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Terms and conditions for the International Development Assistance Program

Authorities to Approve the Projects under the International Development Assistance Program

Treasury Board has approved increased authorities to approve projects under the International development assistance program to Minister of Development. These authorities are subject to legislation and regulations, and must comply with departmental and central agencies policies and directives.

Disclaimer

In accordance with section 6.1 of the , departments are required to make public descriptions of all programs, including application processes as well as eligibility requirements and assessment criteria for potential applicants. This document conforms to the directive’s requirements for the International Development Assistance Program. 

This version of the document slightly differs from the original document. In all circumstances, the official document shall prevail.

Table of contents

1. Effective date

The terms and conditions for international development assistance (hereinafter the “terms and conditions”) took effect on April 1, 2012. The changes made in the 2017 version of this document reflect the amalgamation of the Canadian International Development Agency and the Department of Foreign Affairs and International Trade, effective as of June 26, 2013. Today, the department is commonly known as 抖淫视频Footnote 1, which is also the title used throughout this document.

2. Authority and financial instruments

2.1 Preliminary notes

The purpose of this document is to establish the terms and conditions for 抖淫视频’s (hereinafter also called “the department”) International Development Assistance Program. These terms and conditions address the requirements described in the Treasury Board of Canada Secretariat’s Policy on Transfer Payments as well as the supporting directive, with topics specific to 抖淫视频’s vote wording.

2.2 Grants and contributions vote and budget

The Foreign Affairs, Trade and Development Act establishes the responsibilities relating to international development, poverty reduction and humanitarian assistance. Authorities to make the grants listed in the Government of Canada’s annual Estimates and contributions for international development assistance and other specified purposes are provided by the Appropriation Acts.

The Minister of International Development and La Francophonie has been designated as the lead minister responsible for Canada’s official development assistance. As such, the minister is required, as per the Official Development Assistance Accountability Act, to report the total annual amount spent by relevant Government of Canada ministers providing official development assistance.

2.3 Financial instruments

This section lists the financial instruments that may be used to disburse the International Development Assistance Program grant and contribution funds, which are granted by Parliament through Appropriation Acts. This section also provides information on the context of their use.

When choosing a financial instrument, the following is considered:

The choice between a grant and a contribution is determined by the legal status of the recipient and the nature of the investment initiative, as well as the degree of assurance and oversight deemed necessary to achieve the results and safeguard the use of public funds in a manner that is sensitive to risks.

2.3.1 Grant funds

a) Grant agreements / arrangements

Grant agreements / arrangements are used when the eligibility criteria and information obtained from the recipient before a payment is issued provide assurance that the grant will be used for the purpose for which it is being provided. Generally, recipients are established organizations with solid financial structures that maintain appropriate resource capacities, have a proven record of accomplishment for delivery of programs or projects, and have risk management and results reporting structures acceptable to 抖淫视频.

Other donor countries are the only countries eligible for grants.

2.3.2 Contribution funds

a) Contribution agreements / arrangements
Contribution agreements / arrangements are conditional transfer payments generally used to contribute to approve proposals from eligible recipients. They are appropriate when the department deems it necessary to monitor progress and results, receive an accounting of the use of funds from the recipient, and have the right to carry out a recipient audit or to request some other type of certification or audit assurance from the recipient. Contribution agreements / arrangements may include specific provisions when the risk associated with the recipient implementing the program or project can be managed by additional oversight.

b) Procurement contracts
The purpose of this section is to set out the particular governance framework for procurement contracts funded with international development assistance contribution funds. This framework differs depending upon the entity that will be the contracting authority.

  1. Contracts by 抖淫视频
    抖淫视频 can enter into Crown procurement contracts as the contracting authority for acquisitions in support of a development initiative or its implementation. Such contracts are entered into either with an executing agency or with a contractor where the acquired goods, services or construction services will be delivered to recipients.

    Crown procurement contracts are governed by the Treasury Board Contracting Policy rather than by these terms and conditions. As a result, 抖淫视频 must adhere to the Government Contracts Regulations, seek Treasury Board approval when the value of the contract exceeds the thresholds set out in Appendix C of the policy, and manage funds for advance, progress and final payments in accordance with the policy. Consequently, the clauses regarding cash management of contribution agreements/arrangements set forth in these terms and conditions do not apply. More precisely, where an advance payment is issued under a Crown procurement contract, all expenditures incurred by the executing agency or contractor must affect the grants and contributions vote in the fiscal year in which the advance was issued.

  2. Contracts by a recipient country or another organization
    The Minister of International Development and La Francophonie can transfer procurement responsibility to a recipient country or another organizationFootnote 2, whereby goods, services and/or construction services will be purchased by the recipient country or the organization (as the contracting authority) on behalf of a predefined ultimate entity of the recipient country (including its government).

    Such procurement contracting will be subject to the recipient country or the other organization’s own practices and regulations. However, 抖淫视频 will have first assured that these practices and regulations are consistent with the principles of the Treasury Board Contracting Policy and the Government Contracts Regulations (particularly fairness, openness and transparency in the bidding and selection process), and that they are in accordance with the anti-corruption provisions for procurement contained in the United Nations Convention Against Corruption, the Organisation for Economic Co-operation and Development Anti-Bribery Convention and the Inter-American Convention Against Corruption. The transfer of procurement responsibility will take place within the context of balancing potential benefits against assessed risks. Appropriate fiduciary risk mitigation measures will be applied, where required.

    In exceptional circumstances, the agreement/arrangement entered into with a recipient country may include provisions where the department will pay directly the contractor from whom the recipient country or another organization purchases goods, services and/or construction services.

  3. Contracts by an executing agency
    When the Minister of International Development and La Francophonie enters into a contract with an executing agency in support or for the implementation of a development initiative, the following conditions will apply:
    • the contract between the Minister of International Development and La Francophonie and the executing agency constitutes a Crown procurement contract and as such is subject to the Treasury Board Contracting Policy as set out in section 2.3.2(b)(i) of these terms and conditions;/li>
    • this Crown procurement contract will contain provisions requiring the executing agency to conduct any procurement it undertakes for delivery of goods, services or construction services to recipients using procurement practices that are consistent with the principles set out in the Treasury Board Contracting Policy and the Government Contracts Regulations;
    • for any procurement undertaken by the executing agency, either the executing agency, the recipient country, the organization or the ultimate recipient will be the technical authority for the procurement, and as such, has the responsibility for defining the technical specifications of the requirement, the statement of work and evaluation criteria for the bids as they relate to the technical aspects of the requirement. In exceptional circumstances where the department is the technical authority or effectively behaves like the technical authority (while being careful not to establish an “agency relationship”), the Treasury Board Contracting Policy and its attendant regulations and directives will apply.

c) Administrative arrangements
Administrative arrangements are entered into where the department collaborates with other government departments, Crown corporations or other levels of Canadian government (provincial, territorial, municipal, etc.) to obtain expertise or capacity to support program delivery. Exceptionally, administrative arrangements may be appropriate to use with multilateral institutions.

d) Letters of agreement
Letters of agreement are used where the department deems appropriate to compensate an individual, organization or institution for the eligible expenditures they will incur (e.g. the travel costs of a volunteer speaker)Footnote 3.

