|
Financing urban infrastructure/services in developing
countries is characterized by four primary challenges: underdeveloped
capital markets for local government financing, weak local
capacity in delivering services and managing and financing
infrastructure projects, limited local resource mobilization,
and poorly organized information to monitor fiscal performance
and financial status. Our approach to municipal finance is
to:
Create Enabling Conditions. We create enabling
conditions for the adoption of wide-scale and sustainable
municipal reforms by establishing appropriate policy environments
fiscal incentives, and regulatory and institutional frameworks.
Our project work is focused on promoting:
Urban Reforms. We assist governments in formulating
comprehensive policy, legal, legislative, and regulatory
changes that facilitates the development of municipal financing.
In India, TCGI and its partners led policy makers to adopt
policies and programs that facilitated the commercial viability
of urban infrastructure services through the Financial Institutions
Reform & Expansion (FIRE) program.
Good Governance. We assist national, state,
and local governments in adopting good governance policies
to build managerial and financial capacity. Our work includes
designing a five-year local governance improvement program
for USAID/ Colombia and managing the Good Urban Governance
in South Asia (GUGSA) program to evaluate and disseminate
good urban governance practices in Bangladesh, India, Nepal,
and Sri Lanka.
Create Implementing Capacity.
To improve the ability of local governments to finance infrastructure
projects, we focus on building capacity for commercially viable
infrastructure at the state and municipal levels. Our implementing
capacity work focuses on:
Local Resource Mobilization. Many local governments
fail to generate sufficient local revenues to cover operating
costs, let alone capital investment. Municipalities rely
heavily on national and state funding for support. TCGI
works with governments to improve local financial resources.
In Zambia, we completed an assessment of local government
revenue generation and intergovernmental transfers to improve
local financial capacity to deliver services.
Credit Worthiness. Central to the development
of market-based infrastructure financing is an active municipal
credit rating system. We assist municipalities in acquiring
credit ratings and improving credit worthiness. Under FIRE,
we have worked with India’s leading credit agencies
to conduct 35 municipal credit ratings. In the Philippines,
we supported the municipal bond insurance work of LGUGC by
facilitating the use of the credit guarantees under the
USAID Development Credit Authority (DCA).
Commercially Viable Projects. We believe infrastructure
and urban environmental services (water, sanitation, and
solid waste) can be commercially viable. In India, for example,
we have worked with more than 60 cities to structure commercially
viable municipal projects. Our work resulted in the issuance
of India’s first municipal bond in 1996, the first
pooled municipal bond in 1998, and a second pooled municipal
bond in 2002. To date, TCGI has assisted in more than 13
municipal bond offerings in India alone.
Human Capital Development. For projects to
be truly sustainable, we also focus on human capital development.
We are engaged in educating and training both government
officials and financiers on municipal finance. In South
Africa, TCGI provided training for government officials
in infrastructure development. The seminars were designed
to increase the capacity and understanding of local city
managers to be more effective, responsive, and accountable
in municipal finance.
CONTINUE
|
