Why do some Development Projects Disburse Funds Faster than Others

The timely disbursement of funds is a necessary condition for the success of international development projects. Disbursements track the progress of projects in completing the products that ultimately will deliver the projects desired outcomes. Moreover, in a world with pressing needs for external financing, project disbursements are an important source of external liquidity for recipient countries. However, some projects start disbursing faster than others and at relatively larger amounts. Hence learning why some projects disburse faster than others is important to understand not only which projects are more likely to achieve development outcomes sooner, but also to assess their value as providers of external liquidity in times of distress. As it has become evident over the past year with the COVID-19 pandemic, multilateral lending has played a crucial role in helping emerging countries face the larger financing needs originated by the crisis. In 2020, Inter-American Development Bank (IDB) disbursements increased 49% over 2019, reaching $13.4 billion, more than doubling the baseline disbursement projection. This paper assesses which observable characteristics of investment loans offered by the IDB are associated with faster disbursements. The results indicate substantial heterogeneity across countries, sectors, and loan modalities. All else constant, results-based loans and loans in the social sector are more likely to disburse within 2 years after being approved. Projects in countries where it takes longer to meet at least some of the clauses to start disbursing are less likely to start disbursing 2 years after approval. Projects that are expected to have longer execution times disburse at slower speeds within 24 months after approval. Overall, country factors seem to play a more relevant role than sectorial factors in explaining the probability that a project will disburse funds quickly. These and other findings in the paper can inform future programming exercises and help optimize the disbursement processes.

Ukrainian leader's support requires wins on key issues

Significance He has navigated his way through powerful anti-reform lobbies, fears that he was too naive to handle the Kremlin, and concerns about impartiality arising from a July 2019 phone call with US President Donald Trump. Impacts Zelensky's main challenge abroad is not lack of confidence in his leadership but waning international interest in Ukraine. Local elections in October will be a first test of how Zelensky's electoral support stands. Even if Ukraine had to forego multilateral lending, it would still be able to meet maturing debt obligations. Ukraine has working arrangements for the moment to transfer Russian gas and earn fees from this.

Mobilization Effects of Multilateral Development Banks

This study uses 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), that is, their ability to crowd-in capital from private creditors. Controlling for a large set of fixed effects, the paper shows evidence of positive and significant mobilization effects of multilateral lending on the size of bank inflows. The number of lenders and the average maturity of syndicated loans also increase. These effects are present not only on impact but last for 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 robust to numerous tests controlling for the role of confounding factors and unobserved heterogeneity. Finally, the results are economically sizable, indicating that MDBs can mobilize about seven dollars in bank credit over a three-year period for each dollar invested.

Philippines will likely be reliant on coal

Subject Philippine energy policy. Significance Christiana Figueres, who led negotiations over the 2015 Paris Agreement on climate change, last week said the Philippines could not afford to use coal “forever” and that renewables could help the country to achieve universal access to electricity. The Philippines’s coal-centred energy plans are at odds with its climate change commitments, its desire to become more self-sufficient in energy and its least-cost approach to energy sector investment. Impacts Given the lack of domestic investment capital, multilateral lending agencies will have scope to influence the country’s energy direction. Renewables will be increasingly competitive on Mindanao island and off-grid areas. Proposed LNG imports will increase the Philippines’s dependence on energy imports.