Publication: Tool to Assess and Quantify Credit Risk from Public Corporations in the Transport Sector: Guidance Note
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2025-09-29
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2025-10-07
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State-owned enterprises (SOEs) play an important role in the provision of transport infrastructure and services. Many transport SOEs perform poorly, which undermines their ability to undertake needed capital and operating expenditures. Weak financial performance can limit SOEs access to financing markets and create fiscal risks. In some cases, financial markets tend to exercise less discipline on SOEs than on comparable private enterprises because they expect the government will bailout the SOEs if needed, creating fiscal risks. Being creditworthy, that is having the ability and willingness to repay and honor financial obligations fully and on time, allows a company to access commercial financial markets. But even if SOEs are not interested in borrowing from commercial markets because they have access to plenty of public funds, gaining and maintaining a creditworthy status can provide discipline to the operation of an SOE, by providing an incentive to improve efficiency and financial sustainability. Proper assessment of the creditworthiness of SOEs and understanding of the factors undermining it can help SOE managers and government officials take the necessary actions to ensure SOEs gain and maintain access to financing markets in a financially and fiscally sustainable manner. The tool presented in this guidance note allows SOE managers and government officials to undertake a shadow credit rating of SOEs to identify the factors undermining their creditworthiness in a systematic manner.
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“World Bank. 2025. Tool to Assess and Quantify Credit Risk from Public Corporations in the Transport Sector: Guidance Note. Mobility and Transport Connectivity Series. © World Bank. http://hdl.handle.net/10986/43812 License: CC BY-NC 3.0 IGO.”
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