Tied Aid as Defined by the U.S. Export-Import Bank:
Tied aid is government-to-government concessional financing of public sector capital projects in developing countries that requires the recipient government to purchase goods and services from the donor government. Tied aid is provided by the aid agencies of rich-country governments, sometimes in joint financing packages with their national export credit agencies (their Ex-Im banks). Tied aid terms are much more concessional than the typical export credit terms offered by Ex-Im Bank and its counterparts. Tied aid usually involves total maturities longer than 20 years; interest rates equal to one-half to two-thirds of market rates in the currency of denomination; or large grants (equal to more than 35 percent of contract value) offered in conjunction with regular export credits. Regular export credits--involving terms up to and including 10-12 years--are not tied aid."