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Advantages and Benefits of Guarantees

For governments…

 

ü      Catalyzes private financing in infrastructure

ü      Provides access to capital markets

ü      Facilitates privatizations and public private partnerships (PPPs)

ü      Reduces government risk exposure by passing commercial risk to the private sector

ü      Improves impact of private sector participation on tariffs

ü      Encourage cofinancing

 

 

For the private sector…

 

ü      Reduces risk of private transactions in emerging countries

ü      Mitigates risk that the private sector does not control

ü      Opens new markets

ü      Lowers the cost of financing

ü      Improves project sustainability