Relevant provisions of World Bank loans

1. Loan target: official, state-owned and private enterprises of member countries. If the borrower is not the government, the government guarantees it.

2. Loan purposes: mostly project loans, which are used in many fields such as industry, agriculture, energy, transportation and education. The bank only provides 20% ~ 50% of the total investment of the project construction, and the rest is raised by the borrowing country itself, which is what we usually call domestic matching funds. Bank loans must be earmarked, and the borrowing country must accept bank supervision.

3. Loan term: about 20 to 30 years, with a grace period of 5 to 10 years.

4. Loan interest rate: determined according to the interest rate raised by the World Bank from the capital market. Adjust once every three months or half a year. The loan interest rate is lower than the market interest rate, and the loan charges less miscellaneous fees. Only 0.75% commitment fee is charged for outstanding loans after signing the contract.

5. Loan amount: It depends on the borrower's per capita gross national product, the strength of debt credit, the borrower's development goals and needs, the feasibility of investment projects and the order in world economic development.

6. Types of loans: First, specific investment loans; Second, departmental loans; Third, structural adjustment loans; Fourth, technical assistance loans; Fifth, emergency recovery of loans.

7. Loan procedures: The procedures are complicated and strict, generally taking one and a half to two years.

8. Repayment: due repayment, no breach of contract, no change of repayment date.

9. Risk-taking: The borrowing country bears the risk of exchange rate changes.

The loan procedures of the World Bank:

(1) project selection. As the first stage of the project cycle, project selection is very important. Whether a feasible project can be selected from many projects in borrowing countries is directly related to the success or failure of the World Bank's loan business. Therefore, the World Bank has always attached great importance to the selection of projects. The World Bank mainly adopts several ways to select projects: ① conducting various economic studies with borrowing countries; (2) Formulating the loan principle and defining the loan direction; ③ Discuss the loan plan with the borrowing country; (4) Send a project appraisal team.

(2) Project preparation. After the World Bank and the borrower evaluate the project and select the loan project, the project enters the preparatory stage.

In the preparation stage of the project, the World Bank will send a delegation composed of experts from various fields to formally carry out the preparation of the project loan together with the borrowing countries, so as to lay the foundation for the feasibility analysis and evaluation in the next stage. Generally speaking, the borrowing country has direct and primary responsibility for project preparation.

(3) Project evaluation. After the project preparation is completed, it will enter the evaluation stage. Project evaluation is basically done by the World Bank itself. The evaluation content of the World Bank mainly includes five aspects, namely, technology, economy, finance, institutions, society and environment.

(4) Project negotiation. Generally, the World Bank and the borrower agree on the negotiation time first, and then the World Bank invites the borrower to send a delegation to Washington for negotiation. Both parties generally confirm the terms of the loan agreement and the project agreement, and discuss relevant technical issues.

(5) Implementation of the project. After the negotiation, the borrower and the project beneficiary shall formally confirm the loan agreement and project agreement reached through negotiation. On this basis, according to the loan plan, the World Bank Management Department submitted the project to the World Bank Executive Board for approval. After the project was approved, the World Bank formally signed an agreement with the borrower. After the agreement is formally signed, the borrower can go through the relevant legal authentication procedures according to the conditions required for the loan to take effect, and send the legal documents required for the entry into force to the World Bank for review. If the procedures are complete, the World Bank will declare the loan agreement effective and the project will enter the implementation stage.

(6) Post-project evaluation. In a certain period after the project loan account is closed, the World Bank should summarize the project, that is, the post-evaluation of the project. Through the review of completed projects, the experience and lessons of previous cycles of the project are summarized, and the realization degree of expected benefits of the project is evaluated.