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Chiara Broccolini, Giulia Lotti, Alessandro Maffioli, Mr. Andrea F Presbitero, and Rodolfo Stucchi

reaffirmed their pledge to catalyze more investment from private investors ( World Bank, 2018 ). There are multiple examples from around the world of projects with MDBsparticipation that had important catalytic effects in different settings. A prominent example is the Panama Canal expansion. The project to expand the canal and allow larger ships to transit to avoid market losses followed a referendum in 2006 and was financed by the Inter-American Development Bank Group (IDBG) , other three Multilaterals, and the Japan Bank for International Cooperation. It is the

Daniel Gurara, Mr. Andrea F Presbitero, and Miguel Sarmiento

, diversify credit exposures to particular borrowers, industries, or countries as well as to make loans in markets where they lack origination capabilities ( Sufi, 2007b ; Haselmann and Wachtel, 2011 ). Although there is an emerging empirical literature on the pricing of syndicated loans, it is mostly limited to advanced and emerging economies and, to our knowledge, there is no study on the effect of MDBsparticipation on loan pricing. 5 Most of the empirical literature analyzing the syndicated loans markets has been focused on advanced economies (see, for instance

Daniel Gurara, Mr. Andrea F Presbitero, and Miguel Sarmiento
Cross-border bank lending is a growing source of external finance in developing countries and could play a key role for infrastructure financing. This paper looks at the role of multilateral development banks (MDBs) on the terms of syndicated loan deals, focusing on loan pricing. The results show that MDBs' participation is associated with higher borrowing costs and longer maturities---signaling a greater willingness to finance high risk projects which may not be financed by the private sector---but it is also associated with lower spreads for riskier borrowers. Overall, our findings suggest that MDBs could crowd in private investment in developing countries through risk mitigation.
Chiara Broccolini, Giulia Lotti, Alessandro Maffioli, Mr. Andrea F Presbitero, and Rodolfo Stucchi
We use loan-level data on syndicated lending to a large sample of developing countries between 1993 and 2017 to estimate the mobilization effects of multilateral development banks (MDBs), controlling for a large set of fixed effects. We find evidence of positive and significant direct and indirect mobilization effects of multilateral lending on the number of deals and on the total size of bank inflows. The number of lending banks and the average maturity of syndicated loans also increase after MDB lending. These effects are present not only on impact, but they last up to three years and are not offset by a decline in bond financing. There is no evidence of anticipation effects and the results are not driven by confounding factors, such as the presence of large global banks, Chinese lending and aid flows. Finally, the economic effects are sizable, suggesting that MBDs can play a vital role to mobilize private sector financing to achieve the goals of the 2030 Development Agenda.
Chiara Broccolini, Giulia Lotti, Alessandro Maffioli, Mr. Andrea F Presbitero, and Rodolfo Stucchi
Daniel Gurara, Mr. Andrea F Presbitero, and Miguel Sarmiento

Front Matter Page Strategy, Policy and Review Department Borrowing costs and the role of multilateral development banks: Evidence from cross-border syndicated bank lending 1 Prepared by Daniel Gurara, Andrea F. Presbitero and Miguel Sarmiento Authorized for distribution by Ali Mansoor December 2018 Contents 1 Introduction 2 Data and Descriptive Statistics 2.1 MDBsParticipation in Syndicated Loans: Stylized Facts 2.2 Macro Trends 3 Main Results 3.1 The Empirical Analysis 3.2 Loan Pricing 3.3 De

International Monetary Fund

PPPs in the last five years). The central government is the main counterpart of the private sector, with minimal participation of subnational levels of government. About a quarter of PPP projects in LIDCs involve MDB participation and financial support, largely in the form of direct loans and credit enhancements, including political risk coverage and partial credit guarantees ( World Bank, 2016c ). Figure 46. Flows of PPP Commitments to LIDCs, by Sector (In billions of US dollars) Sources: World Bank; and IMF staff estimates. Financing for

International Monetary Fund
This paper is the third in a series assessing macroeconomic developments and prospects in low-income developing countries (LIDCs). The first of these papers (IMF, 2014a) examined trends during 2000–2014, a period of sustained strong growth across most LIDCs. The second paper (IMF, 2015a) focused on the impact of the drop in global commodity prices since mid-2014 on LIDCs—a story with losers (countries dependent on commodity exports, notably fuel) and winners (countries with a more diverse export base, where growth remained robust). The overarching theme in this paper’s assessment of the macroeconomic conjuncture among LIDCs is that of incomplete adjustment to the new world of “lower for long” commodity prices, with many commodity exporters still far from a sustainable macroeconomic trajectory (Chapter 1). The analysis of risks and vulnerabilities focuses on financial sector stresses and medium-term fiscal risks, pointing to the actions, including capacity building, needed to manage and contain these challenges over time (Chapter 2). With 2016 the first year of the march towards the 2030 development goals, the paper also looks at how infrastructure investment can be accelerated in LIDCs, given that weaknesses in public infrastructure (such as energy, transportation systems) in LIDCs are widely seen as a key constraint on medium-term growth potential (Chapter 3). With the sharp adjustment in commodity prices now into its third year, some of the key messages of the paper are familiar: a) many commodity exporters, notably fuel producers, remain under significant economic stress, with sluggish growth, large fiscal imbalances, and weakened foreign reserve positions; b) countries with a more diversified export base are generally doing well, although several have been hit by declines in remittances, conflict/natural disasters, and the contractionary impact of macroeconomic stabilization programs; c) widening fiscal imbalances, in both commodity and diversified exporters, have resulted in rising debt levels, with severe financing stress emerging in some cases; and d) financial sector stresses have emerged in many LIDCs, with expectations that these strains will increase in many commodity exporters over the next 12–18 months. Key messages on financial sector oversight, on medium-term fiscal risks, and on tackling infrastructure gaps are flagged below. Read Executive Summary in: Arabic; Chinese; French; Spanish