3. Transfer payment program

3.1 Purpose and objectives

The objective of the department’s International Development Assistance Program is to reduce poverty for those living in countries where 抖淫视频 engages in international development.

This objective is in line with the intent of the Official Development Assistance Accountability Act, which states that expenditures reported to Parliament as official development assistance must contribute to poverty reduction, take into account the perspectives of the poor, and be consistent with international human rights standards. Furthermore, official development assistance may be provided for the purposes of alleviating the effects of a natural or man-made disaster or other emergency occurring outside Canada. The majority of the International Development Assistance Program’s activities are consistent with the Act. However, this transfer payment program does not preclude activities falling outside the scope of the Act.

According to Canadian government policy decisions, programming with respect to the following is inappropriate and, as such, is excluded from these terms and conditions:

3.2 Program activities, expected results and performance indicators

The following tables illustrate the expected results and related performance indicators for the International Development Assistance Program’s activities.

Program activity: Fragile countries and crisis-affected communities
Expected resultsPerformance indicators

Increased access to essential health services and education by the more vulnerable female and male children and youth in crisis-affected communities.

  • Percentage of under-five children receiving appropriate and timely treatment for malaria and other major diseases.
  • Percentage of vulnerable or crisis-affected girls and boys enrolled in school.

Increased access to income opportunities including jobs and development of micro- and small enterprises, particularly for vulnerable and marginalized women, men and youth.

  • Percentage of economically active women, men and youth employment.

Enhanced responsiveness of humanitarian assistance to address the immediate needs of crises-affected populations.

  • Percentage of Consolidated Appeals funding requirements that are met.
Program activity: Low-income countries
Expected resultsPerformance indicators

Increased sustainable agricultural production by rural poor women, men and youth.

  • Annual production of agricultural goods in targeted regions of 抖淫视频 interventions.
  • Rate of adoption by farmers (male/female) of new farming techniques and new crop varieties in targeted regions of 抖淫视频 interventions.

Increased health services to mothers, newborns and children under five.

  • Percentage of live births attended by an accredited health professional.

Increased accountability of public and civil institutions to respond to the needs of women, men and children.

  • Average program rating (on a five-point scale) of progress of 抖淫视频 low-income countries of focus toward achieving this result.
Program activity: Middle-income countries
Expected resultsPerformance indicators

More competitive local economies, especially for micro, small and medium-sized, and women-led enterprises in poorer areas.

  • Level of integration of micro, small, and medium-sized enterprises in local and regional markets per country.

Increased access to quality education for marginalized female and male children and youth, in particular those living in remote communities.

  • Total net enrolment ratio in primary education, both sexes.

Strengthened citizen participation to sustain social and economic progress.

  • Average program rating (on a five-point scale) of progress of 抖淫视频 middle-income countries of focus toward achieving this result.
Program activity: Global engagement and strategic policy
Expected resultsPerformance indicators

Increased effectiveness of Canadian development cooperation through engagement with, and investment in, multilateral and global organizations, to address humanitarian and development challenges.

  • Progress in global food security, health, education, and employment rates in developing countries.

Increased ability to advance Canada's development priorities in Canada and globally.

  • Evidence of Canadian influence (e.g., G8 summits, Organisation for Economic Co-operation and Development /Development Assistance Committee, the media) in shaping the international development agenda.
  • Coherence between aid and non-aid policies (e.g., foreign, defence, environment and immigration).
Program activity: Canadian engagement for development
Expected resultsPerformance indicators

Improved health and education services for marginalized women, men, girls and boys.

  • Ratings (on a five-point scale) of 15-20 representative initiatives of how Canadian partners have helped transform basic service delivery in underserved communities.

Enhanced income opportunities, including rural livelihoods for poor women, men and youth.

  • Ratings (on a five-point scale) of 20 representative initiatives of how Canadian partners have contributed to increased income opportunities and livelihoods for poor women, men, youth in rural and urban areas.

Increased engagement of Canadians as global citizens in international development initiatives.

  • Ratings (on a five-point scale) of at least 5 participants for each of 10 representative partners' initiatives regarding the value of their participation for increasing their engagement and knowledge of international development.

4. Description of programming classes

The programming classes described hereafter constitute the means for attainment of 抖淫视频’s International Development Assistance Program results. More precisely, in order to meet its program objectives, the department has developed three specialized classes of grants and contributions. While each class may be selected as circumstances warrant by the department’s branches, each branch is specialized in the use of a specific class, and, as a result, is considered the primary user due to the nature of their work.

4.1 Bilateral programming class

Bilateral programming, country-to-country, enables the Government of Canada to support recipient countries by:

Canada’s efforts are negotiated and agreed with the recipient country and are usually documented through a memorandum of understanding or exchange of letters.

In order to provide a rationale and focus for bilateral activities, bilateral programming takes place within the context of a:

These documents are developed in accordance with Canadian government policy decisions, the objectives and priorities of 抖淫视频, with the overall management framework of the International Assistance Envelope and taking into account discussions with the recipient country.

For example, support under program-based approaches can be provided through a range of modalities. This aid comprises budget support (general and sector), pooled funds and projects, including technical assistance that could result from dialogue with a recipient country. There are numerous ways of engaging in development cooperation based on the principles of coordinated support for a locally owned development program. These means include national development strategies, sector or thematic programs and organizational programs.

The department may engage individuals or firms under professional service contracts to provide technical assistance services in a recipient country.

抖淫视频 may fund education and training for persons from recipient countries. Benefits and allowances paid to these individuals while in Canada are administered in accordance with the Guide to Managing Award Holders in Canada (Development Stream).

4.2 Multilateral programming class

Multilateral programming supports sustainable development and humanitarian assistance mainly through multilateral institutions by:

Multilateral institutions include international financial institutions, United Nations organizations and specialized agencies, global organizations (which often have a thematic focus, such as health or food security), humanitarian organizations, and organizations of the Commonwealth and La Francophonie.

Addressing global challenges requires a robust multilateral system. The multilateral system provides the Canadian International Development Assistance Program with a number of advantages. It provides additional reach by improving the lives of people across a wide range of developing countries and sectors. It helps build consensus, establish global norms and standards and provide intellectual leadership in a number of technical programming areas (e.g. health, agriculture and environment). The multilateral system possesses program delivery expertise particularly in offering coordinated and timely humanitarian assistance and addressing the complex challenges of fragile countries. Finally, the multilateral system can leverage the Government of Canada’s priorities by increasing international programming from other donors in these priority areas.

