Odious Debts

IBRD, Articles of Agreement: Article III, section 5

(February 16, 1989) IBRD Articles of Agreement require the bank to “make arrangements to ensure that the proceeds of any loan are used only for the purposes for which the loan was granted.” World Bank

Use of Loans Guaranteed, Participated in or Made by
the Bank

(a) The Bank shall impose no conditions that the proceeds of a loan shall be spent in the
territories of any particular member or members.

(b) The Bank shall make arrangements to ensure that the proceeds of any loan are used
only for the purposes for which the loan was granted, with due attention to considerations
of economy and efficiency and without regard to political or other non-economic
influences or considerations.

(c) In the case of loans made by the Bank, it shall open an account in the name of the
borrower and the amount of the loan shall be credited to this account in the currency or
currencies in which the loan is made. The borrower shall be permitted by the Bank to
draw on this account only to meet expenses in connection with the project as they are
actually incurred.

World Bank, February 16, 1989

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