The article I read that in originally references a mixture of private and "IFI funding"[1] which I took to mean International Financial Institutions (which includes IMF/WorldBank etc. who make loans denominated in USD)[2].
The book I referenced above is by John Perkins who worked as a consultant for a company who would justify huge loans denominated in USD for power infrastructure to developing nations, but a significant majority of the work and materials would come from US companies. So the World Bank or the IMF would loan tonnes of money to someone in USD, much of it being transferred directly to companies in the US anyway, and leaving the nation with a large debt to service in a currency they do not issue (leaving them vulnerable to pressure from the US to export goods, for example, even though people require them locally, to liberalised trade agreements, or even to be allies in conflict etc. all sorts of sordid shit; the John Perkins stuff is well worth reading).
When governments take on large debts denominated in a currency they do not issue, it's always a cause for concern. That's why MMT academics were against the Euro[3], and why so many developing nations are now locked into crippling debt service that they cannot possibly keep up with.
Countries like the US, UK, Australia and Japan who only issue debt (ie. all currency or treasury securities) denominated in their own currency, have no risk of insolvency and no trouble servicing the debt[4] -- they can choose to stop paying interest any time they want and indeed the "debt" people refer to in those economies is really a "buffer stock" rather than a "bond market"[5]
When a nation that does not issue USD (ie. any nation other than the US) takes on USD denominated debt, with interest payments denominated in USD, they're up shit creek without a paddle.
Ah I see, no I wouldn't mean to take it as the IMF although they may have been part of the loan. A big chunk of the money is from climate investment funds (CIFs), which come from IFIs, of which in particular the regional IFI, the African Development Bank, in addition to private loans from Saudi Arabia and Germany. In fact it's co-owned by some of those companies, e.g. the saudi ACWA Power, the Spanish TSK etc.
Anyway, it doesn't matter as indeed all of those could be dollar denominated. I don't know if they are. It's extremely common for, particularly in english/international reporting, numbers to be reported in dollar equivalents. Whether that's the actual denomination of the loan I don't know. I do know Morocco struggles deeply with hard currency scarcity, particularly in the realm of necessary energy imports every year, so they're well aware of the issues surrounding obligations in foreign currency denominations. There's a lot of fluff pieces on this project but sadly little deep insight in how it's all structured.
Thanks for the book reference. I'd not read it but I've been introduced to the issue in college classes many times, it features heavily in international political economy classes for example of which I took a few. I hope to find some time this semester to look into all the resources you linked me, thanks for that!
The book I referenced above is by John Perkins who worked as a consultant for a company who would justify huge loans denominated in USD for power infrastructure to developing nations, but a significant majority of the work and materials would come from US companies. So the World Bank or the IMF would loan tonnes of money to someone in USD, much of it being transferred directly to companies in the US anyway, and leaving the nation with a large debt to service in a currency they do not issue (leaving them vulnerable to pressure from the US to export goods, for example, even though people require them locally, to liberalised trade agreements, or even to be allies in conflict etc. all sorts of sordid shit; the John Perkins stuff is well worth reading).
When governments take on large debts denominated in a currency they do not issue, it's always a cause for concern. That's why MMT academics were against the Euro[3], and why so many developing nations are now locked into crippling debt service that they cannot possibly keep up with.
Countries like the US, UK, Australia and Japan who only issue debt (ie. all currency or treasury securities) denominated in their own currency, have no risk of insolvency and no trouble servicing the debt[4] -- they can choose to stop paying interest any time they want and indeed the "debt" people refer to in those economies is really a "buffer stock" rather than a "bond market"[5]
When a nation that does not issue USD (ie. any nation other than the US) takes on USD denominated debt, with interest payments denominated in USD, they're up shit creek without a paddle.
[1] http://www.worldfinance.com/infrastructure-investment/projec...
[2] https://en.wikipedia.org/wiki/International_financial_instit...
[3] http://www.amazon.com/Eurozone-Dystopia-Groupthink-Denial-Gr...
[4] https://www.youtube.com/watch?v=i35uBVeNp6c
[5] https://www.youtube.com/watch?v=soVyyyXrcwo&index=6&list=PLo...