An A Loan Participation (“ALP”) is an effective exposure management tool which IFC uses to reduce its risk exposures – dollar for dollar – to a client, country or sector. An ALP is created through the partial sale of an A Loan to commercial banks or other financial institutions and is governed by a Participation Agreement, much like the agreement used for IFC B Loans. As in a B loan, IFC remains the lender of record for the entire A Loan. An ALP participant shares all project risks with IFC and has the same benefits of a traditional B Loan participant.
Since 2002, IFC has sold twenty ALPs valued at over US$424 million to over twenty-two financial institutions. Through this mechanism, IFC has reduced its exposure constraints in Argentina, Brazil, India, Romania, Russia, Thailand & Turkey.
For further details on ALPs, please contact Sharmila Hardi, Manager & Global Head of Syndications.