FFL terms and conditions

Key terms and conditions for sovereign loans from ADB window

Loan Type

Fully Flexible Loan


1.  Regional member countries (RMCs) classified as Blend or ADB countries and public sector entities with a sovereign guarantee from Blend or ADB countries.

2.  Under the 2014 amendment to the Credit Policy, ADF countries accessing on a case by case basis ADB resources will use also the Fully Flexible Loan.

Loan Currency

USD, EUR, ZAR, JPY or any other approved Bank lending Currency


Up to 25 years inclusive of Grace Period

Grace period

Up to 8 years

Average Loan Maturity*

Function of the maturity, grace period and amortization profile


Consecutive semi-annual and equal payments after grace period or customized

Interest Rate

Base Rate +Funding Cost Margin+ Lending Margin + Maturity Premium

This Interest Rate will be floored to zero.

Base Rate


Floating Base Rate ( 6-month  USD LIBOR, 6m JPY LIBOR or 6m EURIBOR  reset each 1st February and 1st August; 3m JIBAR resets  each 1st February, 1st May, 1st August and 1st November)

A free option to exchange the Floating Base rate against a Fixed Base Rate is available.

Funding Cost Margin

The Bank funding cost margin as determined for each currency  every 1st January and 1st July and applied to the Base Rate each 1st February and 1st August for USD, EUR and JPY and each 1st February, 1st May, 1st August and 1st November for ZAR

Lending Margin

80 basis points (0.8%) since 1st September 2016.

Maturity Premium

-  0% if Average Loan Maturity ≤ 12.75 years

-  0,10% if 12.75 < Average Loan Maturity ≤ 15

-  0,20% if Average Loan Maturity >15 years

Front-end fees

0.25% of the loan amount due at loan effectiveness and payable at the earliest of (i) up to 60 days from Loan Effective Date or (ii) at the time of first disbursement.

The borrower has the option to pay the Front-end Fee: (i) either from its own resources, or (ii) by deducting its amount from the loan proceeds at the first disbursement.

Commitment fees

0.25% per annum of the undisbursed amount. Commitment fees start accruing 60 days from signature of the loan agreement and are payable on interest payment dates (even before any disbursement).

Option to convert the Base Rate**

In addition to the free option to convert the Floating Base Rate into a Fixed Base Rate, the borrower may reconvert the Fixed Base Rate to Floating or refix it on part or full disbursed amount.

Transaction fees are payable.

Option to cap or collar the Base Rate**

The borrower may cap or set both cap and floor on the Floating Base Rate to be applied on part or full disbursed amount.

Transaction fees are payable.

Option to convert loan currency**

The borrower may convert the loan currency for both undisbursed or disbursed amounts in full or part to another approved lending currency of the Bank.

Transaction fees are payable.


In case of prepayment  of a loan with a Fixed Base Rate or any other conversion feature, any costs incurred by the Bank in adjusting or terminating the conversion will be charged to the borrower in addition to transaction fees.

*A calculator is available to allow borrower simulate different amortisation profiles and determine Average Loan Maturity. Please contact FIST2@afdb.org .

**Conversion options and transaction fees are subject to the Bank Conversion Guidelines available online here