What is a concessional loan?

What is a concessional loan?

What is a concessional loan? A concessional loanis a loan made on more favourable terms than the borrower could obtain in the market place. The concessional terms may be one or more of the following: a lower interest rate below (the most common) deferred repayments.

What is the difference between a loan a grant and a concessional loan?

Short Answer. Grants are funds provided with no expectation of repayment. Concessional loans , or soft loans, have more generous terms than market loans. Some limit or restrict the countries in which they can be used, or they require a portion of funds be spent on equipment or services from donor countries.

What are concessional sovereign loans?

These are loans that are extended on terms substantially more generous than market loans. The concessionality is achieved either through interest rates below those available on the market or by grace periods, or a combination of these. Concessional loans typically have long grace periods.

Are concessional loans ODA?

Grants, loans and other flows entering the calculation of the ODA grant equivalent measure are referred to as ODA flows (see notes 1 and 2). b) is concessional in character. The ODA grant equivalent measure is calculated for ODA flows, as defined above.

What is a loan without interest called?

A soft loan is a loan with no interest or a below-market rate of interest. Also known as “soft financing” or “concessional funding,” soft loans have lenient terms, such as extended grace periods in which only interest or service charges are due, and interest holidays.

Is a grant a loan or free?

Most types of grants, unlike loans, are sources of free money that generally do not have to be repaid. Grants can come from the federal government, your state government, your college or career school, or a private or nonprofit organization.

Are grants refundable?

Financial grants are non-refundable funds provided by non-profit or government donors to finance individuals, charitable projects or small enterprises that provide a particular service or aim to serve a specific group people.

What is non concessional debt?

The provision of grants and debt relief to eligible ADF countries is intended to help bring their debt to sustainable levels and create fiscal space for priority development expenditures.

Which countries are eligible for ODA?


  • North of Sahara. Algeria. Egypt.
  • North and Central America. Antigua and Barbuda. Belize.
  • South America. Argentina. Bolivia.
  • South and Central Asia. Afghanistan. Armenia.
  • Middle East. Iran. Iraq.
  • Far East Asia. Cambodia. China (People’s Republic of )
  • EUROPE. Albania. Belarus.
  • Who provides ODA?

    Data on ODA flows are provided by the 29 OECD members of the Development Assistance Committee (DAC). Official development assistance (ODA) is defined as government aid designed to promote the economic development and welfare of developing countries.

    Which is the best description of a concessional loan?

    Estimates Memorandum 2017-50 Risk Pricing for New Policy Proposals. A concessional loan is a loan made on more favourable terms than the borrower could obtain in the market place. A concessional loan provided by government basically has two embedded components; a ‘market-based loan’ as well as a ‘concessional loan’ component.

    What are sources of grants or concessional financing exist to?

    The availability of free or cheap capital in the form of a grant or concessional loan can be a huge boon to mini-grid project developers facing financing challenges. While there are several sources of grants and concessional financing, the funds are limited, and competition can be considerable.

    Are there any grants or concessional financing in Kenya?

    AFD and the United Kingdom’s Department for International Development (DFID) have created a £30-million green mini-grid program for Kenya. Climate Investment Funds (CIF) The $8.3 billion CIF provides concessional financing in 72 countries for projects to reduce greenhouse gas emissions, including energy projects.

    How are concessional loans classified in AASB 9?

    AASB 9 Paragraphs 4.1.5 and 4.2.2 allow entities to designate financial assets and liabilities on initial recognition as measured at FVPL where it reduces or removes a measurement inconsistency. On initial recognition, the market-based loan and the loan discount components that make-up the concessional loan are separated.