Multilateral Development Banks as Overarching Protectors of Green Infrastructure Projects

Abstract

This chapter shows that multilateral development banks’ (MDBs) operating instruments such as guarantees and equity investments are considered to be an external protective device as they can provide protections for institutional investors outside the system of developing countries based on MDBs’ strong negotiation power vis-à-vis the governments of developing countries. To this end, this chapter begins with a succinct explanation of MDBs’ operating mechanisms and instruments such as guarantees, equity, and loans. Secondly, the chapter indicates that the key strength of MDB involvements is that MDBs can attract much larger amounts of private investment relative to just the small amount of money to which they provide protection. Thirdly, the chapter examines the question of how to engage MDBs in green infrastructure financing. Lastly, this chapter makes some suggestions to scale-up MDB involvements in green infrastructure markets of emerging and developing countries.