Multilateral programming takes place within the context of:

These documents are developed in accordance with Canadian government policy decisions and the objectives and priorities of 抖淫视频, and with the overall management framework of the International Assistance Envelope.

Multilateral programming is comprised of two distinct sub-classes: multilateral institutional funding and international humanitarian assistance.

4.2.1 Multilateral institutional funding sub-class

The multilateral institutional funding sub-class supports sustainable development and strengthens the effectiveness of the international system through:

4.2.2 International humanitarian assistance sub-class

The purpose of the international humanitarian assistance sub-class is to save lives, alleviate human suffering and maintain the human dignity of those affected by conflicts and natural disasters. In response to a humanitarian crisis, financial support may be provided for the delivery of assistance that includes, but is not limited to, food and non-food items, medical care, shelter, water, sanitation, the protection of civilians and assistance to refugees and internally displaced persons, and the deployment of relief supplies and technical experts. In addition, international humanitarian assistance may be used to promote Canadian humanitarian policy priorities.

When specific approval is given by the Minister of International Development and La Francophonie, international humanitarian assistance may be provided in response to a humanitarian crisis in a developing country / territory or a country in transition normally excluded from Canada’s official development assistance.

Programs, projects or activities excluded from this sub-class are:

4.3 Partnerships with Canadians programming class

Partnerships with Canadians programming represents the International Development Assistance Program’s primary link to the Canadian public, given its main objective is to engage Canadians in international development. Partnerships with Canadians normally consist of investments in partners’ initiatives that reflect the department’s development and public engagement objectives. It involves relationships based on shared objectives, resources and accountability. In most cases, these partners are Canadian civil society organizations, the private sector and publicly funded institutions.

Partnerships with Canadians engage Canadians through support for international development initiatives and through raising awareness, participation and education on international development.

Partnerships with Canadians are comprised of two distinct sub-classes: partners for development and global citizens.

4.3.1 Partners for development sub-class

The partners for development sub-class aims to leverage the development expertise and initiative of Canadians by funding meritorious proposals put forward by Canadian organizations to deliver development results on the ground and contribute to poverty reduction. This sub-class creates enhanced opportunities for small and large development organizations to undertake focused and results-oriented development programming.

The partners for development sub-class provides financial support for development initiatives that are consistent with Canada's official development assistance priorities, policies and objectives. Eligible recipients are typically Canadian civil society organizations, the private sector and publicly funded institutions.

Financial support provided through the partners for development sub-class normally adheres to cost-sharing principles.

抖淫视频 reserves the right to limit funding, including institutional support, to a certain percentage of the recipient's revenues.

This sub-class also includes initiatives through which awards are provided to candidates from a recipient country to develop the organizational capacity of the country.

4.3.2 Global citizens sub-class

The primary objective of the global citizens sub-class is to engage and mobilize Canadians, as global citizens, to participate in international development initiatives. The program focuses on three areas: public awareness, education and knowledge, and youth participation.

The global citizens sub-class showcases results and best practices in international development by: bringing young leaders together; sharing expertise and lessons learned on development challenges and results; engaging Canadians and the people of the recipient country in innovative development initiatives; and linking recipient country partners to Canadian expertise. All global citizens initiatives support communication, education or mobilization activities that proactively encourage and enable the Canadian public to understand, support and become engaged in international development, while emphasizing the importance of Canada’s involvement in the developing world. Projects and programs under the global citizens sub-class will lead to: increased public awareness of international development; increased opportunities for improving knowledge and understanding of international development and its impacts; and increased opportunities for active engagement of Canadians in international development activities.

Authorized activities must conform to the policies and priorities governing Canada’s official development assistance and provide authorized support to initiatives that focus on activities in recipient countries as well as in Canada.

5. Eligible recipients

Recipient eligibility and entitlement criteria established herein are at the class or sub-class level of programming. Where narrower focus is necessary to reflect specific program or project objectives, programming guidelines may be more restrictive.

Excluded from eligibility is any recipient:

5.1 Bilateral programming class

Eligible recipients are:

5.2 Multilateral programming class

5.2.1 Multilateral institutional funding sub-class

Eligible recipients are:

5.2.2 International humanitarian assistance sub-class

Eligible recipients are:

Consideration for eligibility is based on the possession of:

Humanitarian organizations and institutions, in particular, must:

5.3 Partnerships with Canadians programming class

5.3.1 Partners for development sub-class

Eligible recipients are:

5.3.2 Global citizens sub-class

Eligible recipients are:

6. Eligible expenditures

The department may enter into a financial instrument where resulting activities are consistent with the purpose and objectives of its transfer payment program, and are primarily for the benefit of people in the recipient country. More precisely:

The recipient’s eligible expenditures will normally consist of the following:

Moreover, expenses incurred to build or strengthen an eligible recipient’s knowledge of development issues, or to identify development needs and strategiesFootnote 4, may be charged to the department’s grants and contributions vote where they are primarily for the benefit of people in the recipient country.

Examples of such expenditures incurred by the recipient are:

A recipient’s costs to support delivery of a 抖淫视频-funded program or project implicating further distribution of funds to ultimate recipients will be charged against the grants and contributions vote.

Also eligible is an amount under a procurement contract funded from the grants and contributions vote, where such an amount represents best value, established by one of the following:

7. Total Canadian government funding and stacking limits

7.1 Sources of funding

Canadian government fundingFootnote 5 under a grant or contribution agreement/arrangement will not exceed one hundred percent (100%) of the total eligible expenditures for a project.

The department also takes into account other sources of funding available to the recipient including funding received from:

The amount of a proposed grant or contribution must consist of the minimum required to further the attainment of the objectives of the program or project and expected results. For such purposes, 抖淫视频 will examine all project proposal budgets before approval and at various points of the project life cycle, to ensure that only necessary funds are made available.

All sources of funding (monetary or in-kind contributions) made toward a project must be considered.

7.2 Recovery of excess funds

At any time during the project life cycle, if it becomes clear that a recipient has received more funding than required to meet the original project objectives, the department will proceed with one or a combination of the following actions:

8. Method used to calculate the amount of a grant or a contribution

The amount of a grant or contribution consists of the estimated costs necessary to meet the objectives of the project. A project may require entering into several financial instrumentsFootnote 6. The department uses various tools and resources (e.g. evaluation grids, checklists, internal or external expertise) to determine the amount of each financial instrument.

Prior to entry into a financial instrument, which will result in an expenditure of public funds, the funding decision must be analyzed and clearly documented. The depth of analysis carried out should be appropriate for the dollar value and complexity of the project and related risks.

