Aid and export credits
The Arrangement provides disciplines for tied aid to limit the use of concessional financing for projects that might be supported through commercial financing. In addition, the Participants have committed to providing transparency for untied aid transactions and to applying international competitive bidding procedures.
Key messages
Tied aid is defined as aid which is (in law or in fact) tied to the procurement of goods and/or services from the donor country and/or to a restricted number of countries; it includes loans, grants, or associated financing packages with a concessionality level greater than zero percent.
Untied aid is understood as aid (including loans and grants) whose proceeds are fully and freely available.
The tied aid disciplines were agreed to in 1991 by the Participants with the aim of limiting the use of concessional financing for projects that might be supported through commercial financing. The objective was to redirect tied aid away from richer countries that are able to attract commercial credits, and towards developing counties that are less well off.
The tied aid disciplines consist of three pillars: country eligibility, minimum concessionnality level, and project eligibility (Chapter III of the Arrangement).
Country eligibility
Tied aid cannot be provided to countries whose per capita Gross National Income according to the World Bank is above the upper limit for lower middle-income countries for two consecutive years (unless the concessionnality reaches at least 80%).
- Prevailing Country Eligibility for tied aid (PDF)
- Historical Country Eligibility for tied aid (Excel)
Minimum concessionality level
Tied aid must have a concessionality level of at least:
- 80% if the beneficiary country is not eligible for tied aid
- 50% if the beneficiary country is a Least developed Country (LDC)
- 35% if the beneficiary country is a tied aid eligible country and not an LDC
The discount rates to be used when calculating the concessionality level are the Differentiated Discount Rates (DDRs)
- Prevailing DDRs (PDF)
- Historical DDR since 1999 (Excel)
Project eligibility requirements
Tied aid shall not be extended to public or private projects that should be commercially viable. Please refer to the Ex ante Guidance for Tied Aid and Chapter III of the Arrangement for assistance in determining if a project might be deemed as commercially non-viable.
Trade-related untied aid
Participants are required to share information on an ex ante basis when providing trade-related untied aid (Chapter IV of the Arrangement). The purpose of this transparency is to ensure that it is truly untied.
Untied ODA credits
Following the adoption of the Agreement on untied Official Development Assistance credits (or “the Agreement”) in 2004, Participants committed to share information (on an ex ante and an ex post basis) when extending untied Official Development Assistance (ODA) credits. They also committed to using international competitive bidding procedures whenever possible.
The goal of the Agreement is to create more effective use of development assistance loans by ensuring goods and services may be purchased from any country, rather than only from the country providing the loan. This Agreement also seeks to avoid the circumvention of tied-aid disciplines through the use of untied aid.
The Agreement was inspired by the Recommendation on Untying Official Development Assistance and benefitted from inputs from the Developement Assistance Commitee of the OECD.
- Access the database for ex-ante information on untied ODA credits (Excel) [last update: 26 March 2026]
- Access the database for ex-post information on untied ODA credits being provided by Participants since 2005 (Excel)