2005年-世界发展银行全球_Output-Based_Aid_in_Project_Finance___Using_World_Bank_Guarantees_to_Enhance_Credit_4页_464kb

OBA Approaches Summary

Core Content

Output-Based Aid (OBA) is a form of subsidy used in infrastructure projects where government payments are tied to the delivery of services. These subsidies are often necessary when user fees alone cannot cover the full cost of service provision. However, the creditworthiness of OBA payments is a critical factor in attracting market financing, as many governments are perceived as unreliable payers.

The World Bank offers guarantee instruments to enhance the credit quality of OBA payments, enabling private operators to secure investment financing. These guarantees are particularly useful when government subsidies are a key component of a project’s revenue stream.

Main Views

• OBA is performance-based and targeted, designed to support infrastructure services where user fees are insufficient or impractical.
• Creditworthiness is essential for attracting private investment, and OBA payments must meet commercial financing standards.
• Government credit ratings often limit the ability of OBA to support private financing, necessitating credit enhancement mechanisms.

Key Information

Types of OBA Subsidies

1. Initial Capital Grants: Provided during the early investment phase, reducing the need for high user fees.
2. Periodic Subsidies: Offered after the initial phase to keep user fees affordable, especially in long-term or transitional scenarios.

World Bank Guarantee Options

• Partial Risk Guarantees:
  • Limited Recourse Structure: Guarantees commercial debt or shareholder loans, suitable for project finance.
  • Letter of Credit Structure: Protects against government non-payment, ideal for smaller privatization projects.
• Partial Credit Guarantees:
  • Designed for public entities borrowing from financial markets.
  • Not available for IDA countries, but can be used in IBRD countries for subsidy pools.
  • Typically applied to multi-project subsidy pools rather than individual projects.

Enhancing Credit for Individual Projects

• Letter of Credit Structure is most suitable for individual OBA projects.
• It allows direct compensation for revenue shortfalls due to government default.
• However, it only addresses government non-payment, not performance or policy risks.
• Partial risk guarantees can be combined with letter of credit guarantees to cover broader risks.
• Limited recourse guarantees are less effective as they do not cover equity providers.

Enhancing Transitional Subsidies

• Transitional subsidies support private operators taking over from inefficient public providers.
• The letter of credit structure can cover the entire transition period or be phased in with initial external assistance.
• Guarantees help attract private financing by providing assurance on subsidy payments beyond the aid disbursement period.

Enhancing Long-Term Subsidies

• Long-term subsidies are used for services with externalities or affordability issues (e.g., water, power, health).
• A letter of credit structure with uniform coverage is appropriate.
• Over time, the goal is to establish reliable government payments so that credit enhancement can be phased out.

Blending Instruments

• When combining aid financing and credit enhancement, guarantees must be approved simultaneously with initial IBRD or IDA financing.
• This adds complexity but ensures longer-term assurance for private investors.
• A guarantee-only approach may be more attractive for IDA countries due to the 25% weighting of guarantees in country borrowing programs.

Enhancing Credit for Subsidy Pools

• Subsidy pools are useful for financing multiple projects, especially smaller ones.
• Initial funding may come from external assistance or government resources.
• Partial credit guarantees can help extend borrowing terms and reduce financing costs.
• As the pool gains a track record, government commitments may no longer require underpinning, allowing credit enhancement to be phased out.

Conclusion

The World Bank provides guarantee instruments to improve the creditworthiness of OBA payments, which are essential for attracting private investment in infrastructure. These guarantees are particularly effective in multi-project subsidy pools and can be combined with other financing mechanisms. The goal is to eventually reduce reliance on guarantees by establishing reliable and sustainable government payment systems.