9. Maximum amount payable

The department operates under unpredictable situations and all of the International Development Assistance Program’s grants and contributions are governed by this single set of terms and conditions. This makes it difficult to reasonably determine the maximum amount payable to a recipient annually or in total, or the maximum payable with respect to any initiative or project. For such reasons, in February 2009, an exceptionFootnote 7 to the Treasury Board Directive on Transfer Payments for grants and contributions program was granted.

10. Cash management and basis of payment

The Minister of International Development and La Francophonie holds an exception to clauses 6.4.2 and 6.4.4 of the Treasury Board Directive on Transfer Payments, which allows:

10.1 Grant agreements / arrangements

Instalments or single payments of grants may be made. Generally, the decision will be in light of the fiduciary risk assessment both at the recipient and project level. Under exceptional circumstances, such as a pressing emergency due to humanitarian crisis, single payments will be made to ensure efficient program delivery, notwithstanding fiduciary risk assessment.

10.2 Contribution agreements / arrangements

10.2.1 Advance payments

Advance payments of contributions may be made if it is clear that undertaking a project would result in considerable cash flow issues for the recipient. Allocation of advance payments will be based on the estimated cash flow requirements of the recipient as agreed to by the department.

Where advance payments are deemed necessary, the period covered by the advance and the frequency of reporting required from the recipient are established based on the department’s evaluation of the fiduciary risk both at the recipient and project level.

10.2.2 Progress payments and final payments

Generally, progress payments and/or final payments of contributions are made to recipients based on reimbursement of eligible expenditures and/or achievement of pre-determined performance expectations or milestones in accordance with the provisions set out in the agreement/arrangement. Where it is cost-efficient, the department may use a costing formula. For example, to establish the value of specific program / project implementation costs, thus ensuring fairness to recipients through consistency, pre-defined travel allowances and kilometric rates established by participating bargaining agents and public service employers are used as references. 抖淫视频 may also use internally established rates based on its analysis of historical costs for similar initiatives, for instance, those of recipients or other donor countries.

Performance expectations, milestones and/or costing formulas are initiative-specific and are determined upon assessment of the application for funding or project conception.

Payment is made upon satisfactory completion of identified activities and/or once costs have been incurred by the recipient and accepted by the department as being eligible expenditures.

10.2.3 Holdback

The department will retain up to 15% of the total value of a contribution agreement / arrangement when such action is deemed appropriate based on the nature of the investment and fiduciary risk assessment. The holdback is paid following receipt, from the recipient, of final accounting of the contribution and acceptance by the department of the final report as specified in the contribution agreement / arrangement. As a condition to release a holdback or final payment, recipients are also required to certify that all financial obligations to subcontractors, employees and suppliers in respect to 抖淫视频’s contribution have been fully discharged.

11. Information required to assess funding applications and criteria for assessment

11.1 Information required

In general, applicants are required to submit:

The department might also require applicants to submit additional information for the purpose of its evaluation of the fiduciary risk both at the recipient and project level. Specifically, eight core risk factors are assessed:

Recipient level

Project level

11.2 Criteria for assessment

In addition to being eligibleFootnote 8 for funding, the applicant must:

The above criteria must also be used to validate whether recipients of grants are still eligible for such transfer payments.

Assessment criteria include the following:

Review committees, which include working level advisors (e.g. thematic and sector specialists), undertake the assessment and formulate recommendations to the appropriate management level holding approval authorities according to the internal delegation instrument.

12. Information required for financial and performance reporting

12.1 Grant agreements / arrangements

Reporting from recipients on results achieved will normally consist of the recipient’s standard annual report. Notwithstanding, 抖淫视频 may also require the recipient to submit a narrative report (that may include disbursement status) on a particular program.

12.2 Contribution agreements / arrangements

Progress of the recipient in achieving the project objectives and results as well as otherwise fulfilling the conditions of the contribution agreement / arrangement are monitored regularly as part of due diligence.

Reporting must be sufficient to:

Frequency of reporting is established in compliance with departmental policies and defined in the contribution agreement / arrangement.

Financial monitoring provides ongoing assurance that reimbursements claimed by recipients are based on eligible expenses actually incurred for project-related activities. The department requires reporting on all expenditures.

Performance monitoring tracks progress using selected indicators. If results are not being realized as intended, decisions will be taken as appropriate to the specific project.

13. Official languages

The department is committed to respecting its obligations under the Official Languages Act. Specifically, 抖淫视频 provides the following bilingual services to facilitate access to both linguistic communities:

Where applicable, 抖淫视频 will also ensure that recipients respect the spirit and intent of the Act and that communications with and services to the public in Canada are provided in both official languages, in accordance with the spirit and intent of Part IV and Part VII of the Act.

14. Redistribution of contributions

Where funds are to be further distributed, 抖淫视频 will ensure that the initial recipient or executing agency has independence in the choice of ultimate recipients, with minimal guidance from the department, and will not be acting as an agent of the government in making these distributions. Provisions to this effect will be included in the financial instrument.

15. Repayable contributions

Contributions made under these terms and conditions are non-repayable. Where the department enters into a contribution agreement with for-profit organizations, it is not intended to allow the recipient to generate profits or increase the value of the business.

16. Intellectual property

For any work created for the needs of an ultimate recipient under a contribution agreement, 抖淫视频 requires a licence or an assignment of rights to any recipient designated by 抖淫视频 as well as a licence to 抖淫视频 for proposals pertaining to the design, conceptualization, planning or implementation of the project or program, the implementation plan and work plans, narrative, financial and technical reports and any other subject-matter used to define or manage the project or program.

For any work created as part of a procurement contract, 抖淫视频 will comply with the provisions of the Treasury Board Policy on Title to Intellectual Property Arising Under Crown Procurement Contracts.

17. Disposal of assets

Where it is planned to acquire assets as part of a contribution agreement / arrangement or a procurement contract, it will be specified in the financial instrument that 抖淫视频 must approve the asset disposal plan, although these assets must never be the property of the Crown.

18. Other conditions and requirements

抖淫视频 assesses whether funding would trigger any obligation under the Canadian Environmental Assessment Act. Where applicable, the appropriate form is completed and included as part of the approval documentation.

19. References

Appendix A – Definitions

Advance payment (paiement anticipé) – Payment, specifically provided under an agreement/arrangement that is made prior to the fulfilment of the performance obligations, as stipulated in the agreement/arrangement, that demonstrates that the criteria are met to justify the payment. An advance payment of contribution is not an accountable advance in the context of Section 38 of the Financial Administration Act and of the Accountable Advance Regulations.

Agency relationship (relation d’agence) - A consensual relationship created by contract or by law where one party, the principal, grants authority to another party, the agent, to act on behalf of and under the control of the principal to deal with a third party. An agency relationship is fiduciary in nature and the actions and words of an agent exchanged with a third party bind the principal.

