Financial Intermediaries

Governments could establish financial intermediaries to ease the access to financing for private infrastructure investment. Examples include National Development Banks, Infrastructure Funds, ECAs and Multilateral Agencies.

 

National Development Banks could provide local currency financing and support private financing for PPPs where financing would not otherwise be available. Local financial reduce foreign exchange risks and could replace retreating or expensive foreign investment and support the development of a domestic capital market. Beside of loans, national agencies could provide equity/quasi equity contributions, advisory, asset management and syndication services.

 

Publicly sponsored Infrastructure Funds and sovereign wealth funds invest, jointly with the private sector, in infrastructure projects. Their intervention is for the most part in equity form but it can include subordinated/hybrid or debt instruments.

 

Export Credit Agencies (ECAs) and Export-Import (EXIM) Banks provide guarantees and loans for investments abroad and exports. The loans might be linked to national interests, like access to raw materials or the access to markets.

 

Multilateral agencies provide loans and guarantees for infrastructure investments that are aligned with their development goals. These products might act as credit enhancements and could thereby mobilize additional private financing.
Multilateral agencies include the World Bank Group, the Asian Development Bank (ADB), the Islamic Development Bank, and the Asian Infrastructure Investment Bank (AIIB). Other regional agencies are the ASEAN Infrastructure Fund (AIF) the Credit Guarantee and Investment Facility (CGIF).

 

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