Foreign exchange risk mitigation for power and water projects in developing countries

Abstract

The objective of this paper is to explain how foreign exchange risk affects power and water infrastructure projects, to analyze the effectiveness of mechanisms that have been used to mitigate foreign exchange risk and examine how they may be improved, and to suggest roles for donor agencies in facilitating foreign exchange risk mitigation. A key theme of the paper is that the most appropriate mechanism for mitigating foreign exchange risk will be determined by the specific circumstances of the project and country in question. The paper is designed to serve as an introduction to foreign exchange risk for stakeholders in the development and financing of infrastructure projects-government officials, consumers, sponsors, investors, and donor agencies-and as an aid for designing foreign exchange risk mitigation mechanisms for specific projects and countries.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 33 citations exist upstream.