Appeal (appel) - A tool used by aid organizations to plan, coordinate, fund, implement and monitor their activities in major sudden onset and/or complex emergencies that require a system-wide humanitarian response.

Applicant (demandeur) - Is an entity that has applied for a transfer payment.

Country in transition (pays en transition) - A country that is not eligible for official development assistance under the Organisation for Economic Co-operation and Development / Development Assistance Committee lists, but in which 抖淫视频 engages in international development.

Developing country or territory (pays ou territoire en développement) - A country or territory that is eligible for official development assistance under the Organisation for Economic Co-operation and Development / Development Assistance Committee lists.

Executing agency (agence d’exécution) - An entity contracted by 抖淫视频 or the recipient country to support and/or implement a development initiative that is funded from the grants and contributions vote.

Fiduciary risk (risque fiduciaire) - The risk that funds may not be used for their intended purposes, may not be properly accounted for; and/or, goods and services delivered are not commensurate with funds transferred.

Fiscal year (exercice financier) - The period beginning on April 1 in one year and ending on March 31 in the next year, or if agreed to by 抖淫视频 and stipulated in the financial instrument, the recipient’s fiscal year.

Fragile countries (pays fragiles) - Countries that face particularly severe development challenges with complex national and regional contexts given weak institutional capacity, poor governance, political instability, and ongoing violence or a legacy of past conflict.

In-kind contribution (contribution en nature) - A contribution provided by the recipient to the project in the form of goods or services to which a dollar value can be attributed, that would otherwise be purchased and paid for by the recipient to achieve the project results. The cost of goods and services contributed in-kind must be eligible under the agreement/arrangement and must be recorded at a fair value, as agreed to by 抖淫视频.

International Assistance Envelope (enveloppe de l’aide internationale) - Within the context of fiscal planning, the International Assistance Envelope is Canada’s main instrument for coordinating its international assistance, including official development assistance. The International Assistance Envelope funds 抖淫视频’s International Development Assistance Program as well as international assistance components of other government departments.

Low-income / middle-income countries (pays à faible revenu / revenu intermédiaire) - Countries struggling with pervasive poverty or facing specific challenges in attaining self-reliance. Classification of a country’s economy is based on its Gross National Income per capita according to World Bank thresholds.

Pooled funds (mise en commun de fonds) - A financing mechanism for development assistance negotiated amongst donors and with the recipient country. Pooled funding involves donor oversight upon release of funds to the recipient and in terms of financial reporting, specific to the contributions made. Initiatives involving grants to a trust fund of a multilateral or regional organization and initiatives involving grants or contributions to or from another donor (delegated cooperation) are forms of pooled funding.

Program/project (programme/projet) – An initiative or a group of activities for which approval has been obtained which may result in one or more financial instruments being entered into. For the purpose of this document, the terms “program” and “project” are synonyms. Nevertheless, in the broader context, the International Development Assistance Program is a single “program” which is governed by these terms and conditions.

Recipient (bénéficiaire) - Is an entity that either has been authorized to receive or has received a transfer payment. In these terms and conditions, the terms “initial recipient” and “ultimate recipient” may be used to distinguish actors taking part in the transfer payment process.

Recipient country (pays bénéficiaire) - Developing countries or territories as well as countries in transition. The term “recipient country” does not include other donor countries.

Repayable contributions (contributions remboursables) - Contributions issued under a transfer payment program for which the terms and conditions or a Treasury Board Decision clearly establish:

Transfer payment (paiement de transfert) - Is a monetary payment, or a transfer of goods, services or assets made, on the basis of an appropriation, to a third party, including a Crown corporation, that does not result in the acquisition by the Government of Canada of any goods, services or assets. Transfer payments under the International Development Assistance Program are categorized as grants or contributions and do not include investments, loans or loan guarantees.

Appendix B – Rationale for exception to the Treasury Board Directive on Transfer Payments

Historically, 抖淫视频 has demonstrated that its International Development Assistance Program objectives would be compromised by certain requirements of the Treasury Board Policy on Transfer Payments published in June 2000, namely clauses 7.6.1 to 7.6.6 inclusively and 8.3.3. The Minister of International Cooperation deemed it essential to seek an exception to the aforementioned clauses which was granted on March 22, 2007.

In October 2008, a revised Treasury Board policy and supporting directive on transfer payments came into effect. Equivalent provisions under the Treasury Board Directive on Transfer Payments are included in sections 6.4.2 and 6.4.4.

The rationale for this exception is provided below:

The local ownership principle of aid effectiveness demands that development strategies, if they are to be sustainable, must be developed by recipient countries and reflect their priorities. Local ownership has come to mean ownership of development programs not only by governments, but also by civil society, such as regional and local non-governmental organizations, private sector firms and community-based organizations. The wide array of donor practices for delivering development assistance generates unproductive transaction costs for recipient countries and draws down on their limited capacity as they try to comply with the different administrative requirements of donors. To provide a timely and effective Canadian response to conflicts and natural disasters in recipient countries, single sum grant payments, rather than instalment payments are made. To this effect, the benefits accrued from Canada’s reputation among the multilateral institutions and from Canada’s ability to respond efficiently to disasters more than offset any costs associated with lost interest on any portion of the payment paid in advance of need.

Appendix C – Repayable Contributions

Table of Contents

C1 Introduction

This appendix outlines the Terms and Conditions (Ts&Cs) for repayable contributions (RCs) under the Ts&Cs for the International Development Assistance (IDA) program at GAC.

These Ts&Cs should be read in conjunction with the Ts&Cs for the IDA program, which govern the non-repayable transfer payments issued under this program. The provisions in this appendix supersede the corresponding provisions of the Ts&Cs for the IDA program only when RCs constitute a component of a development project.

GAC provides RCs where resulting project activities are consistent with the purpose and objectives of the IDA program and are primarily for the benefit of people in the recipient country or countries. They provide GAC with broader access to for-profit organizations, support the use of innovative and effective funding structures, and mobilize private sector investment in international development projects thereby helping to address the Sustainable Development Goals (SDGs) funding gap.

C2 Repayable Contributions

A RC is funding that may require repayment from the recipient depending on whether the contribution is conditional or unconditional in nature. Situations where a RC must be used include when:

However, where the contribution or part of the contribution supporting such project activities is under $100,000Footnote 9, a non-repayable instrument can be used.

A conditionally repayable contribution (CRC) is used when the contribution is repayable (in part or in full) only when conditions specified in the contribution agreement/arrangement materialize. A CRC is used when financial risks are high and/or cannot be quantified.

