IBRD Lending Rates and Spreads Applicable on or after July 1, 2026

Overview & Synopsis

This memorandum provides the quarterly update of International Bank for Reconstruction and Development lending rates and spreads for rate setting between July 1, 2026 and September 30, 2026, under the standard loan pricing defined in the Bank Policy and Directive Financial Terms and Conditions of Bank Financing, and confirms that the Average Funding Spreads for the IBRD Flexible Loan are positive 46 basis points for loans denominated in United States dollars and other currencies, positive 14 basis points for loans denominated in euros, and zero basis points for loans denominated in Japanese yen; reference rates currently used are the Secured Overnight Financing Rate for United States dollars, the Sterling Overnight Index Average for pounds sterling, the Tokyo Overnight Average Rate for Japanese yen, and the Euro Interbank Offered Rate for euros. The update explains that the IBRD Flexible Loan Variable Spread passes through funding costs and comprises the applicable reference rate, the average funding spread recalculated quarterly, the contractual lending spread set at signing and reviewed annually, and a maturity premium differentiated by borrower pricing group and average maturity; the maturity premium schedule is aligned with country classifications updated annually, and a complete listing of total spreads by currency, maturity band, and pricing group is provided for application during the quarter. The memorandum notes policy and implementation changes relevant to pricing, including the introduction of the Short Maturity Loan with a seven year final maturity and a twenty basis point maturity discount effective October 11, 2024, availability of a Step up Loan feature for eligible Investment Project Financing and Program for Results effective December 11, 2025, application of maturity premiums for loans with a Deferred Drawdown Option based on average repayment maturity effective April 23, 2026, and eligibility for Group A pricing for countries qualifying for the Climate Resilient Debt Clause effective October 15, 2024; average funding spread calculations exclude the shareholder version of Hybrid Capital Debt, and for legacy variable spread loans with fixed reference rates in United States dollars or other currencies the applicable spread for this quarter is set at three basis points to reflect the difference between the average funding spread and the six month fallback adjustment. The memorandum concludes that the updated spreads will govern lending rates for the quarter, the terms of the International Development Association non concessional financing remain aligned with Group A terms of the IBRD Flexible Loan, and borrowers will be notified of applicable rates and spreads for interest periods beginning on or after July 1, 2026.