Untied State-to-State loans
Untied aid is exclusively given through State to State Loans (SSL) and has:
- a 0% interest rate;
- a reimbursement term of 20 years preceded by a 10 years grace period during which the beneficiary country does not have to make any repayment.
According to OECD rules, untied aid must comprise a minimum grant component of 35%. However, some countries that are eligible for untied aid must receive a 50% minimum grant component. To know the exact grant component a country has to comply with, you can contact the Finexpo Secretariat.
Given the fact that the approval of untied aid is not linked to a predetermined exporter, this support can only be given under the form of a SSL. In order to give a sufficient amount of developing countries (Least Developed Countries and Highly Indebted Poor Countries) the opportunity to apply, untied SSL amounts are limited to 8 million EUR.
If a country wishes to finance a project of more than 8 million EUR, it is possible to combine the untied loan with a commercial credit. Such “untied” mixed credit is handled in the same way as a tied mixed credit and the SLL has the same characteristics as the tied aid SSL (40 year repayment, including a 18 years grace period). As for most countries a grant element of 35% has to be respected, the ratio between the State-to-State loan and the commercial credit is 2/3 SSL and 1/3 commercial credit, the same ratio as for tied mixed credits.
Finexpo mostly supports projects in the following sectors: rural electrification, public transport, water, health, education and governance, and research & development.
The inconvenience for Belgian companies that participate in the international tender is that they have no certainty that they will be awarded the contract