What is Concessionality and How is it Calculated?

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For blended concessional finance projects mandated on or after October 1st, 2019, IFC has agreed to include in its public disclosure documents the level of concessionality provided as a percentage of total project cost.

Concessionality figures are based on the difference between (i) a “reference price” (which can be a market price, if available; the price calculated using IFC’s pricing model, which comprises three main elements of risk, cost and net profit; or a negotiated price with the client) and (ii) the “concessional price” being charged by the blended concessional finance co-investment.

Total project cost refers to the amount it will take to construct or expand a plant, facility or building or the operations of a company - including equity financing and debt. In transactions with financial institutions, total project cost or value refers to the size of the loan or the amount of investment in a capital markets issuance. To ensure clarity, the disclosure language will also provide the total project cost figure.

The table below provides historical information on the average concessional levels in a sample of IFC’s blended concessional finance portfolio (FY10-FY19). The figures below (as of October 2019) may not be reflective of future trends as they are based on a limited sample size, and likely to change as IFC introduces new products to expand the portfolio in low income, fragile and conflict affected countries, where blended concessional finance resources have become available at scale only in the last couple of years. These historical figures will be updated yearly to include data points for the most recent fiscal year ended and to reflect any refinements to the calculation approach and methodology.




Average concessional level as a percentage of total project cost


Overall

3.6%

 

By product

 


Senior Debt

3.0%


Sub Debt

2.5%


Guarantee

4.5%


Equity

1.9%


Performance Incentive

2.0%


Local Currency

9.4%

 

By industry



Manufacturing, Agriculture and Services

3.9%


Financial Institution Group

4.0%


Infrastructure and Natural Resources

3.0%


Disruptive Technology and Funds

0.8%

 

By Blended Finance facility theme



Agriculture

4.3%


Climate

3.0%


SME finance

1.9%


Gender finance

1.1%


Low income & fragile and conflict affected states

5.9%