Pooled municipal bond issuance in Tamil Nadu (India) (英语)

This case study is part of a series prepared by the WorldBank’s Water Global Practice to highlight existing blended finance experiences in the water sector. Blended finance refers to “the strategic use of development finance and philanthropic funds to...  更多显示 This case study is part of a series prepared by the WorldBank’s Water Global Practice to highlight existing blended finance experiences in the water sector. Blended finance refers to “the strategic use of development finance and philanthropic funds to mobilize private capital flows to emerging and frontier markets,” as per the OECD definition (WEF OECD, 2015). Concessional funds can be used in a catalytic manner to open up new opportunities for commercial financing, by providing technical assistance to borrowers and lenders to help them become more familiar with each other, help structure transactions,provide credit enhancement mechanisms, etc. Private capital flows can help with meeting immediate financing needs for investment in the water sector but ultimately need to be repaid. Repayable financing from private sources to the water sector can come in various forms, including as commercial bank loans, bondsor equity. To obtain such financing, water-sector actorsneed to be able to repay the borrowed amounts and the associated funding costs, which means that they need tobe deemed “creditworthy” by providers of finance. The Water and Sanitation Pooled Fund (WSPF) in Tamil Nadu issued a pooled bond to facilitate access to long-term domestic capital markets for small and medium Urban Local Bodies (ULBs) to finance water and sanitation services .This enabled a grouping of 13 ULBs to overcome hightransaction costs and mobilize funds through a singlebond issuance. Debt was repaid from project cash flowsand from general ULB revenues. A multi-layered credit enhancement package was designed in order to extend the maturity of the bond and increase investor confidence.The different credit enhancement mechanisms included a debt service reserve fund capitalized by the state government, creation of individual ULB escrow accounts, a local debt service reserve fund, a State revenue intercept mechanism, and a partial credit guarantee from USAID.  更少显示