An unconditionally repayable contribution (URC) is used when the contribution is repayable (in part or in full) and GAC expects a repayment.  A URC is used when financial risks are generally lower and can be quantified. The terms of the agreement/arrangement describe when repayments are due by indicating specific dates, particular times or circumstances. URCs can only be used to fund climate financing and international assistance innovation projects/initiatives.

In the context of international development assistance, it is not anticipated that GAC would receive a financial return over and above the repayment of its contribution except in rare instances where the underlying investment(s) supported perform exceptionally well. In this case, the amount paid to GAC could exceed the initial contribution (on a net present value basis). That is, while ex ante, the funding is expected to be concessional (as per the ), ex post, there is a possibility that the Government of Canada could realize a positive return.

C3 Effective Date

The appendix governing RCs in support of the IDA program take effect on October 31, 2022.

C4 Definitions

Definitions to be used in the interpretation of this appendix are in .

C5 Eligible recipients

Eligible recipients for RCs, notwithstanding the programming class of the IDA program, are:

In addition, for climate financing and international assistance innovation projects/initiatives, eligible recipients include:

C6 Eligible activities and expenditures

C6.1 Eligible activities

C6.1.1 Funding structure related activities

In the blended finance context, funding provided for international development projects in the form of RCs is used to partially shield investors against certain perceived or real risks and capital losses, and/or to improve expected returns on investments, thereby making risk-adjusted returns sufficient for them to proceed while achieving development impacts. By attracting these private sources of funding for development purposes, GAC is able to catalyze investments that would not otherwise occur and leverage its contribution.

GAC’s contribution towards blended finance projects normally support the four development finance structures below or a combination thereof.

  1. Risk or loss protection
  2. Concessional debt
  3. Patient capital
  4. Early provision of equity capital

The funding structure of a given project must be consistent with the risk appetite and funding envelope and includes risk sharing.

Table 1 – How GAC’s contribution can support blended finance structures

1.  Risk or loss protection2.   Concessional debt3.  Patient capital4.  Early provision of capital

For example:

Contribution is used by recipient as financial “guarantees” to absorb losses in a funding structure.

For example:

Contribution is used by recipient to provide debt with longer maturity, longer grace period or lower interest rate where warranted.

For example:

Contribution is used by the recipient in a subordinated position with regards to other stakeholders and thereby, used to defer returns or reflows until other investors/
funders receive a threshold return.

For example:

Contribution is used by recipient to provide capital to a fund that serves as an anchor investment with the goal of mobilizing other investors to invest in projects or funds with a high likelihood of breaking even or generating profit (returnable capital).

While there are references to financial guarantees, debt and equity capital in the capital structures, in a transfer payment context, GAC does not issue financial guarantees, loans or take equity positions in these projects/funding structures. Recipients use RCs to do so as an eligible activity. These funding structures are not mutually exclusive (e.g. funding can serve both as an anchor investment and as risk/loss protection) and all require risk sharing..

C6.1.2 Complementary activities

A project for which a component is conducted under or in support of a RC agreement/arrangement may also include other activities that are not subject to repayment but are consistent with the purpose and objectives of the IDA program and are primarily for the benefit of people in the recipient country. These activities are in the scope of the Ts&Cs for the IDA program as opposed to this appendix.

For climate financing and international assistance innovation projects/initiatives with a relatively small non-repayable component supporting technical assistance (e.g. under 15%), eligible and reasonable expenditures can be subject to this appendix.

C6.2 Eligible expenditures

Consistent with the risk appetite, the following types of eligible expenditures, may be funded by GAC via a RC in support of the activities listed above. The expenditures are:

The contribution can also serve as funding in order for the recipient to provide financing through loans/debt capital, financial guarantees, etc. 

Excluded from eligibility are:

C7 Total Canadian government funding and stacking limits

Canadian Government funding for the RC component of an agreement/arrangement will not exceed one hundred percent (100 %) of the total eligible expenditures or funding for eligible activities.

In determining funding levels, GAC takes into account the potential project reflows that stem from the project’s funding structure which may be reinvested over the course of the project. It also takes into account the impact that GAC’s contribution will have in the project’s funding structure with an aim to encourage investments in international development projects by offering mitigation against real and/or perceived risks and/or by enhancing expected returns on investment for potential investors; thereby catalyzing incremental private sector investment that would not otherwise occur. All sources of funding (monetary or in-kind contributions) made toward a project must be considered. As such, GAC takes into account other sources of funding available to the recipient including funding from:

GAC examines all project proposal budgets/financial reports before project approval and at various points in the project’s life cycle to ensure that only necessary funds are made available to the recipient.

C8 Multi-year agreements/arrangements

Projects with a RC component require multi-year agreements/arrangements that exceed traditional 3-5 years Gs&Cs timelines, considering that the vast majority of blended finance projects span multiple years. Indeed, blended finance initiatives can range from five to 25 years but their duration can sometimes exceed this time period where funding structures involve patient capital or very long term investment horizons.

Such agreements/arrangements are subject to demonstration by the recipient that multi-year instruments are required to attain the project’s objectives given multi-year commitments will be undertaken or that it is necessary for the catalysing of funding from the private sector and other sources.

In many cases, the contribution serves to attract other investors and GAC’s contribution serves to provide capital to a recipient earlier than others as a form of anchor investment. It also demonstrates confidence in the project and, in select cases, can enable recipients to enter into initial investments to better demonstrate project viability upon formal launch.

The agreement/arrangement duration will be commensurate with the period of expected reflows from the projects funded by the recipient.

C9 Maximum amount payable

The maximum amount payable for the total project value is set as per the corresponding programming class in the Ts&Cs for the IDA program.

C10 Cash management and basis of payment

Funding under a RC is disbursed on an as required basis in accordance with criteria established with the recipient and agreed by GAC and set out in the funding instrument, which may include:

Costing formulas may also be applied to determine the disbursement schedule where it is most practical and economical. In such cases, reasonable market rates, or other benchmarks, generally recognized in the industry, subject to a validation by GAC’s experts, are used for benchmarking purposes.

The funding provided to the recipient can be subject to a holdback.

C11 Information required to assess funding applications

In general, applicants are required to submit:

Applicants should also explain in their proposal how their initiative aligns with the prevailing Footnote 10, namely:

  1. Anchor blended finance use to a development rationale;
  2. Design blended finance to increase the mobilisation of commercial finance;
  3. Tailor blended finance to local context;
  4. Focus on effective relationships for blended finance;
  5. Monitor blended finance for transparency and results.

GAC might also require applicants to submit additional information for the purpose of its evaluation of the fiduciary risk both at the recipient and project level, as well as for the purpose of assessing whether the proposal is consistent with the funding envelope.

Through their proposals and other reference material, applicants must provide the information necessary to assess projects.

