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This paper proposes and illustrates a methodology to assess the economic cost of the sovereign risk finance instruments available to the Government of Ethiopia and its development partners for financing the shock-responsive scalability component of the Productive Safety Net Programme. The methodology involves: (i) specifying rules for when additional expenditures would be triggered in each woreda; (ii) specifying alternative risk finance strategies; and (iii) analyzing the costs of each risk financing strategy, including sensitivity and scenario testing of the results. The methodology is applied to a hypothetical set of rules for drought-responsive scalability, and a range of potential risk finance strategies.

The purpose of this paper is to contribute to theunderstanding and discussion of how the costs andbenefits of natural resource development are sharedacross society. This paper presents how IFC, as both aninvestor and a development organization, determineswhether benefits and costs are shared reasonably, and how this assessment influences IFC’s decision to invest ina particular natural resource project. the goal of the paper is to promotea broad, constructive dialogue across stakeholders—governments, investors, civil society, and others—around benefit sharing. The paper draws on IFC’s experience and presents anoverarching framework for multi-stakeholder benefitsharing, providing analysis and guidance for a range ofcomplex topics. The paper is intended to provide entrypoints for stakeholders of varying levels of familiarity with the issues to benefit-sharing assessment. The paper is not a definitive manual for all the issues coveredfor which more detailed, high-quality and excellentreferences and literature exists. This paper is organized along these broad areas of impact that IFC considers in the benefit sharing assessment:fiscal, economic, environmental, and social. The approaches IFC uses to evaluate benefit sharing arepresented in each area, along with some lessons learned. This is complemented by a discussion of key issues thatare topical in the field. Each chapter opens with a list of questions that can be used as a guide to assess the potential benefits and costs of an investment. As a result, there is a spectrum of what can be considered reasonable overall. However, there may be particular features of a benefit-sharing arrangement that stand out and can signal a risk to its legitimacy. Our aspiration is that this paper will complement as well as stimulate work by others that can enhance the collective knowledge and encourage dialogue.

This report explores the potential financing mechanism options that can be employed to catalyze more private sector investment in clean energy (renewable energy and energy efficiency) in the small island developing states (SIDS). Various financial instruments that have been used successfully to date are described and placed in the context of the issues and constraints of the SIDS, with suggested options for discussion and follow up. Green infrastructure finance, as defined in the report, makes the important point that is the combination of financial and nonfinancial interventions and instruments that can make green investments in infrastructure more affordable and less risky to private sponsors, financial markets, and governments. The objective of this report is to identify and assess options that can help increase investment in renewable energy and energy efficiency in SIDS through the adoption and funding of financing mechanisms by SIDS and development partners with special attention given to the role that the private sector can play. Many renewable energy technologies are characterized by high initial capital costs with relatively low operating costs compared to thermal alternatives. By providing an analysis of options for a financing facility to catalyze renewable energy and energy efficiency, this work is intended to inform the discussions among SIDS and development partners interested in actions to stimulate investment in renewable energy and energy efficiency. This report summarizes the results of the two stages. The assessment and selection of options identifies a number of measures that will be needed to stimulate increased private sector participation - project sponsors and developers, equity funds, lending institutions - for energy efficiency and renewable energy. The background material reviewed for this report has been summarized in the annexes.

Detailed principles of accounting for financial instruments have been prescribed in Financial Instruments Regulation, but some general principles in that area have also been outlined in the Accounting Act. According to article 3, paragraph 1, point 23 of the accounting act, financial instrument is defined as any contract giving rise to financial assets of one entity and a financial liability or an equity instrument of another entity, on condition that the contract concluded by two or more parties clearly results in economic effects, irrespective of whether the execution of contractual rights or obligations in unconditional or conditional. Financial assets include: monetary assets (assets in the form of domestic currency, foreign currencies and foreign exchange instruments and other financial assets, in particular accrued interest on financial assets, equity instruments issued by other entities, and contractual right to receive monetary assets or to exchange financial instruments with another entity under favorable conditions. Equity instruments are defined as contracts which give right to assets of an entity which remain after satisfying or securing all its creditors, as well as an obligation of an entity to issue or deliver its own equity instruments, in particular shares, share options or warrants.

