Terms & Conditions

Interest rates

IDCOL participates in a project's financing plan with either fixed or floating rate.
IDCOL prices its loans in reference to London Inter-Bank Offered Rate (LIBOR), a US dollar denominated interest rate index that is prevalent in the Euro-markets. Under current pricing, all loans are priced at a variable rate equal to the prevailing US dollar three-month LIBOR plus a margin set once each year with reference to current market conditions. Currently, the margins for senior and subordinated loans are 350 basis points and 400 basis points, respectively. For loans denominated in BDT, IDCOL sets interest rates with reference to two years Govt. Treasury Bill plus 400 basis points. Each year, IDCOL Board reviews the company's lending terms and conditions. In case of syndicated financing IDCOL's interest rate may match with that of other lenders providing similar loans.
As a prudent lender, IDCOL desires and at times may require the borrowers to enter into an interest rate hedge arrangement to prevent potential project cash flow shortages should LIBOR increase dramatically. Such a hedge may be arranged in the financial markets by borrowers or by IDCOL itself.
IDCOL provides soft loan in case of rural infrastructure having development impact. In that case IDCOL’s interest rate may vary from 6% to 9.5% p.a.

Currencies

In cases of IDCOL's US Dollar funding resources, it generally prefers to lend in that currency if borrowers generate their revenue in that currency or have an appropriate revenue contract denominated in local currency with an embedded hedge i.e., indexed to US dollars. IDCOL may also finance projects that do not generate hard currency or whose tariffs do not have indexation provision, provided that the projects sponsors agree to create a currency depreciation reserve.
Repayment schedule for IDCOL loan is semi annually / quarterly and will be set forth in US dollar. However, repayment in local currency is permitted provided that repayment is made in equivalent Bangladesh Taka (BDT) converted at the rate of exchange prevailing at the time of repayment.
However, IDCOL extends credit in BDT if a project does not have a revenue contract, generates only local currency and is perceived to have high development impact.

Tenor

Loan tenor depends on the nature of the specific project and the life of the assets financed. Within this constraint, the final maturity of a senior loan may be for up to 15 years while that for a subordinated loan may be up to 23 years.
The final maturity of a local currency loan is expected to be between 5 and 10 years depending upon the specific attributes of the project.

Repayment

Repayment is normally in equal semi annually / quarterly installments of principal and interest with a suitable grace period on repayment of principal. A maximum grace period of 4 years and 8 years, respectively for senior and subordinated loan is permitted and the construction period of the project will be part of the allowed grace period.
Depending upon project needs, the borrower has the option of using its equity resources to fund the interest due during construction or, otherwise, co-financing these amounts with drawdowns forthcoming from debt commitments. In the latter case, interest on the loan will be payable from the Commercial Operations Date.

Security

IDCOL requires appropriate security for its loans that include inter alia:
• Pledge of shares in the project company and creation of a voting trust permitting lenders to vote the shares of the company in times of distress;
• Direct agreements with key project participants that allow lenders to "step in" and take over the project when it is in trouble, without affecting the legality and validity of project agreements;
• First priority legal mortgage on all immovable assets as well as first priority hypothecation on all movable assets of the project company;
• Assignment of project company rights under all project agreements;
• Assignment to the extent possible of all contractors' and manufacturers' warranties;
• Completion guarantee and other similar support from sponsors; and
• First loss payee on insurance policies on project assets or interruption against natural force majeure as well as for business interruption or delayed start-up.
• Lien on project accounts.

Special Interest

Download Application Form -
pdf format, MS Word format

Form Submition
Application forms can be submitted via e-mail to contact@idcol.org

or send mail to :

Infrastructure Development Company Limited
UTC Building, 16th Floor,
8 Panthapath, Kawran Bazar, Dhaka-1215, Bangladesh
Tel: 9114385, 8111235, 8117526,9143157
Fax: 880-2-8116663