ABSTRACT
Multilateral development banks (MDBs), export credit agencies (ECAs), and other official agencies have played a significant role in the financing of developing country projects since the early 1990s, when the current form of international project finance first took shape. These institutions were established to provide financing for governmental and private-sector transactions in countries where political risks often prevent private-sector institutions from lending. ECAs were created to promote exports from the country that owns or controls the ECA. ECAs typically provide short-term trade financing, medium-term financing for capital goods, and political risk insurance for export transactions and long-term investments, but they vary greatly in the extent to which they are active in the project finance market. Bilateral agencies constitute a third type of official agency that is active in the project finance market. Bilateral agencies are a more heterogeneous group than MDBs or ECAs, and institutions cannot always be rigidly placed in a single group.
