PPIAF

In many developing countries sub-national government entities are not permitted to borrow for infrastructure improvements on their own account—because national officials maintain direct control over infrastructure finance to ensure prudent use of debt. But as countries decentralize, municipalities and other sub-national entities will begin to oversee their own capital planning and financial management—and with limited ability to borrow from the capital markets.

PPIAF’s Sub-National Technical Assistance Program aims to help sub-national entities build their creditworthiness so they can access market-based finance for infrastructure investments. Technical assistance grants can help recipients strengthen their financial management, planning, and reporting. The grants can also help identify and fix problems of creditworthiness by supporting preparations for credit ratings by recognized credit rating agencies. Or they can help governments conceptualize and structure a debt-financed project.

• In Africa PPIAF’s Sub-National Technical Assistance Program is supporting an activity to facilitate a creditworthiness assessment and diagnostic process for six utilities, in Kenya (two), Uganda , Senegal (two) and Burkina Faso. As part of the activity governments will receive diagnostic credit assessment reports that identify key strengths and weaknesses and their potential to access local finance.
• In Swaziland PPIAF awarded the government funding to help build the creditworthiness of cities and sub-national entities as they upgrade their slums and finance related infrastructure. The Sub-National Technical Assistance Program will help the government examine ways in which equity financing could improve the creditworthiness and performance of sub-national state-owned enterprises.