Cofinancing and infrastructure project outcomes in Chinese lending and overseas development finance

Yangsiyu Lu, Cecilia Springer and Bjarne Steffen

World Development, 2024, vol. 175, issue C

Abstract: Cofinancing from government agencies, development banks, and private actors is acknowledged as an important tool to bridge the infrastructure finance gap in developing countries, but relatively little is known about outcomes for cofinanced projects. To fill this void, we explore the role of cofinancing in shaping Chinese lending and overseas development finance for infrastructure projects in terms of implementation outcomes and environmental performance. We examine a sample of 2997 infrastructure projects committed between 2000 and 2017 that were funded by Chinese finance, among which 15 percent are cofinanced. Our study shows that cofinancing correlates with higher infrastructure project completion rates, as cofinanced projects are 3.3–7.1 percentage points less likely to be cancelled or suspended than non-cofinanced ones. We also find that cofinancing with certain partners suggests specific benefits. Cofinancing with partners from the recipient country is associated with more localized implementation, whereas cofinancing with international partners has demonstrated improved environmental performance, with a 2.7 percent lower carbon dioxide emissions intensity and a 0.42 standard deviation decrease in biodiversity risks. The results suggest that cofinancing could be an effective tool to enhance infrastructure project success and achieve greater sustainable performance in Chinese lending and overseas development finance.

Keywords: Cofinancing; Development finance; China’s Belt Road Initiative; Infrastructure project implementation; Environmental impacts (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0305750X23002917
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:175:y:2024:i:c:s0305750x23002917

DOI: 10.1016/j.worlddev.2023.106473

Access Statistics for this article

World Development is currently edited by O. T. Coomes

More articles in World Development from Elsevier
Bibliographic data for series maintained by Catherine Liu ().