Does procurement occur before the Bank (AfDB) approves a loan?
No, procurement does not take place before the Bank approves a loan, except in the exceptional circumstances of the application of Advance Procurement Action (APA) in the case of Goods and Works or Advance Action for the Acquisition of Consultancy Services (AAA), where it is clearly shown that early contracting by the Borrower, will be a favorable and important factor in the timely completion of the project. In such a case, the Borrower may be authorized to issue the invitation to bid (SPN) or to pre-qualify, to issue a letter of intent to the selected contractor, but without signing the ensuing contract before the approval of the loan. The SPN would state that the Borrower has applied for a Bank loan and intends to use the proceeds to finance the contract. The Bank’s approval of the APA or AAA, will not in any way commit the Bank to approve the loan. The limitations, safeguards and the Bank’s approval process are outlined in the Bank’s Rules.
