Discusses the most common methods of payment, such as open account, letter of credit, cash in advance, documentary collections, factoring, etc. Includes credit-rating and collection agencies in this country. Includes primary credit or charge cards used in this country.

Project Procurement

Primary contractors will find that when the IDB lends money to a member country government for a project, the responsibility for the implementation of the project, award and administration of contracts, and facilitation of payments, rests with the borrower. Forms of payment, including bank transfer, letter of credit and certified check, and the timing of payment are stipulated in the contract between the contractor and the borrowing government. Subcontractors and suppliers to the primary contractor are typically paid by the primary contractor, again subject to methods and terms agreed upon by the parties involved. To learn about conditions in countries of interest to your firm see the “Methods of Payment” section of each country’s Country Commercial Guide.

U.S. exporters may wish to consider using the export credit insurance programs offered by the Export-Import Bank of the United States, the official export credit agency of the United States charged with the mission of assisting in financing the export of U.S. goods and services to international markets.

Corporate Procurement

The IDB itself procures consulting and advisory services, often in relation to evaluating projects for financing or performing Technical Cooperation (TC) work. Procurements are made via competition run through the BEO Procurement portal. Tenders and contracts are denominated in U.S. dollars or local currency. Payments are made by the IDB directly to the consultant. Types of payment include Lump Sum Fee, Lump Sum Fee Plus Reimbursable Expenses, Time-Based Remuneration plus Reimbursable Expenses, and more than one of these terms may be used in a given contract. Payments are made by bank transfer to the account listed on the consultant’s invoice.
 

Private Sector Solutions

The IDB Invest or the private sector lending arm of the Bank utilizes a number of different financial vehicles, including loans, equity investments, venture capital positions, and others. Payments to American firms involved in a project depend on the related contractual agreements; wherever possible IDB Invest denominates its operations in local currency.
 

U.S. Government trade Financing Instruments

Several U.S. Government entities offer trade financing instruments to help American exporters engage in challenging overseas markets with increased confidence. The Export-Import Bank of the United States (EXIM) offers short-, medium-, and long-term export credit, finance and insurance products to American exporters. The Overseas Private Investment Corporation (OPIC) offers loans, guarantees, and political risk insurance for American exporters. Products, services and programs of these organizations are available in many IDB borrowing member countries. American firms participating in IDB funded projects should familiarize themselves with these programs, and which are available in each country of interest.


 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.