1. The entity in this case study is a fictional country named Kawa.Kawa is a land locked country withtotal
land mass of 573,000 km2
, out of which 85% is arable and suitable for crop production and animal
husbandry. The country has a population of 120 million people and is poised to grow by 1.5% over the
next 20 years. The country is young with an average population of 23 years and the proportion of 0-30
representing 49% of the country population. This young population provides a ripe opportunity for
demographic dividends if developmental programs are well implemented.
The governmentisresolute toreversethe verylow developmentoutcomesof the countryasrural-urban
migrationdominateregional movementandlimitthe abilityof the countrytodevelopitsagriculture base
and hence builda sustainable developmentpath.Inthisregard, the governmenthasdevelopeda5 year
development plan with agriculture, health and education at the heart of the plan. The country aims to
improve the literacy rate by 10% from 28% at the moment. In addition, the country requires that rural-
urbanlinkage be improvedthroughthe expansionof roadnetworksby 100 km/year of intra countryand
regional high ways.
The transportation component of the project is being developed to attract funding from local and
international investors due to its critical nature to the success of the economic development plans. The
projectcomprisesa governmentcontributionarmand a bondissuance withfundamentalsbasedonthe
export promotion element of the road project as well as the rural-urban integration. According to
estimates, the road construction will cost $290,639 per km of paved road. In total, the country requires
$145.32 milliontoachievethe aimstatedandiswillingtostructure the fundacquisitionthroughamixture
of catalytic and private finance.
The fund acquisition as stated Is planned to be achieved through a mixture of catalytic and private
financing. Being a landlocked and poor country, the government of Kawa aims to use a combination of
state contributionandconcessional finance fromIDA to developexportfacilitation structuresandsettle
the land claimsalongthe road networks.Inaddition,the debtfinancingwillbe soughtthrougha 20 year
issuance which will be structured with the aim of ensuring the implementation of the projects.
It is anticipatedthatthe use of state contributionandconcessional financingfromIDA to developexport
facilitation structures and resolve land claims will help ensure the viability of the underlying economic
activitiesof the projectandmitigateanyprojectimplementationriskthatcanarise fromlandclaims.This
will eventually,helptomitigate therisksinvolvedintheprojectandensure thesustainabilityof theproject
as a whole.