Publication: Recent trends in Risk Mitigation Instruments for Infrastructure Finance : Innovations by Providers Opening New Possibilities
Loading...
Published
2007-05
ISSN
Date
2012-08-13
Author(s)
Editor(s)
Abstract
Using risk mitigation instruments to support infrastructure finance has attracted growing interest among developing country governments, the donor community and the private sector. Official development agencies and private insurers are exploring new applications, opening new possibilities in raising finance for infrastructure projects. The importance of infrastructure for economic growth and poverty reduction is well established. However, raising debt and equity capital for infrastructure development and service provision remains a challenge for developing countries.
Link to Data Set
Citation
“Matsukawa, Tomoko; Habeck, Odo. 2007. Recent trends in Risk Mitigation Instruments for Infrastructure Finance : Innovations by Providers Opening New Possibilities. Gridlines; No. 20. © World Bank. http://hdl.handle.net/10986/10685 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Review of Risk Mitigation Instruments for Infrastructure Financing and Recent Trends and Developments(Washington, DC: World Bank, 2007)The objective of the Review of Risk Mitigation Instruments for Infrastructure Financing and Recent Trends and Developments is to provide a concise yet comprehensive guide as well as reference information for practitioners of infrastructure financing, including private sector financiers and developing country officials. The work is also intended as a reference for institutions offering (or developing) risk mitigation instruments, allowing them to learn from each other's recent practices. The book is organized into five chapters with the following objectives: Chapter 1 Type of Risk Mitigation Instruments: increases awareness of the different types and nature of risk mitigation instruments currently available for private financiers. Chapter 2 Recent Trends in Risk Mitigation: highlights areas in risk mitigation for developing country infrastructure financing receiving recent attention. Chapter 3 Characteristics of Providers and Compatibility: summarizes the characteristics of multilateral, bilateral, and private providers of risk mitigation instruments and the compatibility of those instruments. Chapter 4 Innovative Application of Risk Mitigation Instruments: presents recent developments and innovative applications of risk mitigation instruments through case transactions. Chapter 5 Challenges Ahead: summarizes areas that pose challenges to the use of risk mitigation instruments as catalysts of infrastructure development. The focus of this book is on the multilateral development banks and agencies (that is, The World Bank Group and regional development banks and affiliates) and bilateral development agencies and export credit and investment agencies of major developed countries that have supported the compilation of this information.Publication MIGA Annual Report 2013 : Insuring Investments, Ensuring Opportunities(Washington, DC: World Bank Group, 2013-10-11)In fiscal year 2013, Multilateral Investment Guarantee Agency (MIGA) issued 2.8 billion dollars in investment guarantees for projects in our developing member countries. At 1.5 billion dollars, representing more than half of new business, the bulk of MIGA's guarantees issued support investments in Sub-Saharan Africa. Sixty-nine percent of new business volume this year was in complex projects in infrastructure and extractive industries, a strategic priority for the Agency. This year, 82 percent of MIGA's new volume fell into one or more of strategic priority areas: investments in the world's poorest countries, "South-South" investments, investments in conflict-affected countries, and investments in complex projects. MIGA also established the conflict-affected and fragile economies facility to further deepen support to this priority area.Publication Innovative Financing for Development(Washington, DC : World Bank, 2009)In the run-up to the 'follow-up international conference on financing for development' to be held in Doha from November 28 to December 2, 2008, it seems particularly timely to collect in one book writings on the various market-based innovative methods of raising development finance. Although developing countries are well advised to use caution in incurring large foreign debt obligations, especially of short duration, there is little doubt that poor countries can benefit from cross-border capital whether channeled through the public or private sectors. The papers in this book focus on various recent innovations in international finance that allow developing countries to tap global capital markets in times of low risk appetite, thereby reducing their vulnerability to booms and busts in capital flows. Debt issues backed by future hard currency receivables and diaspora bonds fall into the category of mechanisms that are best described as foul-weather friends. By linking the rate on interest to a country's ability to pay, Gross Domestic Product (GDP)-indexed bonds reduce the cyclical vulnerabilities of developing countries. Furthermore, these innovative mechanisms perm lower-cost and longer-term borrowings in international capital markets. Not only do the papers included in this book describe the innovative financing mechanisms; they also quantify the mechanisms' potential size and then identify the constraints on their use. Finally, the papers recommend concrete measures that the World Bank and other regional development banks can implement to alleviate these constraints. Economists have analyzed the feasibility and potential of using various tax-based sources of development finance in the context of meeting the millennium development goals. This has given rise to a new discipline of global public finance. This book complements those efforts by focusing on market based mechanisms for raising development finance.Publication MIGA 2008 Annual Report(Washington, DC: World Bank, 2008)During fiscal year 2008, the Bank Group committed $38.2 billion in loans, grants, equity investments and guarantees to its members and to private businesses in member countries, an increase of $3.9 billion (11.4 percent) from fiscal year 2007. The World Bank, comprising International Development Association (IDA) and International Bank for Reconstruction and Development (IBRD), committed $24.7 billion in loans and grants to its member countries. IDA commitments to the world's poorest countries were $11.2 billion, five percent lower than the previous year. IBRD commitments in fiscal 2008 totaled $13.5 billion, five percent higher than the previous year. International Finance Corporation (IFC) committed $11.4 billion and mobilized an additional $4.8 billion for private sector investments in developing countries, more than 40 percent of which were in IDA eligible countries. Multilateral Investment Guarantee Agency (MIGA) issued close to $2.1 billion in guarantees in support of investments in the developing world, an increase of $730 million over 2007. Of the total, $689.6 million went to IDA-eligible countries. This year, MIGA's operating income was $55 million, compared with $49 million in FY07. The increase of $6 million was due to an increase in net premium income and investment income and a decrease in the agency's administrative expenses. FY08 net income increased by $3.4 million compared to FY07, primarily due to higher guarantee income and investment income and translation gains.Publication World Investment and Political Risk 2013(Washington, DC: World Bank Group, 2014)This report seeks to understand investors' perceptions of political risk as they affect Foreign Direct Investment (FDI), as well as the role of the political risk insurance industry in mitigating these risks. It is found that investors continue to rank political risk as a key obstacle to investing in developing countries, though investors classify macroeconomic instability as their top concern over the medium term. The report confirms a continued increase in the use of political risk insurance as a risk-mitigation tool and reaffirms the industry's health and resilience. Providers have met the challenge of these years with new products and innovative ways to use existing tools as well as substantial capacity to meet growing demand. It also looks at breach of contract risk and its causes. The research helps guide investors and insurers when they participate in a project that involves a contract with a developing-country government entity. As private and public sectors continue to increase their cooperation in service of bringing important investments to fruition, this research is particularly timely.
