Disbursement Procedures - Islamic Development Bank

(g) any other item deemed essential at the pre-operating stage of the project.
4.83 Limitations of Retroactive Financing: Retroactive financing would normally be
restricted to expenditures incurred and paid for by the beneficiary between the date of
appraisal and the date of effectiveness of the project. However, in cases where the
project objectives, design, implementation arrangements, and conditionalities are worked
out at the pre-appraisal stage, retroactive financing may be provided for expenditures
incurred and paid for by the beneficiary between the pre-appraisal stage and the date of
effectiveness of the project.
4.84 Retroactive financing should not exceed ten (10) percent of the total project cost.
4.85 In case of an emergency, the Bank may be required to respond quickly and
effectively to the situation e.g. natural disaster and its aftermath. The Bank's response
should continue to reflect the nature of each emergency and justify, case by case, the
need for retroactive financing. For these operations, the Bank could consider retroactive
financing of up to 20% of the loan amount for expenditures incurred within 4 months prior
to the expected date of signing the Agreement but after the occurrence of the emergency.
4.86 Control Measures: The following control measures should be applied for retroactive
financing:
a) Under retroactive financing, procurement and the use of Consultants must be
processed and cleared by the Bank as if the loan had already been signed.
(b) The beneficiary should be specifically advised that procurement actions
taken in expectation of retroactive financing are at the beneficiary's risk and
does not commit the Bank to agree to finance the project.
(c) Disbursement for retroactive financing shall be made to meet expenditures
on approved items and must be supported by adequate documentation in
accordance with the provision of the agreement.
(d) Documentation requirements for expenditures claimed under retroactive
financing should be the same as those for disbursement of expenditures
incurred after signing the agreement.
(e) The Appraisal Report should state the amount of retroactive financing, the
percentage of the project cost being retroactively financed, the period of
retroactivity, the nature of goods and services involved, and the justifications
for such financing.
4.87 Exemptions for Retroactive Financing: There is a need to provide a certain
measure of flexibility so that exceptions to the established policy may be accommodated
when justified by extraordinary circumstances (particularly in emergency recovery
operations). Such exceptions shall require the approval of the IDB President.
D-DISBURSEMENT MANUAL (1)
A:CHAPTER 4.16/05/2000
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