Starting 2012, Latin American and Caribbean countries can customize the terms and conditions of loans they secure from the Inter-American Development Bank to their individual needs.
This will be possible under the new Flexible Financing Facility approved by IDB, which will be fully implemented Jan. 1, 2012. Aside from the option to tailor loan terms and conditions, the FFF will also allow countries to manage risks associated with their IDB loans.
“Countries’ financial needs frequently change during the life of our loans,” Edward Bartholomew, IDB’s chief financial officer and finance department manager, said in a news release. “These flexible financing solutions will allow our sovereign borrowers to better manage risks, whether at a project level, in their broader lending programs or as part of comprehensive asset and liability management strategies.”
The FFF will allow countries to divide their loans into tranches or sub-loans with different interest rates, currency bases, repayment schedules and other terms. Borrowers will also be able to manage the risks associated with their loans to allow for better asset liability management.
Read more development aid news.