Mitigating Currency Convertibility Risks in High-Risk Countries : A New IDA Lending Approach

A proposed Currency Convertibility Fund, backstopped by a contingent credit from the International Development Association (IDA)-the World Bank's concessionary window for the world's poorest countries-has been designed for the Songo Songo Gas Development and Power Generation Project in Tanzania. The fund is a transitional mechanism aimed at supporting the Tanzanian government's efforts to attract foreign equity in circumstances where the private sector perceives a high level of risk and is otherwise unwilling to invest. The fund may be a replicable mechanism that, by mitigating sovereign risks that investors are unwilling to bear and unable to hedge against, could help catalyze foreign equity investment in other IDA countries and in projects that generate local currency.

Bibliographic Details

Main Author:	Rasmussen, Karen
Language:	English
Published:	World Bank, Washington, DC 1999-04
Subjects:	CONVERTIBILITY, RISK MANAGEMENT, INVESTMENT RISKS, EQUITY INVESTMENTS, DEVELOPMENT CREDIT AGREEMENT, ADMINISTRATIVE ARRANGEMENTS, GUARANTEED INVESTMENT CONTRACTS, FOREIGN INVESTMENT, PRIVATE INVESTMENTS, POLITICAL RISK INSURANCE CASH FLOWS, COMMERCIAL DEBT, CURRENCY, CURRENCY CONVERTIBILITY, DEBT, DIVIDENDS, EARNINGS, ELECTRICITY GENERATION, EXPENDITURES, FOREIGN EXCHANGE, FOREIGN EXCHANGE MARKET, FOREIGN INVESTORS, FOREIGN PRIVATE INVESTMENT, INSURANCE, INTERNATIONAL FINANCE, LOCAL CURRENCY, OIL, OTC, PRIVATIZATION, PROJECT FINANCING, SOVEREIGN RISK,
Online Access:	http://documents.worldbank.org/curated/en/1999/04/717457/mitigating-currency-convertibility-risks-high-risk-countries-new-ida-lending-approach https://hdl.handle.net/10986/11490
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