After in-house careful study, IDB sends its technical staff to member countries to appraise the project and to assess its economic and financial viability. If the project clears the appraisal stage, it is submitted to the Board of Executive Directors for approval. If approved, a financing agreement is to be signed between the Bank and the beneficiary. Goods and services financed by the Bank are normally procured through international competitive bidding. Consultancy services are obtained through the short-listing procedure.
Preference is given to firms from member countries.
Disbursements are based on actual project execution. The borrower is expected to periodically inform the Bank of the progress of the project. The Bank may send special follow-up missions to assess the project status. Generally, the Bank does not finance cost overrun and there is a condition in all its financing agreements that the beneficiary is responsible for covering cost overrun. However, in very exceptional and well justified cases, particularly in the case of leasing, istisna'a and instalment sale financing, the Bank may consider covering such cost overrun within certain limits.