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Loan/Grant Administration. Types of Financing Highly concessional Hardened terms Intermediate terms Ordinary terms.

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Presentation on theme: "Loan/Grant Administration. Types of Financing Highly concessional Hardened terms Intermediate terms Ordinary terms."— Presentation transcript:

1 Loan/Grant Administration

2 Types of Financing Highly concessional Hardened terms Intermediate terms Ordinary terms

3 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

4 Basic documents Financing Agreement Letter to the Borrower Loan Disbursement Handbook AWPB Procurement Plan

5 Standard Procedures Replenishment to Special Account/Designated Account Reimbursement Direct Payment Special Commitment

6 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

7 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

8 Replenishment Should be in USD Atleast or equal to 20% of the advance

9 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

10 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

11 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

12 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

13 Basic formats for Withdrawal Applications Form 100 – to be filled by CAA&AForm 100 Application Summary Sheet (supported by documentation)Application Summary Sheet Statement of Expenditure Special Account Reconciliation Statement

14 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

15 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.

16 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

17 Breakup of Expenditure Reasonable disclosure of expenditure within the category PMU/District units-wise Activities Why the breakup is required?

18 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.

19 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).

20 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.

21 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.

22 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

23 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

24 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

25 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

26 Reconciliation of Disbursement IFAD sends copy of Disbursement AdviceDisbursement Advice Historic transaction Status of Funds by Category PMU to reconcile

27 Register of Contracts List all contracts with relevant details Form C10 from LDH Contract Monitoring Form C11 from LDH Certified copies of contracts (prior review procurement and above SoE threshold) to be sent to IFAD

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