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BP 13.30 - Closing Dates


These policies were prepared for use by World Bank staff and are not necessarily a complete treatment of the subject.
BP 13.30
February, 2002
 

This Bank Procedures statement was revised in April 2012 to streamline clearance procedures by removing the requirement for legal clearance of: (i) the restructuring paper justifying a closing date extension; and (ii) notice of closing date extension sent to borrowers/recipients. It was previously revised March 2012 to take into account the provisions of OP/ BP 9.00, issued in February 2012. It was previously revised in April 2007 consequent to the issuance of OPBP 12.00, Disbursement. Previously revised in August 2004 to reflect the term "development policy lending" (formerly adjustment lending), in accordance with OP /BP 8.60, issued in August 2004; and updated in 2005 to reflect title change to "finance officer" (formerly disbursement officer) that took effect on July 1, 2002.

Note: OP and BP 13.30 apply to loans, credits, and the following grants: (a) grants of more than US$1 million under the Global Environment Facility (GEF) (except for GEF grants for projects executed by organizations identified by the GEF Council as eligible to work with the GEF through expanded opportunities for project preparation and implementation (such organizations include, inter alia, regional development banks and UN agencies such as FAO and UNIDO); (b) other grants under trust funds administered by the Bank ("trust fund grants") that are executed by the recipient and subject to agreements between the Bank and the recipient that provide for a closing date, unless otherwise provided in the agreement between the Bank and the donor; and (c) IDA grants, IBRD net income grants, and grants under DGF, including IDF grants ("World Bank grants"), which are executed by the recipient and subject to agreements between the Bank and the recipient that provide for a closing date. For the closing date of (a) GEF grants not covered by OP 13.30, staff should see the GEF operations website or consult the GEF Executive Coordinator, ENVGM; (b) trust fund grants not covered by this policy, consult the Head, Trust Funds Oversight Team, TFO; and (c) World Bank grants not covered by this policy, consult the Manager, Development Grant Facility, TFO. For termination of withdrawals under a Project Preparation Facility advance, see OP / BP 8.10, Project Preparation Facility.

OP and BP 13.30 replace the versions dated June 1993; and the Operational MemorandumRetroactive Extensions of Closing Dates, April 27, 2001; and para. 2(c) of the Operational Memorandum Responsibilities of the Managing Directors, Operations, and Regional Vice Presidents, March 11, 1996. The two documents are complemented by OPCS Guidelines and
 OPCS Templates, available online to staff. Questions may be addressed to opmanual@worldbank.org
.

Revised April 2012

1. The loan1closing date is usually set as the date falling six months after the project completion date. It is set at negotiations, and is documented in the legal agreement.2

2. The task team leader (TL) monitors the closing date during project supervision and discusses with the borrower the actions required to meet it. Not later than six months before the closing date, the TL discusses with the borrower the pending closure or a possible extension of the closing date.3 When the borrower seeks to extend a closing date, the TL agrees with borrower and implementing agency officials on the actions that need to be taken before the Bank will consider such an extension. The TL also ensures that (a) the closing date does not pass without Bank action to either close or extend the loan4and (b) agreements with cofinanciers related to closing dates are taken into consideration.5

Withdrawals after the Closing Date

3. If a project has been substantially completed by the closing date and only limited disbursements remain to be made, the Bank may, without formally extending the closing date, process eligible withdrawal applications received within four months after the closing date for expenditures made or payments due for goods, works, or services delivered or performed prior to the closing date. The TL notifies the borrower that the Bank will honor withdrawal applications for expenditures incurred prior to the closing date, if they are received by the Bank by a specified deadline not later than four months after the closing date.6, 7 The notice is cleared with the finance officer and copied to the lawyer.8

4.  The loan agreement may provide for the financing of audits required by the Bank under the operation.  The Bank may finance the reasonable cost of a final audit that will be completed after the closing date if (a) the borrower has concluded a contract for the final audit prior to the closing date; and (b) such contract is a lump sum or fixed price contract, which requires completion of the final audit within six months after the end of the fiscal year of the final disbursement made under the loan. If the Bank does not receive an acceptable audit within the time specified in the loan agreement, the borrower will be requested to repay the amount advanced by the Bank.9 

Closure of the Loan Account


5. The Loan Department completes disbursements against withdrawal applications received before the deadline for the receipt of withdrawal applications and advises the TL of the final status of the loan account, including the amounts disbursed for each category and the remaining balance. The TL (a) advises the borrower of the final disbursement position of the loan account and of the cancellation of any undisbursed balance, and (b) sends a copy of the notice to the lawyer and the finance officer. Normally, any loan balance is canceled and the loan account is closed within two months10 after the deadline for receipt of withdrawal applications, or within two months after the closing date if no such additional period is granted.11

Extension of the Closing Date

6. If an extension of the closing date is contemplated,12 the TL revises the implementation schedule and agrees with the borrower on a written action plan that covers (a) the additional time needed to complete project implementation and disbursements, (b) any actions the borrower and/or project implementation agencies need to take to meet the revised closing date, (c) the actions required to achieve compliance with any loan covenants that have not been fully met, and (d) the monitorable performance indicators that will be used to determine compliance with this action plan.

