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World Bank Guarantee Agreement

Recent global debates on financing for development have highlighted the potential impact of the Guarantee Instrument as the world seeks to mobilize additional resources for development, particularly from the private sector. The price of World Bank guarantees is set by the World Bank Board according to the same principles as for its credit instruments. The amount of the guarantee fee is set at the IBRD level and the IDA level is adjusted according to the average life of the guarantee and the price group to which the host country belongs. IbRD and IDA countries are divided into four price groups, which are described below. The amount of the guarantee is not adjusted to take into account the risks associated with the project. Project Agreement These are agreements to be concluded between the World Bank (IDA/IBRD) and the project company and/or the sovereign/sub-sovereign, depending on the structure-specific structure. These contracts include standard obligations for IDA/IBRD, such as. B, the use of the proceeds of the underlying financing, the proper functioning of the project, compliance with World Bank environmental standards, etc. Guarantee Support Agreement This is a contract between the government, the project company and the World Bank in which the government undertakes to pay the project company the overdue amounts, if the state entity or sub-sovereign that is the direct debtor does not make the payments as due. This treaty allows governments to remedy the default situation without unnecessarily triggering the World Bank guarantee.

Our guarantees offer several benefits to stakeholders involved in the government`s strategic investments and programs. Guarantee Agreement This is a contract between the World Bank (IDA/IBRD) and the beneficiaries of the guarantee. This agreement contains the terms of the warranty, such as. B duration, events covered, conditions, termination and suspension events, etc. In the case of credit guarantees, it is customary to include the guarantee agreement in the secured loan agreement. There is an important cost-benefit analysis that must be done before the use of government guarantees implicit in the use of World Bank guarantees. Nevertheless, when used wisely, they can be powerful and targeted instruments. Thank you for participating in this survey! Your feedback is very helpful to us as we work to improve the functionality of the website on worldbank.org. Thank you for agreeing to provide us with your comments on the new version of worldbank.org; Your response will help us improve our website. 1 The amount of the guarantee fee is determined by the average duration of the guarantee and the classification of the country – payment of debt service for commercial loans contracted by private projects that rely on contracts with the State for their cash flows, e.B. .

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