ADB - Methods of PaymentsADB - Methods of Payments
ADB Project Procurement: The Asian Development Bank (ADB) observes its Loan Disbursement Handbook (https://www.adb.org/documents/loan-disbursement-handbook) and international commercial practices for payment methods.
Payment methods, including bank transfer, letter of credit and certified check, and the timing of payment, are normally specified in the contract between the primary contractor and the borrowing government. Subsequently, primary contractors settle their payment obligations to their subcontractors and suppliers according to 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 (https://www.export.gov/ccg).
ADB-funded contracts for supply of goods are generally paid in full upon delivery and inspection except for installation and commissioning contracts, where a portion of the payment may be made after the supplier has complied with all its contract obligations. Utilizing letters of credit is encouraged to assure prompt payment to the supplier. In major contracts for equipment and plant, provision is made for suitable advances; in contracts with long duration, progress payments are usually observed during the period of manufacture or assembly.
For consulting services, payment provisions, including amounts to be paid, payment schedule and procedures, are agreed upon during negotiations and subsequently entered into a contract. The contract should further provide for the payment of financing charges if payment is delayed due to client’s fault beyond the time allowed in the contract. Payments may be made at regular intervals (usually for time-based contracts) or for agreed outputs (for lump sum contracts). Payments for advances exceeding 10% of the contract amount are normally backed by advance payment guarantees.
ADB Institutional Procurement: ADB pays the contract price for its headquarters’ and country offices’ procurement requirements according to the agreed terms and payment method specified in the contract. By and large, contractor’s request for payment is made to ADB in writing with the invoice specifying the services performed and related goods delivered. ADB usually remits payment of the contract price through electronic transfer.
ADB Private Sector Financing: ADB financing and risk mitigation assistance to private sector-led projects or business activities in developing member countries disburses funds according to the contractual agreement with ADB, which also includes loan, investment, issuing bank, or revolving credit agreement. The disbursement may also be made through reimbursement to the investee company for expenditures incurred, or to confirming banks against letters of credit in favor of suppliers.
The recipients of ADB’s private sector financing select their own contractors and suppliers, following ADB’s Anticorruption Policy. Payment to contractors adheres to the accepted payment methods of the respective country where the project is implemented. Visit the Country Commercial Guide (https://www.export.gov/ccg) of the country of your interest to learn more about their methods of payment.
U.S. Government Trade Financing Instruments: U.S. exporters may consider short-, medium-, and long-term export credit, finance and insurance products/programs offered by the Export-Import Bank of the United States, which is the official export credit agency of the United States tasked to assist in financing the export of U.S. goods and services to international markets.
Meanwhile, the Overseas Private Investment Corporation offers loans, guarantees, and political risk insurance for American exporters. Products, services and programs of these organizations are available in many ADB borrowing member countries. 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.
Payment methods, including bank transfer, letter of credit and certified check, and the timing of payment, are normally specified in the contract between the primary contractor and the borrowing government. Subsequently, primary contractors settle their payment obligations to their subcontractors and suppliers according to 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 (https://www.export.gov/ccg).
ADB-funded contracts for supply of goods are generally paid in full upon delivery and inspection except for installation and commissioning contracts, where a portion of the payment may be made after the supplier has complied with all its contract obligations. Utilizing letters of credit is encouraged to assure prompt payment to the supplier. In major contracts for equipment and plant, provision is made for suitable advances; in contracts with long duration, progress payments are usually observed during the period of manufacture or assembly.
For consulting services, payment provisions, including amounts to be paid, payment schedule and procedures, are agreed upon during negotiations and subsequently entered into a contract. The contract should further provide for the payment of financing charges if payment is delayed due to client’s fault beyond the time allowed in the contract. Payments may be made at regular intervals (usually for time-based contracts) or for agreed outputs (for lump sum contracts). Payments for advances exceeding 10% of the contract amount are normally backed by advance payment guarantees.
ADB Institutional Procurement: ADB pays the contract price for its headquarters’ and country offices’ procurement requirements according to the agreed terms and payment method specified in the contract. By and large, contractor’s request for payment is made to ADB in writing with the invoice specifying the services performed and related goods delivered. ADB usually remits payment of the contract price through electronic transfer.
ADB Private Sector Financing: ADB financing and risk mitigation assistance to private sector-led projects or business activities in developing member countries disburses funds according to the contractual agreement with ADB, which also includes loan, investment, issuing bank, or revolving credit agreement. The disbursement may also be made through reimbursement to the investee company for expenditures incurred, or to confirming banks against letters of credit in favor of suppliers.
The recipients of ADB’s private sector financing select their own contractors and suppliers, following ADB’s Anticorruption Policy. Payment to contractors adheres to the accepted payment methods of the respective country where the project is implemented. Visit the Country Commercial Guide (https://www.export.gov/ccg) of the country of your interest to learn more about their methods of payment.
U.S. Government Trade Financing Instruments: U.S. exporters may consider short-, medium-, and long-term export credit, finance and insurance products/programs offered by the Export-Import Bank of the United States, which is the official export credit agency of the United States tasked to assist in financing the export of U.S. goods and services to international markets.
Meanwhile, the Overseas Private Investment Corporation offers loans, guarantees, and political risk insurance for American exporters. Products, services and programs of these organizations are available in many ADB borrowing member countries. 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.