IFC-arranged parallel loans give borrowers access to debt financing from multiple development institutions in a single package. IFC’s Master Cooperation Agreement (MCA) creates an efficient co-lending platform that has delivered more than $10 billion to over 30 developing-country firms in the last decade. Under the MCA, IFC has built a broad global network of development institutions who work together to offer borrowers a streamlined solution.
Private lenders that are ineligible for IFC’s B Loan program may also participate in parallel loans, including to support local currency syndications efforts. Public institutions that seek to deepen cooperation with IFC on upstream project development and offer IFC opportunities to participate in loans where they are lead arranger may join the Joint Collaboration Framework Agreement (JCFA).
How It Works
MCA signatories and other lenders follow a standard co-lending process where IFC is lead arranger and each lender provides a parallel financing tranche. IFC parallel loans rely on documentation templates, including a Common Terms Agreement, that significantly reduce costs and increase efficiency for all parties.
Benefits to Lenders
- Increased deal flow through IFC’s global origination capacity
- Access to IFC’s due diligence and structuring and restructuring skills and global presence
- Time and cost savings
- All lenders, including IFC, share the same rights and obligations
- In portfolio, IFC may occasionally act as administrative agent on behalf of parallel lenders
Benefits to Borrowers
- Enables loans with longer tenors
- Completes financial package
- Introduces new banking relationships
- IFC's "stamp of approval"
- IFC's environmental and social leadership
