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Sovereign Financial Guarantees

States issue financial guarantees in order to financially promote projects that are deemed to be in the public interest. The guarantees are used as economic incentives for the capital market to finance the projects. In Sweden, for example, financial guarantees have in the past been used to promote agriculture, fishing, housing construction, shipbuilding and energy supply. From the beginning of the 90’s, they have primarily been used to alleviate the Swedish bank crisis and for promoting investment in the infrastructure.