The operations of the Bank shall be conducted in accordance with the following principles:
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(i) The operations of the Bank shall provide principally for the financing of specific
projects, including those forming part of a national, sub-regional or regional development
programme. They may, however, include loans to, or guarantees of loans made to, national
development banks or other suitable entities, in order that the latter may finance
specific development projects whose individual financing requirements are not, in
the opinion of the Bank, large enough to warrant the direct supervision of the Bank;
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(ii) In selecting suitable projects, the Bank shall always be guided by the provisions
of sub-paragraph (ii) of Article 2 of this Agreement;
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(iii) The Bank shall not finance any undertaking in the territory of a member if that member
objects to such financing;
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(iv) Before a loan is granted, the applicant shall have submitted an adequate loan proposal
and the President of the Bank shall have presented to the Board of Directors a written
report regarding the proposal, together with his recommendations, on the basis of
a staff study;
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(v) In considering an application for a loan or guarantee, the Bank shall pay due regard
to the ability of the borrower to obtain financing or facilities elsewhere on terms
and conditions that the Bank considers reasonable for the recipient, taking into account
all pertinent factors;
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(vi) In making or guaranteeing a loan, the Bank shall pay due regard to the prospects that
the borrower and its guarantor, if any, will be in a position to meet their obligations
under the loan contract;
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(vii) In making or guaranteeing a loan, the rate of interest, other charges and the schedule
for repayment of principal shall be such as are, in the opinion of the Bank, appropriate
for the loan concerned;
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(viii) In guaranteeing a loan made by other investors, or in underwriting the sale of securities,
the Bank shall receive suitable compensation for its risk;
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(ix) The proceeds of any loan, investment or other financing undertaken in the ordinary
operations of the Bank or with Special Funds established by the Bank pursuant to paragraph
1 (i) of Article 19, shall be used only for procurement in member countries of goods
and services produced in member countries, except in any case in which the Board of
Directors, by a vote of the directors representing not less than two-thirds of the
total voting power of the members, determines to permit procurement in a non-member
country or of goods and services produced in a non-member country in special circumstances
making such procurement appropriate, as in the case of a non-member country in which
a significant amount of financing has been provided to the Bank;
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(x) In the case of a direct loan made by the Bank, the borrower shall be permitted by
the Bank to draw its funds only to meet expenditures in connexion with the project
as they are actually incurred;
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(xi) The Bank shall take the necessary measures to ensure that the proceeds of any loan
made, guaranteed or participated in by the Bank are used only for the purposes for
which the loan was granted and with due attention to considerations of economy and
efficiency;
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(xii) The Bank shall pay due regard to the desirability of avoiding a disproportionate amount
of its resources being used for the benefit of any member;
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(xiii) The Bank shall seek to maintain reasonable diversification in its investments in equity
capital; it shall not assume responsibility for managing any entity or enterprise
in which it has an investment, except where necessary to safeguard its investments;
and
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(xiv) The Bank shall be guided by sound banking principles in its operations.