C12 Information required for financial and performance reporting

Progress of the recipient in achieving the project objectives and results, as well as otherwise fulfilling the conditions set out in the agreement/arrangement, is monitored regularly as part of due diligence.

Reporting must be sufficient to:

Frequency of reporting is established in compliance with GAC policies and procedures as well as the risk assessment. Reporting requirements are subsequently defined in the agreement/arrangement.

The agreement/arrangement sets out the reporting requirements which can include:

The financial reporting requirements enable GAC to monitor the activation of repayment conditions and/or compliance with the repayment terms in order to ensure that the recipient proceeds with the repayments as required as per the terms of the agreement/arrangement.

C13 Repayments

Under the RC component of an agreement/arrangement, the reflows resulting from the use of the funding as well as the funding itself are subject to partial or full repayment to the Receiver General.

Repayment terms are proposed in funding applications, evaluated during the assessment of the application and negotiated at the agreement/arrangement stage. The agreed upon repayment terms are clearly set out in the agreement/arrangement.

Given the numerous variations of blended finance projects pertaining to emerging and frontier markets in recipient countries, repayment terms are tailored to each circumstance. Personnel with relevant thematic, finance and sector expertise within GAC and/or engaged by GAC, are actively involved in the development and negotiation of repayment terms. Documented processes also provide guidance in this area.

C13.1 Factors that determine whether repayment is to be made

In the case of a CRC, repayment (in part or in full) is provisional upon specific conditions materializing including lower risks than expected leading to residual funds. In the case of a URC, the contribution is repayable (in part or in full) and must be expected. For both instruments, when it is determined that a repayment is necessary, this amount will be recognized as debt due to the Crown.

GAC uses various tools and resources (e.g. financial models, external benchmarks evaluation grids, checklists, as well as internal and/or external expertise) to determine whether a URC or a CRC is the appropriate funding instrument. GAC assesses the risk associated with the project/funding structure, and the ability to quantify expected repayment and the likelihood of repayment.

These tools are also used to establish the specific conditions that may trigger repayment for a CRC. The factors that determine whether repayment for a particular project is required are:

C13.2 Determining the amount of repayments

The determination is based on audited financial statementsFootnote 12 and mandatory financial reports as per the agreement/arrangement. The amount to be repaid is based on the following factors:

The repayment “schedule/structure” is based on criteria that reflect the RCs role and relative seniority in the financing structure, with appropriate repayment terms to support risk-adjusted returns necessary to catalyze private sector investment.

Under normal circumstances, given the development objective of funded projects, repayments will not exceed the amount of the original contribution and can take into account the time value of money. However, when RCs have succeeded in driving recipient returns on investment beyond targeted rates, and extra-normal profits are generated for the recipient, or where the perceived risks do not materialize, as expected, repayments to GAC may include both the recovery of the original contribution and a return.

C13.3 Establishing the schedule and terms for repayments

Repayments start as early as possible, taking into account the project objectives, the role of GAC’s funding in the funding structures, the intended development impacts and the requirement for repayment. The schedule and other terms related to repayment are documented during the development of the agreement/arrangement and are based on:

Where there is a distribution waterfall, reflows to the recipient generally take place in a pre-established specific order in which various rounds of individual repayments are due to the project stakeholders and, as such, the repayment schedule reflects the fact that repayments take place on a tiered basis.

For CRCs, the repayment schedule is rarely based on a fixed time schedule since repayments of capital and interest to the recipient from project-level investments typically become available upon a first liquidity event or termination of the funding vehicle.

Depending on factors such as the funding structure and the market conditions, repayment of GAC’s CRC (after losses and agreed expenditures are taken into account) occurs no later than the achievement of relevant project reflows exceeding an established threshold per annum of the overall portfolio investment value or following an applicable first liquidity event.

For URCs, the repayment schedule can be either a defined repayment schedule or have fixed repayment dates and be reflows-based. Reflows-based repayment schedules have a series of dates at a regular frequency as to when repayments may be forthcoming to GAC, depending on actual reflows received by recipients from investments, and consistent with the terms of the agreement/arrangement.

Depending on the funding structures supporting blended finance projects, specific factors and repayment terms are also available in Annex B.

C13.4 Establishing if repayment is required for CRCs

In the case of a CRC, to determine if repayment is required for a given project, GAC will review financial reports and statements provided by the recipient in conjunction with the reporting terms set out in the agreement/arrangement to determine whether financial or other repayment conditions have been triggered. Where applicable, they also confirm the amount and schedule for repayments based on the terms set out in the agreement/arrangement.

C14 Disposal of assets

Where it is planned that the recipient will acquire assets as part of the CRC component of an agreement/arrangement, it will be specified in the agreement/arrangement that GAC must approve the asset disposal plan, although these assets must never be the property of the Crown. Exceptionally, for programming that falls under the climate finance program or International Assistance Innovation Program’s mandate, assets can become the property of the Crown in specific circumstances, subject to the applicable regulations.

Disposal of assets provisions exclude residual financial assets and a repayment of such residual funds is expected. Unless the contribution agreement states otherwise.

C15 Annex A – Definitions

Blended finance (financement mixte) – The strategic use of development finance for the mobilisation of additional finance towards sustainable development in developing countries, with ‘additional finance’ referring primarily to commercial finance.

Capital (base en capital) – Portion of funding provided to recipients for their use in project structures which may involve the recipient making investments, , issuing loans or offering financial guarantees for the purposes of attaining development results. 

Concessional debt or financing (prêt ou financement assorti de conditions avantageuses) – Funding or loans that are extended on terms more generous than market funding. The concessionality is achieved through terms (e.g., interest rate, ranking, etc.) that are more generous than those available on the market. In the RC context, although GAC’s contribution is invested by the recipient alongside other project stakeholders’ capital, it is characterised as concessional financing through the absorption of risk, thus is intended to mobilize incremental resources towards sustainable development and does not constitute a traditional investment. Its ultimate objective is to achieve more development.

Conditionally repayable contribution (contribution remboursable avec conditions) – CRCs are contributions that are repayable (in part or in full) only when conditions specified in the contribution agreement/arrangement materialize. CRCs are used when financial risks are high and/or cannot be quantified. For example, CRCs are used to catalyze additional investment into more risky countries/sectors/initiatives. As such, CRC funding can be highly catalytic, reflecting the willingness to risk the entire contribution to mobilize investment that supports development objectives.

Debt capital (capitaux d’emprunts) – Type of capital whereby lenders make loans to borrowers. Borrowers repay lenders the principal and interest until the loan is paid off. The lender has a legal right to promised cash flows. In the context of RCs issued by GAC, the lenders are the recipients or financial intermediaries.

Development finance (financement de développement) – Development finance is public and private finance that is being deployed with a development mandate.

