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[Caribbean] || Caribbean Development Bank (CDB)

1.    Financing Energy Projects- Private Sector
No special window of funds
•    Guiding principles for intervention
– Additionality
– Catalytic Role
– Partnerships
• Other screening considerations
– Size of the project
– Seek well-capitalized new or expansion projects
– Eligibility to borrow
– Borrower’s commitment to project – evidenced by equity injection
– Desirability of borrower to mobilize other financial resources
– Maximum debt: equity ratio of 70:30
– Adequacy and variability of the project’s cash flows
– DSCR not less than 2
– Proven management
– Established markets
– Reasonable diversification of risks

Private Sector Terms
• Current Interest Rate 4.5% plus premium: (reviewed semi-annually)
• Maximum maturity: 14 years incl. of < 5 years grace
• Lower Loan Limit: USD750,000
• Current Upper Loan Limit: USD12 mn or 50% of project costs whichever is lower
• Commitment Fee: 1% p.a. on undisbursed balance
• Front End Fee: 1% of loan amount
-50% deposit prior to loan appraisal, 50% on loan approval

Security & Procurement
•    Security
– First legal mortgage on freehold property
– First fixed and floating charges on other assets
– Other forms of security without prior claim may be accepted in appropriate cases
– When co-financing, security shared on a pari passu basis
•    Procurement
– Unrestricted competitive shopping
– Waivers for expansion projects if equipment compatibility an issue

Information Requirement
•    Feasibility study
•    Brief history and financial capacity of sponsor
•    Implementation arrangements
•    Proposed structure of ownership and management of project
•    Operational arrangements for the project
•    Historical financial data and expected operational and financial performance
•    Analysis of risks including social and environmental risks and impacts
– Allocation and/or mitigation of risks

Application Process
•    Submit detailed project proposal to CDB.
•    Project screened by CDB against relevant criteria.
•    Discussions initiated with applicant to address any issues, information gaps etc.
•    Following preliminary assessment project recommended for “full appraisal” if all criteria are satisfied.
•    Project schedule prepared and appraisal mission undertaken.
•    Draft Appraisal Report prepared for internal review.
•    Following Loans Committee approval, project presented to Board of Directors for consideration.
•    A 3-4 month process if all the required information is submitted on application.


Allison Davis
Portfolio Manager
Economic Infrastructure Division
Tel: (246) – 431-1654

Category/ies:Funding Opportunities.
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