Financing Explicit Contingent Liabilities Through IDA
This paper proposes an innovative approach to financing contingent liabilities using IDA to purchase a contingent loan with hard triggers, on concessionary IDA terms. The payout is used to buy down the cost of a commercial loan (such as IDA’s Scale-Up Facility) to concessionary IDA terms.
Key Findings
Key Terms Used In This Report
Possible financial obligations that only become real if specific future events occur.
A predefined threshold that activates payments or actions within risk financing mechanisms.
The network of global organisations funding crisis prevention, preparedness and response.
Financial flows refer to the movement of funds for disaster risk reduction (DRR) and response, covering planned and unplanned sources.
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