Disbursement Procedures - Islamic Development Bank

2. Article III stipulates that the Bank opens a loan project account in its books in the
name of the borrower and the amount of the loan credited therein. The article also
describes the service fee, repayment and place of payment conditions.
3. Article V sets outs the requirements for the withdrawal of proceeds and effective
date as follows:
• Withdrawal of proceeds
The Borrower is entitled to withdraw funds for amounts spent on the project in
accordance with the provisions in the Financing Agreement and General Conditions.
Withdrawals can only be made for eligible expenditures.
• Application for Withdrawal or issuance of special commitment.
For withdrawal of any amount or request for issuance of irrevocable commitment,
the Borrower must apply to the Bank in writing in such form and containing the
information that the Bank requires.
• Issuance of Special Commitment
At the request of the Bo4rower, The Bank may issue an irrevocable commitment to
reimburse a commercial bank through our correspondent bank for payments made to a
supplier against a Documentary letter of Credit (L/C). The finance will be from the loan
account.
• Documentary evidence of Authority to sign withdrawal Applications.
The Bank requires the Borrower to submit documents evidencing the authority of
the person or persons authorized to sign all applications with authenticated specimen
of their signatures.
• Supporting Evidence
The Borrower must provide to the Bank such other documents and evid3ence in
support of each applications that the Bank shall reasonably request, whether before or
after the Bank has permitted disbursement.
• Sufficiency of Application and Documents
Each application for withdrawal and its accompanying documents and other evidence
must be complete and/or sufficient in form and context so as to satisfy that the Borrower is
entitled to withdraw the amounts applied for that the amounts are eligible expenditures.
• Reallocation of Proceeds
• Payment by the Bank
The Bank shall pay the amount withdrawn by the Borrower from the Loan project
account to the borrower only or his order.
The Borrower undertakes not to use the amount withdrawn from the loan except for
eligible expenditures.