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Risk Mitigation and Sovereign Guarantees for Public–Private Partnerships in Developing Economies

Author

Listed:
  • Jett, Alexander

    (Asian Development Bank)

Abstract

Public–private partnerships (PPPs) face a range of challenges in developed economies, such as appropriate risk sharing, attracting the right sponsors, and ensuring quality of service. As a large percentage of ADB’s developing member countries are considered risky borrowers by international standards, sovereign risks play an important role in predicting the number of PPPs as well as the size of investment commitments. To catalyze PPPs in developing economies with higher risk ratings, sovereign risk mitigation is often needed. This article explores how country and sovereign risks deter private investors, solutions provided by multilateral development banks to reduce these risks, and policy implications for employing these solutions.

Suggested Citation

  • Jett, Alexander, 2018. "Risk Mitigation and Sovereign Guarantees for Public–Private Partnerships in Developing Economies," ADB Economics Working Paper Series 564, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0564
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    File URL: https://www.adb.org/sites/default/files/publication/468626/ewp-564-risk-mitigation-sovereign-guarantees-ppps.pdf
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    References listed on IDEAS

    as
    1. Jordan Z Schwartz & Fernanda Ruiz-Nuñez & Jeff Chelsky, 2014. "Closing the Infrastructure Finance Gap: Addressing Risk," RBA Annual Conference Volume (Discontinued), in: Alexandra Heath & Matthew Read (ed.),Financial Flows and Infrastructure Financing, Reserve Bank of Australia.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    public–private partnership; risk mitigation; sovereign guarantees;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts

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