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p. 8 of 24 BACK | NEXT The Asian Development Bank Mobilizing Private Capital Assistance to Private Enterprises Eligibility for ADB Assistance Advantages of Working with ADB Extent of ADB Assistance Appraisal Criteria Loan Terms Security Procurement Accounting and Auditing Arrangements Corporate Governance Environmental Considerations Role of ADB in Supervising Investments Risk Principles for Investment Funds Sale of ADB Equity Investment Commercial Cofinancing Complementary Financing Scheme Guarantees Export Credit Agency Cofinancing Applying for ADB Assistance Processing Procedures Illustrative Private Sector Projects of ADB Contact Information

ADB’s Private Sector Operations: Catalyzing Private Investments Across Asia and the Pacific

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Loan Terms

The interest rate and other terms of ADB nonsovereign loans vary depending on the needs and risks of the project concerned (Appendix 2). Interest rates are in line with market rates prevailing in the relevant country and sector,and factor in the country risk and project risk. Typically,ADB provides floating rate loans at a spread above the London interbank offered rate or Euro interbank rate,depending on the currency.Fixed rate loans are also available at the fixed rate swap equivalent of floating rate loans.The final maturity and the amortization schedule are chosen depending on the project ’s cash flow profile. Typically,loans have level amortization with a grace period of two to three years.ADB also charges fees.Typically,on floating rate loans there is a once-only front-end fee of about 1.0 –1.5 percent of the loan amount,and a commitment fee of about 0.5 –0.75 percent per year on the undisbursed balance.Depending on the circumstances,ADB may also charge an appraisal fee to cover its up-front costs associated with due diligence.ADB is reimbursed by the sponsors for out-of-pocket expenses such as those for travel,and external advisory services (i.e., legal counsel,technical consultants,insurance advisors,etc.).

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