Abstract: Since 1994, the World Bank has provided partial credit guarantees to private financiers of several large infrastructure projects in developing countries. A major objective of the partial guarantee program is to leverage Bank resources so as to provide developing countries with better private credit terms. A real test of the efficacy of World Bank partial credit guarantees is whether such guarantees also lower the interest rate and lengthen the effective maturity of the part of the credit not covered by the World Bank guarantee. On the basis of closed deals so far, this paper concludes that there is no evidence that guarantees have affected nonguaranteed interest rates favorably, while the duration of the nonguaranteed credits remains relatively low. 1
To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.