Financing the City
Session 3: New Approaches to Local Currency Financing

3 May 2005 (2:00 p.m. - 4:00 p.m.)

Cities in developing countries need billions of dollars in offshore investments to promote infrastructure growth. However, developers and foreign investors remain shy of investing due to currency risk. Policy makers are now concerned that adverse exchange rate fluctuations could destabilize the financial viability of urban infrastructure projects. The seminar will cover such projects' borrowing and hedging needs. It will discuss various straightforward and synthetic options to attract local currency financing and to diversify the funding sources to finance urban infrastructure. An overview will be presented on emerging trends in development of innovative financing instruments, strategies for emerging market borrowers and issuers, and trends in currency risk management.

Keynote speakers will discuss the following:

• Role that multilateral agencies could play to facilitate access to international capital, develop innovative financial instruments, and mitigate unhedged currency risks to promote private sector led growth in support of city infrastructure.
• Developments required to mitigate perceived high risks where private investors are hesitant to make a continued commitment for fear of currency and tenor mismatches.
• What can policymakers do to diversify the sources to meet huge funding requirements of urban infrastructure projects and to enable the financial system meet the demand for long-term local currency funds?

Read the Brief Report by Ajay Sagar, ADB.

Contact Us

For further information, contact Mr. Ajay Sagar, Tel. No. (+90-212) 241-8000 loc. 2303, email: asagar@adb.org

Read the News Release.