This Operational Policy statement was revised in March 2012 to take into account the provisions of OP/BP 9.00, issued in February 2012. It was previously updated in January 2012 to extend its applicability to all recipient executed trust funds (RETF), in November 2009 to reflect clarifications discussed in a progress report, Additional Financing: Responding to New Needs, (February 2009) and in March 2007 to reflect issuance of OP/BP 8.00, Rapid Response to Crises and Emergencies, dated March 2007.
Note: OP and BP 13.20, Additional Financing for Investment Lending, apply to additional loans considered by the Executive Directors on or after June 1, 2005, and to additional RETF project papers submitted for approval on or after January 27, 2012. For technical guidelines to staff on processing additional financing, including an outline for the Project Paper for Additional Loans, staff may refer to "Guidance to Staff on Processing Additional Financing," available on the OPCS website. Questions on the additional financing policy should be addressed to email@example.com.
Revised March 2012
1. The Bank1 may provide additional financing, beyond the amount specified in the loan agreement, for an investment project under implementation to finance (a) completion of the original project activities in the event of an unanticipated financing gap or a cost overrun; (b) activities that scale up a project’s impact and development effectiveness; and/or (c) modified project activities included as part of project restructuring when the original loan amount is insufficient to cover such activities.
2. The Bank provides additional financing only when it is satisfied that (a) implementation of the project, including substantial compliance with loan covenants, is satisfactory, and (b) the additional loan is economically justified. When providing additional financing, the Bank also:
(i) ensures that such activities are consistent with the development objectives2 of the project and with the current Country Assistance Strategy or Country Partnership Strategy;
(ii) appraises the activities;3 and
(iii) confirms that the additional loan is expected to close within three years after the current closing date for the original loan.
3. When the source of financing is IBRD or IDA, additional financing is provided as a separate loan and constitutes a new loan commitment. The financial terms and conditions for the additional loan are set in accordance with the provisions of OP 3.10, Financial Terms and Conditions of IBRD Loans, IBRD Hedging Products, and IDA Credits. The loan is subject to approval by the Bank’s Board of Executive Directors. When the source of financing is a trust fund, additional financing also constitutes a new commitment and is approved according to the provisions of OP 14.40, Trust Funds.4