Rarely does one read about a private utility’s successful program to provide electricity to the urban poor. Rarer still is when the program is a profit-making venture and can serve as a learning experience for other countries around the world. But an Indian private utility, Tata Power Delhi Distribution Limited, in New Delhi, has been successful in providing electricity to 217 slums—with 175,000 customers—by engaging with the community. It has reduced non-technical losses and improved its revenues from $0.3 million to $17.5 million over the last five years.
As part of an initiative by the World Bank’s Energy Sector Management Assistance Program (ESMAP) on expanding electricity access to the urban poor, there have been many knowledge exchanges between Brazil, Colombia, Kenya and Jamaica to learn from each other’s experiences and implement best practices. Recently, ESMAP’s team along with delegations from Jamaica and Kenya, visited Tata’s project in India to understand the reason behind their success.
As population and economic growth bump up against finite—and increasingly degraded—water resources, competition between agricultural, industrial, and municipal water uses increases, putting stress on existing water sources. This stress is felt most acutely in urban areas, particularly among the urban poor.
Moreover, urban water management systems are inefficient, leading to an uneven quantity and availability of water and related services. In addition, urban water management must consider the effects of climate change, including rising temperatures, changes in precipitation patterns, and climate variability, on water resource availability.
Addressing these challenges requires building resilience not only in cities’ physical infrastructures but also in their social architecture, governance structures, financial systems, and ecosystems. A resilient city can adapt to changing conditions and withstand shocks while still providing essential services.
A boat trip from Port Elizabeth to Kingstown, in the Caribbean country of Saint Vincent and the Grenadines, is a one-hour trip that locals take several times a day. It was during one of these journeys that the boat of Kamara Jerome, a young Vincentian fisherman, ran out of gas six miles from Bequia City in what is termed locally as the "Bequia Channel." While waiting for help with strong wind gusts and the sun on his head, the idea of developing a boat that would run with wind and solar energy was born. Soon after, the idea became a prototype; a boat using green technology was on the water making 20-year-old Jerome a winner of international innovation competitions and a role model to other Caribbean youth.
In Mexico, young engineer Daniel Gomez runs a multimillion bio-diesel company originally conceived as a research project for his high school chemistry class. Gomez and his partners - Guillermo Colunga, Antonio Lopez, and Mauricio Pareja - founded SOLBEN (Solutions in bio-energy in Spanish) in their early twenties.
Although Daniel and Kamara have different educational backgrounds, they do share one important skill, the ability to identify a problem, develop an innovative solution, and take it to the market. In other words, being an entrepreneur, an alternative to be economically active, that seems to work and not only for a few.
The other day I had the opportunity to participate in the annual CAF conference on Infrastructure, this time held in Mexico City. The conference featured CAF's new IDEAL report on the state of infrastructure in Latin America and the conference, attended by many decision and opinion makers from across LAC, was organized around findings of the report.
I had a few takeaways from the discussions, notably that (1) there is convergence on a range of key issues and (2) there are some important Bank messages that are unique:
As many Colombian cities struggle to keep public transit ridership levels, one city is innovating using technology, gender-sensitive employment, and ideas from Asia to curb the “mototaxiing revolution” and restore ridership loss.
An increasing“motorbike revolution” – represented by spectacular increase in motorbike motorization and reliance on door-to-door motorized services – has changed the rules of the game and cannot be obviated in transport systems.
Flicking through the Uber website, we found that the company used to offer an “UberMoto” service in Paris from 2012 to 2013. Meanwhile, on the other side of the Atlantic, the local Colombian newspaper headlines discuss the legislation forbidding male passengers on motorcycles in a number of cities in an effort to curb moto-taxis.
The impact of motorbikes cannot be ignored. Purchase of motorbikes and operation of moto-taxis have been identified as key drivers for a modal shift from public transit to private vehicles in many places around the world, including Colombia. The nationwide phenomenon of moto-taxis has revolutionized mobility in small and medium-size Colombian cities, and has become a source of income for many.
