Insolvency Laws

Photo Credit: Image by Steve Buissinne from Pixabay
When contemplating any form of financing of infrastructure project, the host country’s insolvency laws will need to be understood by all parties concerned. Any host country seeking to attract private sector investment will need to have transparent and efficient insolvency laws which are fair to the parties concerned and are consistent with an ever more standardized international standard. Key issues that will need to be addressed when contemplating an infrastructure project are: The World Bank, in its capacity as the international community's standard setter (under the Financial Stability Forum) for insolvency and creditor rights ("ICR") systems, has coordinated the effort to articulate a set of assessment standards (the "Principles") regarding ICR regimes. The Principles are used for, among other things, the preparation of ICR Reports on the Observance of Standards and Codes (ROSCs) under the joint World Bank/IMF international financial architecture program. This as well as other relevant information can be found on the World Bank Global Insolvency Law Database under Principles and Guidelines. The ROSC program operationalizes a number of normative instruments in the ICR sphere, including the Principles and the detailed UNCITRAL Legislative Recommendations on insolvency that provide specific guidance on the content of an insolvency law, with an extensive discussion of various options and approaches: Additional guidelines on designing systems that adequately address insolvency and creditor rights can be found on European Bank for Reconstruction and Development Specific examples of national laws can be found at World Bank's Doing Business.
Updated: December 15, 2022