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Risking the future for the present. Crisis Response. Local Government Financing Platforms – Process 1. Local Govt #1 takes back the money from the platform It then uses the funds to pay back its debt to Local Govt. #2. Local Govt. #1 is unable to borrow directly from Banks / Capital markets
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Risking the future for the present Crisis Response
Local Government Financing Platforms – Process 1 • Local Govt #1 takes back the money from the platform • It then uses the funds to pay back its debt to Local Govt. #2 • Local Govt. #1 is unable to borrow directly from Banks / Capital markets • Local Govt. #1 Borrows instead from Local Govt. #2 • Loan is used to found and Capitalize a LGFP under Govt. #1’s control • Local Govt. Financing Platform #1 is able to borrow from Banks • Financing Platform can borrow from Banks • Financing Platform funds projects Local Government #1 Loan PROJECT Local Government #2 Repays Loan Controls Capital Injection PROJECT Financing Loan Loan Local Govt. #1’s Financing Platform $$$$BANK$$$$ Loan $$$$BANK$$$$