Users also downloaded
Showing related downloaded files
Publication Structural Reforms and Productivity Growth in Developing Countries(World Bank, Washington, DC, 2021-07)This paper investigates the effects of financial sector, product market, and trade reforms on labor productivity growth and its two components—the intra-sectoral (within) and inter-sectoral (between) components—in a sample of developing countries over 1975–2005. The paper finds that most of the past trade, product, and financial sector reforms have increased the growth rate of labor productivity. In particular, countries that are further away from the technology leader tend to benefit more from structural reforms than countries closer to the technology frontier. Looking at the subcomponents of labor productivity growth, the paper finds that structural reforms work mostly through the intra-allocative efficiency channel but not through the inter-allocative efficiency channel. The intra-sectoral component is the main driver of the impacts of reforms on labor productivity growth, with a contribution between 76 and 96 percent.Publication Kyrgyz Republic Country Climate and Development Report(Washington, DC: World Bank, 2025-11-03)This Country Climate and Development Report (CCDR) on the Kyrgyz Republic aims to support the country’s development goals amid a changing climate. The CCDR considers two policy scenarios up to 2050: the business-as-usual (BAU) and high-growth scenarios. As it quantifies the likely impacts of climate change on the Kyrgyz economy between now and 2050, the report highlights key government actions to best prepare for and adapt to climate impacts (referred to as “with adaptation” measures), with a particular focus on the time horizon up to 2030. The CCDR also outlines a path to net zero emissions by 2050 (referred to as “with mitigation” measures, “decarbonization,” or, simply, “net zero 2050”), highlighting associated development co-benefits.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication Taxes, Spending, and Equity: International Patterns and Lessons for Developing Countries(Washington, DC: World Bank, 2025-11-17)Taxes and public spending underpin the basic administration of government and finance the human capital and infrastructure investments needed for economic growth. They can also have a significant and immediate impact on poverty and inequality. The question of how public finance can support longer-term growth objectives while promoting equity has become even more important in recent years, given the high fiscal deficits and debt levels most countries emerged with in the aftermath of the COVID-19 pandemic. These included the increasing cost of debt and the need to restart environmentally sustainable growth while helping households address the learning losses and other social scars caused by the pandemic. This paper examines the global evidence on which households pay which taxes and who benefits from what spending, and critically, the net effect on different households across the income distribution. The aim is to identify the patterns and lessons that emerge for designing progressive fiscal policies. A global dataset of 96 countries is assembled, spanning all regions of the world and all national income levels, grounded in the Commitment to Equity (CEQ) approach to fiscal incidence.Publication Direct and Indirect Impacts of Transport Mobility on Access to Jobs: Evidence from South Africa(Washington, DC: World Bank, 2025-11-12)Access to jobs is essential for economic growth. In Africa, unemployment rates are notably high. This paper reexamines the relationship between transport mobility and labor market outcomes, with a particular focus on the direct and indirect effects of transport connectivity. As predicted by theory, wages are influenced by the level of commuting deterrence. Generally, higher earnings are associated with longer commute times and/or higher commuting costs. Local accessibility is also important, especially for individuals with time constraints. Both direct and indirect impacts are found to be significant in South Africa, where job accessibility has been challenging since the end of apartheid. For the direct impact, the wage elasticity associated with commuting costs is significant. Returns on commute are particularly high for women. Local accessibility to socioeconomic facilities, such as shops and health services, is also found to have a significant impact, consistent with the concept of mobility of care. To enhance employment, therefore, it is crucial to connect people not only to job locations but also to various socioeconomic points of interest, such as markets and hospitals, in an integrated manner. This integration will enable individuals to spend more time working and commuting longer distances.