Review of risk mitigation instruments for infrastructure financing and recent trends and developments

Format:

Book

Author/Creator:

Matsukawa, Tomoko, author.

Contributor:

Habeck, Odo, Contributor.

World Bank, Content Provider.

Series:

Trends and policy options Review of risk mitigation instruments for infrastructure financing and recent trends and developments.

Language:

English

Subjects (All):

Infrastructure (Economics)--Finance.

Infrastructure (Economics).

Financial risk management.

Financial instruments.

Physical Description:

1 online resource (88 pages)

Edition:

1st ed.

Place of Publication:

[Place of publication not identified] : World Bank, 2007

Language Note:

English

Summary:

Although the importance of infrastructure sectors in achieving economic growth and poverty reduction is well established, raising debt and equity capital for infrastructure development and service provision has been a challenge for developing countries. Risk mitigation instruments facilitate the mobilization of commercial debt and equity capital by transferring risks that private financiers would not be willing to take to third-party official and private institutions that are capable of taking such risks. There has been increasing interest and discussion on risk mitigation instruments in the context of infrastructure financing among developing country governments, multi- and bilateral donors, and the private sector. However, due to the complex and diverse nature of risk mitigation instruments, what they can and cannot offer and how they can best be utilized for infrastructure financing are not well understood. This book summarizes existing risk mitigation instruments - primarily focusing on those offered by multilateral and bilateral official agencies - and presents recent trends and developments that make these guarantee and insurance products valuable in securing financing for infrastructure projects in developing countries. Topics covered include:Descriptions of different types of risk mitigation instruments characteristics of multilateral, bilateral, and private providers of risk mitigation instruments and compatability of instruments Recent developments and innovative applications of risk mitigation instruments through case transactions areas that pose challenges to the use of risk mitigation instruments as catalysts of infrastructure development.ucture projects and finance.

Contents:

Intro

TABLE OF CONTENTS

Authors

Acknowledgments

Foreword

Background

Introduction

1. Types of Risk Mitigation Instruments

Credit Guarantees

Export Credit Guarantees or Insurance

Political Risk Guarantees or Insurance

2. Recent Trends in Risk Mitigation

Regulatory Risk

Devaluation Risk

Subsovereign Risk

3. Characteristics of Risk Mitigation Providers and Compatibility of Products

Multilateral Agencies

Bilateral Agencies

Private Financial Entities

Complementary Arrangements

4. Innovative Application of Risk Mitigation Instruments

Multilateral Wrap Guarantees by Combining Partial Credit Guarantees

PCG Combined with Contingent Loan Support

PCG for Pooled Financing

Complementary Guarantees by Combining a PRG and PRI

Corporate Finance with PRG and PRI

Privatization Guarantees

Brownfield Project Support

Country-Specific Guarantee Facilities

Global or Regional Guarantee Facilities

Guarantee Initiatives for Local Capital Markets

5. Challenges Ahead

Appendix A. Profiles of Transaction Cases

Appendix B. Profiles of Multilateral and Bilateral Risk Mitigation Instruments

List of Tables

1 Broad Category of the Availability of Instruments

A1 Summary, Philippines Power Sector Assets and Liabilities Management Corporation

A2 Summary, Philippine Power Trust I

A3 Summary, Tlalnepantla Municipal Water Conservation Project

A4 Summary, City of Johannesburg

A5 Summary, Privatization of Romanian Power Distribution Companies

A6 Summary, Joint Kenya-Uganda Railway Concession

A7 Summary, AES Tietê

A8 Summary, Phu My 2.2 BOT Power Project

A9 Summary, Rutas del Pacifico

A10 Summary, IIRSA Northern Amazon Hub

A11 Summary, Tamil Nadu Pooled Financing for Water and Sanitation.

A12 Summary, West African Gas Pipeline Project

A13 Summary, Southern Africa Regional Gas Project

A14 Summary, Afghanistan Investment Guarantee Facility

A15 Summary, SME Partial Credit Guarantee Program

A16 Summary, Private Infrastructure Development Group

A17 Summary, BOAD Infrastructure Guarantee Facility

A18 Summary, African Trade Insurance Agency

Appendix B1. Profiles of Major Multilateral Risk Mitigation Instruments

B1.1 World Bank: International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA)

B1.2 International Finance Corporation (IFC)

B1.3 Multilateral Investment Guarantee Agency (MIGA)

B1.4 African Development Bank (AfDB)

B1.5 Asian Development Bank (ADB)

B1.6 European Bank for Reconstruction and Development (EBRD)

B1.7 Inter-American Development Bank (IDB)

B1.8 European Investment Bank (EIB)

B1.9 Andean Development Corporation (CAF)

B1.10 Islamic Corporation for Insurance of Investments and Export Credits (ICIEC)

B1.11 Inter-Arab Investment Guarantee Corporation (IAIGC)

Appendix B2. Profiles of Major Bilateral Risk Mitigation Instruments

B2.1 Export Development Canada (EDC)

B2.2 Agence Française de Développement (AFD)

B2.3 Coface

B2.4 Deutsche Investitions und Entwicklungsgesellschaft mbH (DEG)

B2.5 Foreign Trade and Investment Promotion Scheme (AGA)

B2.6 Italian Export Credit Agency (SACE)

B2.7 Japan Bank for International Cooperation (JBIC)

B2.8 Nippon Export and Investment Insurance (NEXI)

B2.9 Atradius Dutch State Business NV

B2.10 The Netherlands Development Finance Company (FMO)

B2.11 Norwegian Guarantee Institute for Export Credits (GIEK)

B2.12 Swedish Export Credit Guarantee Board (EKN)

B2.13 Swiss Investment Risk Guarantee Agency (IRG)

B2.14 Swiss Export Risk Guarantee (SERV).

B2.15 Department for International Development (DFID)

B2.16 Export Credits Guarantee Department (ECGD)

B2.17 United States Agency for International Development's (USAID's) Development Credit Authority (DCA)

B2.18 Export-Import Bank of the United States (Ex-Im Bank)

B2.19 Overseas Private Investment Corporation (OPIC)

Box

1.1 Guarantees vs. Insurance

Figure

1.1. Key Parameters of Risk Coverage.

Notes:

Bibliographic Level Mode of Issuance: Monograph

ISBN:

1-280-94027-1

0-8213-7101-0

0-8213-7100-2

6610940274

9786610940271

Publisher Number:

10.1596/978-0-8213-7100-8