An analysis of government loan guarantees and direct investment through public-private partnerships
This paper compares 2 forms of government support: loan guarantee and direct investment through public-private partnerships
Abstract
This paper compares 2 forms of government support: loan guarantee and direct investment through public-private partnerships (PPPs). With loan guarantee, government provides financial guarantees to enhance project creditworthiness. With direct investment, government invests capital directly in the project. In both forms of support, the government receives shares proportional to its financial commitment. We find that loan guarantees are more effective in reducing project borrowing costs.
This is an output from the ‘Delivering Inclusive Financial Development and Growth’ project
Citation
Issouf Soumaré, Van Son Lai, An analysis of government loan guarantees and direct investment through public-private partnerships, Economic Modelling, Volume 59, 2016, Pages 508-519,
Links
An analysis of government loan guarantees and direct investment through public-private partnerships