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Eligibility: CDB gives priority to nationals of Commonwealth Caribbean Member Countries or companies which are effectively controlled by them. However, in special cases, loans may be made to companies controlled by non-nationals if the project is heavily oriented to extra-regional export markets or where a reasonable share of equity is offered to, or held by, nationals of CDB Member Countries.
The CDB will seek well-capitalized projects with proven management and established markets. CDB will normally only consider project proposals which have a maximum debt:equity ratio of 50% and debt service coverage ratio of not less than 2:1 based on conservative income statement projections. Projects should result in the expansion of general economic activity in the host country (through the introduction of a new industry or technology or the generation of employment). The project's impact on social equity and environmental protection will also be a decisive factor.
For more information on the CDB's lending policies, see:
http://www.caribank.org/Policies.nsf/lendpolicy/$File/lendpolicy.pdf
and
http://www.caribank.org/Policies.nsf/Direct-Lending?OpenPage
Types of Projects Funded: The CDB focuses its lending on investments in agriculture, forestry, manufacturing, mining, tourism, and infrastructure, although most private sector loans in recent years have been for on-lending by regional financial institutions. Special consideration will be given to projects that increase exports to non-regional countries and use local raw materials. CDB will provide funding for expansions and new ventures.
Financial Instruments:
Loans: CDB will normally lend up to 40% of the project cost. The CDB can provide loans in the range of $USD 750,000 to $USD 6 million (or 15% of CDB ordinary reserves). Interest rates are currently set at 7.5% although this figure is reviewed semi-annually. Loan maturities are for a period of up to 14 years including a grace period of up to 5 years, depending on the projected cash flow pattern of the project.
Equity: The CDB is authorized to take equity positions in enterprises in certain borrowing member countries (Groups 1 and 2) subject to the same limitations as in the case of loans
The Group 1 countries are The Bahamas, Barbados, Cayman Islands, and Trinidad & Tobago
The Group 2 countries are Anguilla, Antigua & Barbuda, and the British Virgin Islands.
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