7. The TL prepares a restructuring paper justifying any recommendation to extend the closing date, and also drafts a notice to the borrower of the closing date extension. The TL clears both documents with the finance officer.
13 On the basis of the restructuring paper, the country director approves14 cumulative extensions of the closing date of up to two years (including extension of the closing date[s] for selected disbursements)15 and sends the notice of extension to the borrower.16 The lawyer is copied on the notice of extension. The Regional vice president (RVP) approves cumulative extensions of two years or more. Extensions of closing dates for all loans, credits, and GEF grants to which this BP applies are reported in the Report to the Executive Directors on Bank and IDA Operations. The TL also formally revises the disbursement projections in the Systems Applications and Products (SAP) system.

Projects under Suspension of Disbursements

8. For items exempted from suspension,17 the Bank may allow the borrower to submit withdrawal applications for up to four months after the closing date (see para. 3). If the suspension of disbursements is lifted before the closing date expires, the normal procedures outlined in this BP apply for allowing disbursements against eligible withdrawal applications received within four months after the closing date (see para. 3) or for extending the closing date (see paras. 6-7).18 

9. If a suspension of disbursements is in effect on the closing date or the deadline for submitting withdrawal applications for items exempted from suspension, any loan balance is normally canceled and the loan account is closed (see para. 4). In exceptional cases, when the Bank believes that lifting of the suspension is imminent and project and/or country circumstances warrant a delay, the RVP may authorize a delay in canceling the loan balance and closing the loan account. Once the suspension is lifted, the RVP may approve extension of the closing date in accordance with normal procedures (paras. 6-7).


____________

  1. "Bank" includes IBRD and IDA; "loan" includes IDA credit and IDA grant to which BP 13.30 applies; "legal agreement" includes agreements for the loans, credits, and grants to which BP 13.30 applies; "project" includes activities supported by investment loans, programs supported by development policy loans, programs supported by Program-for-Results financing, and activities supported by grants to which BP 13.30 applies; and "borrower" includes recipients of grants to which BP 13.30 applies.
  2. For some grants to which BP 13.30 applies, the closing date is set at the time the donor approves the funding proposal.
  3. Issues discussed include the borrower's option to request immediate cancellation of the undisbursed balance or the handling of withdrawals after the closing date (see para. 3). The timing of closing date extensions is critical because it may affect disbursement into designated accounts. See OP/BP 12.00, Disbursement.
  4. Except in the exceptional circumstances set out in para. 9.
  5. For grants to which BP 13.30 applies, throughout the process, the TL consults with the responsible grant program administrator, as appropriate.
  6. For loans to which the IBRD and IDA General Conditions (July 1, 2005) apply, and grants to which the Standard Conditions for Grants Made by the World Bank Out of Various Funds (July 20, 2006) apply, the period of up to four months for receipt of withdrawal applications for expenditures incurred prior to the closing date may be provided from the outset and is included in the disbursement letter for the project. In such cases, the notice regarding the four-month period for receipt of the withdrawal applications is not needed.
  7. See sample notice in the OPCS Templates.
  8. In addition, for grants to which BP 13.30 applies, the notice is copied to the Trust Funds Division of the Accounting Department (ACTTF) and the following: for GEF grants, the GEF Regional Coordinator; for trust fund grants, the relevant trust fund program administrator in TFO; for IDF grants the IDF Regional Coordinator; and for other DGF grants, the Manager, Development Grant Facility.
  9. For additional guidance to assist in the application of this provision, staff may refer to the Guidance for Loan Department Staff issued by the Loan Department.
  10. For procedures to determine the effective date of cancellation of the balance remaining in the loan account when a cancellation notice is sent after the closing date or, where applicable, after the deadline for receipt of withdrawal applications, see BP 13.50, Cancellation.
  11. See OP/BP 12.00, Disbursement for requirements related to designated accounts.
  12. See OP 13.30, paras. 3-6.
  13. For grants to which BP 13.30 applies, the memorandum and the ultimate notice extending the closing date are also cleared with, and the notice copied to the parties listed in footnote 8. For grants under trust funds administered by the Bank and executed by the Recipient, the TL should check whether the extension of closing date first requires an amendment to the end disbursement date shown in the Administration Agreement with the donor(s). If such amendment is required, the TL should contract the lawyer to prepare such amendment.
  14. The approval of the grant donor for extending the closing date may need to be obtained before the notice is sent, if required by the relevant trust fund administration agreement.
  15. Examples of selected disbursements are given in OP 13.30, para. 4.
  16. See sample notification in OPCS Templates.
  17. See OP/BP 13.40 Suspension of Disbursements.
  18. See also, OP 13.30, para.3.





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