Source: Veritas Prep

Among developing nations, Latin American states are more likely than Asian nations to place power in the hands of communist-leaning chieftains creating hostile environments for Western firms and discouraging aid groups from undertaking development initiatives, and prefer unconditional loans.

A: creating hostile environments for Western firms and discouraging aid groups from undertaking development initiatives, and prefer
B: creating hostile environments for Western firms, discouraging aid groups from undertaking development initiatives, and preferring
C: that create hostile environments for Western firms and discourage aid groups from undertaking development initiatives, and prefer
D: that create hostile environments for Western firms and discourage aid groups from undertaking development initiatives, preferring
E: that create hostile environments for Western firms, discouraging aid groups from undertaking development initiatives and preferring

OA: D

Lets D take
Noun Modifier: that create hostile environments for Western firms
Noun modifier: that discourage aid groups from undertaking development initiatives
COMMA+ING: preferring unconditional loans

Someone can shed some light on these.

Confusing construction.