OP 13.20 - Additional Financing for Investment Lending

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. 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.

1. “Bank” includes IBRD and IDA; “borrower” includes credit and grant recipient; “additional financing” includes IBRD loans, IDA credits, IDA grants, and trust fund grants that are approved by the Board and are additional to ongoing loans approved by the Board; and “project” means the original Board-approved investment project processed under OP/BP 10.00, Investment Lending: Identification to Board Presentation, OP/BP 8.00, Rapid Response to Crises and Emergencies, or OP/BP 14.40, Trust Funds.  Upon Board approval of an additional loan processed under OP/BP 13.20, Additional Financing, “project” means the original project expanded to include activities financed under the additional loan.  The policy and procedures on additional financing do not apply to development policy lending, for which the policy and procedures are set out in OP/BP 8.60, Development Policy Lending, or to Program-for-Results financing, for which the policy and procedures are set out in OP/BP 9.00, Program-for-Results Financing.
2. This means the original project development objectives or, when the project objectives have been changed as part of project restructuring, the revised project development objectives (see BP 13.05, Project Supervision).
3. This appraisal, like any project appraisal, covers the economic, financial, technical, institutional, fiduciary, and any safeguards aspects that are relevant to such activities, and their impact on the project under implementation.