Sweden boosts ADB lending capacity

Author: Amélie Labbé | Published: 15 Nov 2016

The Swedish International Development Cooperation Agency’s (Sida) move to act as guarantor of sovereign loans in Asia is a first in the multilateral financing world, and a one that market participants hope will be replicated globally.

Not only is a risk transfer instrument a recent development for multilateral funding – the Swedish Ministry of Foreign Affairs (MoFA) only authorised its use in the past year – its deployment is also innovative. In its first iteration, Sida’s agreement with the Asian Development Bank (ADB) will help the lender free up loaning resources so it can reach stated funding goals.

Sweden has agreed to step in to support investment in India"Normally, a guarantee is about reducing investment risk or lowering borrowing costs," said Samuel Hurtig, head of division, support unit for Asia at Sida. "In this instance, it’s about supporting further investment from the ADB and maximising the use of existing capital."...


 

 

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