The Need, Capacity and Willingness of Regional Governments to Finance Public Infrastructure from Long-Term Loans

This report reviews the need for long-term loans for regional governments, assesses the capacity of regional governments to repay long-term loans, identifies existing constraints to long-term borrowing by the regions, and recommends options for removing or mitigating existing constraints. The Government of Indonesia issued a government regulation on regional borrowing and unlike its legal predecessor, the newer regulation allows regional governments to borrow long term for public infrastructure projects that are indirectly revenue-generating, such as roads and flood control systems. Until the late 1990s, a major portion of long-term loans to regional governments was financed by international financial institutions, mainly the Asian Development Bank and the World Bank. In view of the need to increase investments in public infrastructure, and the absence of a domestic market for long-term financing, Government of Indonesia is currently considering re-opening this window by establishing a Municipal Development Fund in the Ministry of Finance.

Bibliographic Details

Main Author:	World Bank
Format:	Other Public Sector Study biblioteca
Language:	English en_US
Published:	Washington, DC 2011-06
Subjects:	ARREARS, ASSET SALES, BASIC EDUCATION, BORROWING CAPACITIES, BORROWING CAPACITY, BUDGETING, CAPITAL INVESTMENTS, CAPITAL MARKET, CAPITAL MARKETS, COST ESTIMATES, COUNTERPART FUNDS, DEBT REPAYMENT, DEBT SERVICE, DEBT SERVICE PAYMENT, DEBT SERVICE PAYMENTS, DEBT SERVICES, DECENTRALIZATION, DEVELOPMENT BANK, DISBURSEMENT, DOMESTIC MARKET, ECONOMIC GROWTH, ELECTRICITY, EMPOWERMENT, EQUIPMENT, EVENT OF DEFAULT, EXCHANGE RATE, EXPENDITURES, FINANCING REQUIREMENT, FISCAL CAPACITY, FIXED ASSETS, FIXED INTEREST, FIXED INTEREST RATES, FIXED RATES, FOREIGN CURRENCY, FOREIGN DIRECT INVESTMENT, FOREIGN EXCHANGE, FOREIGN LENDER, FOREIGN LENDERS, FOREIGN LOAN, FOREIGN LOANS, GOVERNMENT BORROWING, GOVERNMENT BUDGETS, GOVERNMENT DEBT, GOVERNMENT INVESTMENT, GOVERNMENT INVESTMENTS, GOVERNMENT REGULATION, GOVERNMENT REVENUE, GRACE PERIOD, GROSS DOMESTIC PRODUCT, INFLATION, INFLATION RATE, INFRASTRUCTURE FINANCING, INFRASTRUCTURE INVESTMENTS, INSTALLMENT, INTEREST PAYMENT, INTEREST PAYMENTS, INTEREST RATE, INTEREST RATE RISK, INTEREST RATES, INTERNATIONAL FINANCIAL INSTITUTIONS, INVESTMENT COST, INVESTMENT PROJECTS, INVESTMENT REQUIREMENTS, LACK OF ACCESS, LATE PAYMENT, LENDING LIMITS, LOAN, LOAN AGREEMENT, LOAN AGREEMENTS, LOAN AMOUNT, LOAN APPLICATIONS, LOAN CONDITION, LOAN CONDITIONS, LOAN FUNDS, LOAN REPAYMENT, LOAN REPAYMENTS, LOAN TERM, LONG-TERM BORROWING, LONG-TERM DEBT, LONG-TERM INVESTMENTS, LONG-TERM LENDING, LONG-TERM LOAN, LONG-TERM LOANS, MARKET FAILURE, MATURITIES, MDF, MUNICIPAL BONDS, OUTSTANDING DEBT, OUTSTANDING LOANS, PENALTY, PRINCIPAL REPAYMENT, PRINCIPAL REPAYMENTS, PRIVATE INVESTORS, PRIVATE SECTOR, PROCUREMENT, PROVINCIAL GOVERNMENTS, PROVISIONS, PUBLIC, PUBLIC ADMINISTRATION, PUBLIC FINANCES, PUBLIC INFRASTRUCTURE, PUBLIC INVESTMENT, PUBLIC WORKS, REAL ECONOMIC GROWTH, REGIONAL PLANNING, REPAYMENT, REPAYMENT CAPACITIES, REPAYMENT CAPACITY, REPAYMENT OF DEBT, REPAYMENT PERIOD, REPAYMENT SCHEDULE, REPAYMENTS, RETURNS, ROADS, SALARIES, SALARY, SOLID WASTE COLLECTION, SUB-LOANS, SUB-NATIONAL BORROWING, TAX, TAX REVENUE, TELECOMMUNICATIONS, TOTAL BORROWING, TOTAL DEBT, TRANSFER INTERCEPT, TRANSPARENCY, TREASURY, URBAN INFRASTRUCTURE, URBANIZATION, VARIABLE INTEREST RATES, WATER SUPPLY,
Online Access:	http://documents.worldbank.org/curated/en/2011/06/16275159/need-capacity-willingness-regional-governments-finance-public-infrastructure-long-term-loans-building-capacity-development-sub-national-government-capital-market-municipal-bonds http://hdl.handle.net/10986/12466
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