loan/grant administration. types of financing highly concessional hardened terms intermediate terms...
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Description of lending terms
• Highly concessional – no interest, service charge of 0.75%, repayment in 40 years including 10 years grace period
• Hardened terms – no interest, service charge 0.75%, repayment in 20 years including 10 years grace period
• Intermediate terms – interest @ 0.5% of IFAD Reference rate, maturity period 20 years including 5 years grace period
• Ordinary terms – interest on par with IFAD Reference rate, maturity period 15-18 years including 3 years grace period
Basic documents
• Financing Agreement
• Letter to the Borrower
• Loan Disbursement Handbook
• AWPB
• Procurement Plan
Standard Procedures
• Replenishment to Special Account/Designated Account
• Reimbursement
• Direct Payment
• Special Commitment
Special Account/Designated Account
• Provides a mechanism, somewhat like an imprest account
• Borrower should have sufficient control and financial systems
• Should be in a currency and bank acceptable to IFAD
Special Account/Designated Account
• Initial deposit will be determined by the Borrower
• Administered by CAA&A
• Audit of Special Account done by the office of C&AG
• Ceiling of Authorised Allocation
Reimbursement
• Outside Designated Account
• For Government pre-financed expenditure
• Could be in any currency requested by the borrower
• Will not flow to Designated Account
• Should not be later than 3 months
Direct Payment
• IFAD directly pays third party
• Project instructs IFAD to pay directly
• In-country banking regulations are stringent
• For above USD 20,000
• Documentation should show evidence of amount due
Direct Payment
• For above USD 20,000
• Documentation should show evidence of amount due
• Progress or due payments
• Only to party in the contract
• Payment instructions should be clear
Recovery of Initial Deposit
• Balance in the Loan Account minus committed expenditures equals to twice the authorised allocation
• 6 months before Project Completion
• Balance in SA/DA to be refunded
Basic formats for Withdrawal Applications
• Form 100 – to be filled by CAA&A
• Application Summary Sheet (supported by documentation)
• Statement of Expenditure
• Special Account Reconciliation Statement
Statement of Expenditure (SoE)
• Normally used where it is impractical or unduly burdensome to provide documentation
• No documentation required
• Threshold in the LTB
• Separate forms for each category
• Breakdown of expenditure
Statement of Expenditure (SoE)
• IFAD to be satisfied about the Borrower’s/LPA’s accounting standards, internal control, auditing capabilities are sound and adequate
• SoE method could be for threshold value of expenditure or for a particular category
• Threshold could be revised either way, if situation warrants.
What a SoE should contain?
• Form 100
• Special Account statement
• Abstract of summary sheets
• SoE – signed by PD and Borrower – for each category
• Breakdown of expenditure
Breakup of Expenditure
• Reasonable disclosure of expenditure within the category
• PMU/District units-wise
• Activities
• Why the breakup is required?
Documentation required - Overall
• The signed contract or confirmed purchase order– showing the specified amount that is due to be paid;
• The bank guarantee for advance payment, as specified in the contract documents;
• The bank guarantee for performance, as specified in the contract documents;
• Copies of communications sent by the IFAD country programme manager to the lead project agency providing the ‘no objection’ (whether post or prior) to the contract award; and
• Evidence of payment.
Documentation required (contd)
In additional to overall requirements, for goods:
• Supplier’s invoice, duly certified for payment specifying the goods, their quantities, and prices;
• Bills of lading or similar documents; and
• As appropriate, the certificate of delivery (to include condition of goods on delivery).
Documentation required
In addition to overall requirements, for Consultancy payments:
• The supplier’s or consultant’s claim, duly certified for payment and showing sufficient detail; and
• As appropriate, a certificate of delivery of satisfactory services.
Documentation required
For progress and retention payment of civil works:
• The claim of the contractor, including a financial progress report, stating the work performed and the amount due;
• A certificate – signed by the project consultants or owner’s representative, if any, or by
• the borrower’s chief engineering officer to the effect that the work performed is satisfactory and the payment claimed is due in accordance with the terms of the contract; and
• A copy of the contract payment monitoring form signed in original by the certifying officer.
Wtihdrawal of Loan resources
• Expenditure to cover reasonable cost of goods and services required for the project
• Establishing the trail of the expenditure to the AWPB
• Within the programme implementation period
• Category ceilings are not exceeded
• Establish the recommendations of the JRM are complied with
• Status of audit reports
• Compliance of reporting
Rejection of WAs
• IFAD may reject the WA either fully or partially
• Requested information is not provided within the timeline (7 days)
• Project to resubmit the WA in full or part
Why IFAD rejects the WA
• No trail available to AWPB
• Procurement not as per the approved Procurement Plan
• Wrong Categories
• Incorrect eligible percentages
• No breakup available for review
Measures that could be adopted
• Refer the Cost Tables or Costab files for correct category
• Financing Agreement provisions
• Expenditure as per the AWPB
• Respond within the timeline
• Use checklist
Adobe Acrobat Document
Reconciliation of Disbursement
• IFAD sends copy of Disbursement Advice
• Historic transaction
• Status of Funds by Category
• PMU to reconcile
Adobe Acrobat Document