Grant Equivalent (GQ): The grant equivalent of a loan is defined as the difference between the present values of the loan's disbursements and stream of expected debt service payments, or the resources that borrowers receive in excess of their interest and repayment obligations. Conceptually, for each loan, this amount is equal to the net loss to the lender -- equivalent to a grant. The computation of grant equivalents involves discounting two cash flow streams for each loan (disbursements and interest/amortization payments) using discount rates that reflect both the term structure of each loan and the market conditions specific to the loan's currency of issue at the time of valuation.
Cases: | 134 |
Variables: | 23 |
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