRD.

• IBRD countries are eligible• Currency Swap Fee: Major / local currency: 10 bps p.a. / 2 bps p.a.
• Interest Rate Swap Fee: Major / local currency: 3 bps p.a. / 1 bp p.a.

Catastrophe Bonds

Provides insurance against natural disasters by transferring risks tocapital markets.

Scale Up Window(SUW)

Contingent
Financing(Loans)

Use

Transitional support or additional lending offered to Blend and IDA
countries (at low or medium risk of debt distress) on IFL terms.

See IFLIBRD Enclave Loansfor IDA borrowers

Additional lending for IDA countries on IFL lending terms for investment
projects with foreign exchange revenues that can ringfenced.

See IFL; rate may be higher than IFL (see Enclave Loans product note)

IBRD DPL DDO

Contingent credit line that provides financing following adverse economic
events such as a downturn in economic growth or unfavorable changes
in commodity prices or terms of trade. It also provides a formal basis forcontinuing a policy-based engagement with the World Bank when no
immediate need for funding exists.

IBRD and IDA DPL
with CAT DDO 3, 4Contingent credit line that provides financing following natural disasterevents or health related emergencies, a time when liquidity constraints
are usually highest. Cat DDOs enhance countries’ capacity to plan forand manage crises by securing access to financing before disasterstrikes and then disbursing quickly once the event occurs.

IBRD and IDA IPF
DDOContingent credit line that provides financing following natural disasterevents or economic shocks, a time when liquidity constraints are usuallyhighest. IPF DDOs enhance borrowers’ capacity to plan for and manage
crises by securing access to financing before disaster strikes and thendisbursing quickly once the event occurs.

Currency risk in IFL

Insurance/Reinsurance

Provides insurance against natural disasters (e.g. geological events) andweather events by transferring risks to insurance markets.

Derivatives

Provides insurance against natural disasters and weather events bytransferring risks to markets in derivative form.

• Repayment Terms and Lending Rate: follow IFL terms at time of drawdown(except that average repayment maturity for maturity premium calculated fromloan effectiveness).
• Fees: Front-end fee: 25 bps one-time fee• Stand-by fee: 50 bps p.a.
• Repayment Terms and Lending Rates: follows IFL or IDA concessional financing
at time of drawdown (except that average repayment maturity for maturity
premium calculated at loan effectiveness).
• Fees: IBRD: Front-end fee: 50 bps one-time fee; renewal fee: 25 bps payable oneach renewal; IDA: Zero fees
• Limits: IBRD: Lower of $1bn or 0.50% of GDP; IDA: Lower of $500m or 1% ofGDP (or up to $40m)

IBRD and IDA countries are eligible to avail of these products through the WorldBank Treasury’s disaster risk intermediation platform.
The underlying risk is passed to the market (capital market, reinsurance market orprivate investors) such that pricing depends on individual risk metrics and market
conditions.

Interest Rate
Risk
Hedging
Products

TurkiyeIndonesia
South Africa
Mexico 1 & 2
Uruguay
Philippines
Sri Lanka
AngolaMoroccoHedging
Guidelines

Disaster Risk
Insurance
Platform
Weather
Derivative

Chile CatBond
Jamaica
Pacific All.
Philippines
PCRAFI
MexicoUruguay
MalawiUpdated June 2024

NotesAcronyms1.

IFL loans and IDA concessional financing can be blended with other concessional financing (for example,
through trust funds or grants). See case studies: Jordan and Lebanon, China, Mexico 1, Mexico 2

CAT DDO: Catastrophe Deferred Drawdown Option

2.

General conditions and instructions for IFL’s:

DPL: Development Policy Loan

a.
b.
c.
d.
e.

Development Policy Financing
Investment Project Financing
Program for Results
Flexible Loan Choice Worksheet
Flexible Loan Choice Worksheet instructions

DDO: Deferred Drawdown Option
GDP: Gross Domestic Product
IBRD: International Bank for Reconstruction and DevelopmentIDA: International Development Association
IFL: IBRD Flexible Loan

3.

For IDA borrowers 50% of the CAT DDO can be funded through Country Allocation/IDAs overall
resources. Eligible IDA countries can fund the CAT DDO using SUW financing.

IPF: Investment Project Financing

4.

Other crisis financing options available to IDA countries include:

SBL: Single Borrower Limit

ISDA: International Swaps and Derivatives Association
SUW: Scale Up Windowa.

Crisis Response Windowb.

Immediate Response Mechanismc.

Pandemic Emergency Financing Facility

5.

Standalone hedges (currency and interest rate swaps) are also available on IBRD loans. Fees quoted
here are for currency and interest rate embedded conversion options only. Fees for standalone hedges
will differ for currency and interest rate swaps.

6.

IBRD and IDA guarantees are also available to cover defaults on non-loan related Government payment
obligations, to private entities and foreign public entities arising from contract, law or regulation.

Disclaimer
Information in this handout might be subject to change. Refer to WorldBank Treasury for up to date product information.
This handout does not represent, and shall not be interpreted as, legal
advice or a recommendation as to any particular matter covered herein.

IBRD Eligibility Criteria

IDA Eligibility criteria

Eligibility for IBRD products isdetermined primarily by the member
country’s per capita income andcreditworthiness. Exceptionally, otherfactors (such as size, for certain
small island economies) may
determine a country’s eligibility for
IBRD products.

Eligibility for, and the specific terms of, IDA financing aredetermined primarily by the member country’s GNI per capita,
creditworthiness for IBRD borrowing, and risk of debt distress.
IDA also supports some countries, including several small island
economies, that are above the operational cutoff but lack thecreditworthiness needed to borrow from IBRD. Some countries
are IDA-eligible based on per capita income levels and are also
creditworthy for some IBRD borrowing. They are referred to as“blend” countries.

This handout serves as marketing material and does not provide thecomplete terms and conditions of the World Bank’s financial products.
Borrowers should refer to legal agreements and General Conditions withrespect to individual loans.

Contact

Miguel Navarro-Martin
Manager, Financial Products & Client Solutions
mnavarromartin@worldbank.org+1 (202) 458-4722

Additional Reference Material
Bank Directive: Financial Terms and Conditions of Bank Financing
Bank Policy: Financing Terms and Conditions of Bank Financing
Bank Directive: Conversion of Financial Terms of IBRD and IDA Loans and Financing Instruments

Updated June 2024