In March we released the update from the Private Participation in Infrastructure (PPI) Database for the first six months of 2014, covering investment activity in energy, transport, and water and sanitation. The good news of a rebound of investment commitment from a decline in 2013 was noteworthy, alongside the heavy concentration of activity in Brazil.
The PPI Database’s 2014 full year update for these sectors has just been released, and it confirms the trends we began tracking for the first six months. Total investment in infrastructure commitments for projects with private participation in the energy, transport, and water and sanitation sectors increased six percent to $107.5 billion in 2014 from levels in the previous year. The total for 2014 is 91 percent of the five-year average for the period 2009-13, which is the fourth-highest level of investment commitment recorded – exceeded only by levels seen from 2010 through 2012.
This increase over 2013 was driven largely by activity in Brazil. Without Brazil, total investment commitments would have fallen by 18 percent, from $77.2 billion in 2013 to $63.4 billion in 2014. Although this is lower than H1 2014 (57%), Brazil’s large stake is a continuation of a recent trend.
The Latin America and the Caribbean (LAC) region saw $69 billion of investment commitments, or nearly 70 percent of the total for 2014. Three of the top five countries by investment commitments in 2014 were from LAC. The top five, in order, were Brazil, Turkey, Peru, Colombia, and India.
As world trade and investment have increasingly become organized around “value chains” – production lines that cross borders – Africa has struggled to reap the benefits of this trend, even as Asian and Latin American countries churned out cars, microchips, and textiles for consumers across the globe.
Some modern developments suggest that this could be changing – as global production networks have become more sophisticated, encompassing a wider variety of products and processes, they could provide new opportunities for African economies. But critical to success in this new environment are a good business climate, political will, and ease of trade on the continent.
We are issuing a call to action: On Thursday, as part of the World Bank-IMF Spring Meetings, the World Bank Group and Africa investor will host a panel discussion with African entrepreneurs, government officials, and other experts that you can watch online here: “Building African Participation in Global Value Chains.” The discussion will focus on how the different stakeholders – including businesses, banks, and governments – can work together to build African brands capable of creating jobs and increasing the continent’s role and influence on the global economic stage.
The Latin America and the Caribbean region is crying out for infrastructure improvements. An investment estimated at 5 percent of the region’s GDP — or US$250 billion per year — is required to develop projects that are fundamental for economic development. This includes not only improving highways, ports and bridges, but also building hospitals and creating better transport, public transit and other mobility solutions for smarter cities. Rising demand for infrastructure also is prompting countries to redouble efforts to attract greater private investment
Governments in the Latin America and the Caribbean region not only lack financing to address the infrastructure gap, but also face challenges in selecting the appropriate large infrastructure projects, planning the projects, managing and maintaining infrastructure assets — and gaining public support for private investment in public infrastructure.
However, PPPs are gaining ground in Latin America and the Caribbean. Beyond the larger economies of Brazil, Colombia and Mexico, assistance from the MIF and the Inter-American Development Bank (IDB) has enabled countries such as Paraguay to develop laws that pave the way for PPP projects. Just this week, Paraguay announced its first such project, which involves an investment of US$350 million to improve and build more than 150 kilometers of roads.
PPPs have been moving beyond classic interventions in public infrastructure, which have typically included roads, railways, power generation, and water- and waste-treatment facilities. The next wave of PPPs increasingly involves and provides social infrastructure: schools, hospitals and health services. In Brazil, IFC, the private sector arm of the World Bank Group, helped create the Hospital do Subúrbio, the country’s first PPP in health, which has dramatically improved emergency hospital services for one million people in the capital of the state of Bahia.
Higher education is more popular than ever in Latin America and the Caribbean (LAC), where gross enrollment rates have risen dramatically , according to World Bank estimates. But are these higher education students getting their money’s worth in terms of better jobs and higher incomes? To investigate this, we carried out an empirical study of two countries: Columbia and Chile. Our findings suggest that investing in higher education isn’t always profitable.