A mixed credit is a mix of a loan and a government grant, and is applied for financing of large infrastructure projects (min. contract amount of DKK 100m) in certain developing countries.In Denmark the mixed credit program is administered by Danish Sustainable Infrastructure Finance, DSIF, a DANIDA unit anchored at IFU – Investment Fund for Developing Countries.
Mixed credits can be applied for financing of sustainable and SDG-compliant infrastructure projects in developing countries with a BNP per capita below USD 3,995 (2020) and with a Danish representation, i.e. presently in Afghanistan, Bangladesh, Burkina Faso, Egypt, Ethiopia, Ghana, India, Indonesia, Kenya, Mali, Morocco, Myanmar, Niger, Nigeria, Pakistan, Palestine, Philippines, Somalia, Tanzania, Uganda, Ukraine and Vietnam.
The repayment period of the loan is 10 years from commissioning of the project, and the grant element is between 35% or 50% depending on country. The grant is disbursed by DSIF to the lender bank, and will cover all interest and EKF guarantee premium. The balance grant, if any, will be applied for reduction of the loan principal.
The procedures for application and DSIF’s project appraisal etc. are somewhat heavy and time consuming. However, they are very clear and well described. And don’t forget that the kind of projects we are dealing with are also heavyweight.
But, as always: Make sure to start financing talks as early as possible !
Hos MWA har vi praktisk erfaring med etablering af blandede kreditter – også den del der handler om at eksportøren får passende sikkerhed for sine betalinger.
For more on mixed credits visit DSIF’s website here.