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 rem...
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| Format: | Other Public Sector Study |
| Language: | English en_US |
| Published: |
Washington, DC
2013
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| 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 |
| Summary: | 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. |
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