Running a business involves continuous growth. Such growth can be organic, stemming from resources created internally in the enterprise. However, in many cases an external development strategy is adopted, based on acquisition of other entities. Such an acquisition may involve creation of a capital group, within which each of the companies maintains its separate legal personality. However, if a capital group is not the optimal form for the given business activity, acquisition of another entity may take form of a business combination. In such case, assets and liabilities of the acquire are directly incorporated into the books of the acquirer. The overriding principle of accounting regulation is primacy of economic substance over legal format. Pursuant to this principle, economic transactions must be recorded in the accounting records in accordance with their economic nature1. In order to determine properly the economic nature of a business combination, an analysis must be performed of economic impacts of such a combination. Economic consequences for merging entities are described in the provisions of commercial law.

This paper focused on the delivery mechanisms for bilateral, multi-lateral, host government subsidy, and consumer cross-subsidy funding to enhance private sector investment. However, the specific source of funds is not deemed to be especially relevant for the purposes of this working paper. Focus on some of the useful characteristics of Output-Based Aid (OBA) experience to date that may be relevant. Propose an option for how OBA experience could be used to deliver national and programmatic supports to projects in middle- and low-income countries in coordination with other multi-lateral development bank instruments such as concessional loans and credits. This working paper does not: specifically address strengths and weaknesses of the clean development mechanism and only briefly touches on issues with using carbon finance in the current market. Carry out an assessment of experience with feed-in tariffs or advanced market commitments, or indeed other results orientated schemes.

A major problem in the transition countries of Europe and Central Asia (ECA) during the transition was the breakdown of the relationships of farms with input suppliers and output markets. The simultaneous privatization and restructuring of the farms and of the up- and downstream companies in the agrifood chain has caused major disruptions. The result is that many farms and rural households face serious constraints in accessing essential inputs (feed, fertilizer, seeds, capital, etc.) and in selling their products. The problems are worsened by the lack of public institutions necessary to support market-based transactions, such as for enforcing property rights and contractual agreements. The objective of the study is to analyze Vertical Coordination (VC) in agrifood supply chains in ECA and to identify options for improved policies, institutions, and investments which Governments could make, and which the World Bank could support, in order to improve links in the agricultural marketing and processing chain and increase access of farmers to input and output markets. This is especially important in those countries where contractual arrangements are slow to develop. It is also important if farmers are to be lifted out of subsistence farming and into a modern agrifood economy.

Contingent liabilities create management problems for governments. They have a cost, but judging what the cost is and whether it is worth incurring is difficult. Except in the case of contingent liabilities created by simple guarantees of debt, governments usually can incur contingent liabilities without budgetary approval or recognition in the governments accounts. So governments may prefer contingent liabilities to other obligations. (The uncertainty surrounding contingent liabilities can work differently. It is well known that PPPs create contingent liabilities, and the International Monetary Fund (IMF), the World Bank, and others often warn of the risks. The initial reaction of a cautious Ministry of Finance may be to seek to avoid all contingent liabilities.) Management problems also arise once a government has incurred a contingent liability. Projects need to be monitored to reduce risks if possible. Spending on contingent liabilities must sometimes be forecast, despite the difficulty.

Real Gross Domestic product (GDP) in Thailand is projected to grow at 5.0 percent in 2008, driven by recovery in domestic demand. The key reason for the strengthened growth this year is the higher confidence of both consumers and investors with the return of democracy and the election of a new government late in 2007. Last year's better than-expected growth of 4.8 percent was due to buoyant export performance throughout the year even as domestic consumption and investment declined amidst the uncertain political environment and sudden shifts in policy. But this year, the opposite is likely. The external current account may weaken slightly in 2008, as the global downturn slows exports and robust domestic demand stimulates imports. Private investment should recover after its slump last year. Recovery in private consumption and investment could be fragile as there remain large down side risks to their growth, but could be mitigated by additional fiscal stimulus. In addition to the short-term measures have been introduced by the government to mitigate risks this year and next, longer term measures are needed to sustain Thailand's growth and poverty alleviation.