Development finance institution or DFI (institution de financement du développement) – National and international development finance institutions are specialized development banks or subsidiaries set up to support private sector development in developing countries. DFIs can be bilateral, serving to implement their government’s foreign development and cooperation policy, or multilateral, acting as private sector arms of International Finance Institutions (IFIs) established by more than one country. They are usually majority-owned by national governments and source their capital from national or international development funds or benefit from government guarantees. This ensures their creditworthiness, which enables them to raise large amounts of money on international capital markets and provide financing on very competitive terms.

Development Finance Structures (Structures de financement en appui au développement) – These are innovative and formal funding mechanisms or vehicles designed to mobilize financing in support of sustainable development goals. Such structures can be configured in several different ways through which funds can flow uni- or bi-directionally and generally involve multiple private and public sector stakeholders with a view to mobilize funds, as well as pool and share investment risks in areas where impediments to direct investment exist, such as in emerging markets.

Distribution waterfall (cascade de distribution) – A distribution waterfall is the hierarchy delineating the order in which funds will be distributed as underlying investments are sold in a funding structure. In the blended finance context, in order to attract investors, the distribution waterfall may ensure that different types of investors/funders have priority of payment compared to others within the same funding structure. It specifies, for example, that an investor will receive his or her initial investment plus a preferred return before other funders can receive any returns. Such an arrangement increases the investor's confidence in the development finance structures and its potential profitability for them.

Emerging markets (marchés émergents) – Emerging markets generally do not have the level of market efficiency and regulation as advanced economies, but have a financial infrastructure including financial institutions and stock exchanges.

Financial guarantee (garantie financière) – The use of guarantees (a promise to fulfill an agreement in the case the main contracting party fails to do so) provides private sector and other investors/entities with the assurance they need to invest financial and non-financial capital into projects with significant development impacts. In the context of RCs issued by GAC, the guarantors are the recipients or financial intermediaries.

Frontier markets (marchés frontières) – Less advanced markets from the developing world. Frontier markets are sometimes considered a subset of emerging markets. They are also known as "pre-emerging markets".

Funder (bailleur de fonds) – or entity a as a contribution, , or (including ).

Investor (investisseur) – Any entity or person who commits capital with the expectation of financial returns.

Loss protection (protection contre les pertes) – Loss protection is a form of financing that reduces the risk for investors. A loss protection is similar to a limited guarantee, essentially reducing the risk of financial losses to investors.

Patient capital (capital patient) – Patient capital (long-term capital) is a form of financing whereby an investor/funder is willing to make some type of investment/contribution to a business for a long period of time (often more than ten years or until a particular objective is met). Patient capital has equity-like features (such as long term capital), but it may not carry with it ownership interest.

Reflows (retours de fonds) – As part of a project/program’s objectives, recipient or intermediaries revenues generated from investments, financial guarantees or loans (including repayment of principal) as well as revenues from other sources. Interest income earned by the recipient on advance payments for other complementary activities are not considered reflows; specifically, interest income earned by a recipient on a non-repayable contribution advance payment is accounted for and used against the project’s activities as if it was part of GAC’s original contribution.

Repayable contribution (contribution remboursable) – Repayable contributions are contributions all or part of which are repayable. They can be conditionally repayable or unconditionally repayable. Exceptionally, the Government of Canada could realize a return on this funding, over and above its contribution.

Return (rendement) – The return consists of the income and the capital gains relative to an investment. It is usually quoted as a percentage.

Returnable capital (capital remboursable) – Returnable capital is used in contexts where the project is likely to break even or generate a profit in the short term, in which case the recipient responsible for implementing the project returns some or all of the initial contribution to the Government of Canada, and possibly a return, as per the repayment terms of the agreement/arrangement.

Subordination (subordination) – Refers to investors/funders that are lower seniority ranks, and as a result, are amongst the last in terms of repayment.

Time value of money (valeur de l’argent dans le temps) – Is the concept that money available at the present time is worth more than the same amount in the future.

Unconditionally repayable contribution (contribution remboursable sans conditions) – URCs are contributions that are repayable (in part or in full) and for which GAC expects a repayment. A URC is used when risks are generally lower and can be quantified. The terms of the agreement/arrangement describe when repayments are due by indicating specific dates, particular times or circumstances. URCs can only be used to fund climate financing and international assistance innovation projects/initiatives.

C16 Annex B – Illustrative funding structures and repayment terms (triggers), for CRCs

Funding structuresRecipient’s role in funding structureFootnote 13
(to absorb risk, thereby catalyzing investments)		Use of the CRCCRC repayment termsFootnote 14Factors for CRC repayment amount (illustrative)

Risk or loss protection

Providing guarantees such as:

  • Partial financial-loss protection
  • Currency risk mitigation
  • Loan guarantee programs

The amount for the guarantee is paid up front alongside other investments or as required. If disbursed from the outset into a segregated account, it can only be drawn down under certain pre-agreed loss conditions.

Repayment may take place at the end of the project if GAC’s contribution exceeds the recipient’s share of the fund’s cumulative losses and agreed net prorated costs (i.e. if the funds were not used to absorb losses).

Recipient guarantee amount – eligible costs (where eligible costs are cumulative losses + agreed net costs as per agreement terms) = amount of repayment. Nil if negative.

This is generally in the context of a partial-risk guarantee.

Concessional debt or financing

Providing debt or other financing with concessional (more favourable than market) terms or rates such as:

  • Longer maturity
  • Longer grace period
  • Lower interest rate

The funding is used for financial sustainability reasons or to support a revolving loan fund.

Repayment may take place once senior debtholders have been repaid or at the end of the project if the contribution was used to establish a loan fund for ultimate recipients.

Fund balance – amounts due to senior debtholders = amount of repayment to recipient. The amount repaid to the recipient will be the amount repayable by the recipient to GAC up to the CRC’s value.

Patient capital and early provision of capital

Providing patient capital or early capital to a funding structure.

The funding is used to provide patient capital, which allows SMEs to access funding by being able to issue shares that are attractive in the market.

There is a deferral of reflows to the recipient related the contribution until other investors/
funders receive a threshold return. As there are generally limited exit strategies available for investors in frontier markets and given that a fixed repayment schedule could lead to premature divestment decisions, recipient investment using GAC’s contribution improves SMEs economic growth potential.

The funds are provided early in a funding structure to attract potential investors to provide capital to invest in projects with a high likelihood of breaking even or generating profit (returnable capital).

CRC repayment occurs no later than:

  • the achievement of relevant project reflows exceeding an established threshold per annum of the overall portfolio investment value; or
  • following an applicable first liquidity event.

Annual fund reflows – (amounts due to debt holders + amount due to senior equity holders) = amount of repayment to recipient. The fund’s annual repayment to the recipient will be the annual amount repayable to GAC by the recipient up to CRC value + potential return.

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