Resource-backed loans as development finance: a reflection

Development finance has become a major policy and programmatic factor developing countries have to decide on routinely. These countries often face investors’ perceptions as high financial risk destinations, thus limiting their access to international capital markets. As a result, developing countries have to explore alternative financing models to circumvent the prevalent and at times unjustified risk perceptions. For natural resource-rich developing countries, development financing/support is being secured in exchange for, or collateralized by, future streams of income/volume from the natural resource wealth. This financing model has been labeled “resource-backed loans” (RBLs).