The International Monetary Fund's executive board Thursday approved a EUR28 billion ($36.49 billion) loan for debt-beleaguered Greece despite fears by some members that political risks may derail the program.

The decision allows for an immediate disbursal of the first EUR1.65 billion tranche of the loan, though practically the payout may not be transferred to Athens until Monday.

As a small share of a joint program with the European Union, the loan helps Athens stave off default and the euro zone to temporarily prevent the debt contagion from spreading to other ailing countries in the region.

"The challenges confronting Greece remain significant, with a large competitiveness gap, a high level of public debt, and an under-capitalized banking system," said IMF Managing Director Christine Lagarde in a statement.

"The new Fund-supported program will enable Greece to address these challenges while remaining in the Eurozone," she said

One board member said the IMF was acting "to help prevent the contagion scenario."

Euro-zone countries Wednesday signed off on its lion's-share portion of the joint EUR130 billion bailout package for Greece.

Still, several board members have expressed reservations about the ability of Greece to successfully carry out the four-year program. Paulo Nogueira Batista, representative to the IMF for Brazil and eight other countries, abstained from the decision, a diplomatic way of opposing the program. Technically, there is no vote as the board decides based on consensus reached before the actual meeting. But the positions of each delegation are recorded in confidential minutes.

Lagarde warned that risks "remain exceptionally high, and there is no room for slippages."

"Full and timely implementation of the planned adjustment--alongside broad-based public support and support from Greece's European partners--will be critical to success," she said.

Poul Thomsen, IMF's mission chief to Greece, said if Athens falters the country risks creating "unsustainable debt dynamics."

Thomsen said under its new loan program, the IMF is shifting its focus away from budget belt-tightening and toward spurring growth, particularly through labor reforms.

"This will require difficult structural reforms...and this will undoubtedly be socially and politically challenging," he said.

The IMF is especially wary given Greece's track record of failing to meet many of its fundamental program targets.

Fund staff have warned that a failure of Athens to implement needed economic changes would push financing costs up to EUR245 billion. That's compared with combined debt-restructuring costs and official-sector lending under the new program of around EUR230 billion.

Lagarde highlighted Europe's "commitment to provide adequate support to Greece during the life of the program and beyond until it has regained market access," provided Greece fully complies with the loan conditions. IMF insiders say the comments indicate the fund has reached its likely lending limits for Greece.

According to one board member, the board is split over whether the fund should provide any more cash to cover any possible future financing gaps.

"Many board members are not prepared to give anymore money," the person said. Another member said he thought it highly unlikely the IMF would approve any more financing for Athens if there are funding shortfalls.

Europeans sitting on the board want the fund to leave open the possibility, but many others don't think the IMF should increase its exposure to Greece, given both the amounts the IMF has lent to Athens and the risk of default.

The fund is attempting to counter what many board members fear is over-exposure to Greece. Compared with its European partners' contributions, the IMF's EUR28 billion loan is proportionally smaller than the bailout package it succeeds. The IMF and Europe abandoned the first program after it failed to stem the crisis, replacing it with tougher economic conditions, a restructuring of EUR206 billion in privately held Greek government bonds and more bailout cash. The fund had already issued more than EUR20 billion in credit to Greece under the previous program, but canceled the remaining EUR10 billion in disbursements in favor of the new package.

Also, the IMF is extending its payout period by a year, making it a four-year program instead of three. The longer payment schedule allows for smaller disbursements and preserves more IMF capital should the IMF halt payments for program failure.

Some economists still predict Greece ultimately may have to pull out of the euro zone or, at the very least, restructure its debt again. Many have said Greece already is at the limits of its ability to enforce already-approved policies.

Several of the most powerful politicians in the Greek government have given the IMF written political commitments to carry out the economic reforms. Some, however, expect that commitment to the program may wane after elections planned in the coming weeks.

Some analysts say the fund is using the loan program for Greece to buy time for other ailing euro-zone countries to put their economies back on a healthy path and for banks to insulate themselves against a worsening of the debt crisis. The fund is urging euro-zone leaders to boost the size of its general bailout fund by at least half and to use some of that cash to bulk up banks' capital defenses.

-By Ian Talley, Dow Jones Newswires; 202-862-9285; ian.talley@dowjones.com

--Costas Paris in London, Matina Stevis in Brussels, and Sudeep Reddy of the Wall Street Journal in Washington, D.C., contributed to this article.