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Global Infrastructure Facility

Infrastructure: Times Are a-Changin’

Laurence Carter's picture

Photo: Reychelle Ann Ignacio | Marketplace Designers 

Sometimes change creeps up on us. And we can step back and realize that the world is different. This rings true currently in the infrastructure space. Here are three examples:
  1. It’s now commonly agreed that we won’t achieve the Sustainable Development Goals without the involvement of private sector solutions: management, financing, and innovation. Involving the private sector is no longer an “if” question. We’re beyond ideology and calls for more aid transfers. Now we’re looking at “how”—and under what circumstances—crowding in private solutions help deliver better access to infrastructure services while being fiscally, environmentally, and socially sustainable.

    This is what the World Bank Group’s Maximizing Finance for Development initiative is about, for infrastructure and other sectors as well. Cameroon’s power sector is a good example, where sector reforms have been supported by public loans, which in turn have helped crowd in private and financing from development finance institutions (DFIs) for large investments like the 216 megawatt Kribi gas project.

An optimist’s view on climate-smart infrastructure

Vasuki Shastry's picture


Photo: RoyBuri | Pixabay

In developed countries, we tend to take infrastructure services for granted. It’s easy to forget, when living in London, Washington, or Singapore, how much lies behind the simple act of switching on the lights. But as a young person growing up in India in the 1960s, I knew what it was like to live with rampant electricity shortages and terrible roads. It was easy to complain about it, and we did. It seemed, then, that the solution was simple: government should simply cough up the money, get to work, and build the infrastructure.
 
But there was a lot more we didn’t think about. Behind good infrastructure systems lie much more than concrete, pipes and wires. There are other building blocks as well, such as sound policy, good regulations, viable institutions, and fruitful interactions between the public and private sectors.

Shifting the paradigm: Three routes to maximizing infrastructure finance for development

Frédéric Blanc-Brude's picture

Photo: Andreas Wecker | Flicker Creative Commons

By promoting better standards, methods and benchmarking, development finance institutions can move the mountain that is preventing institutional capital from flowing into infrastructure.
 
The World Bank Group's initiative to Maximize Finance for Development (MFD) aims to find solutions to crowd in all possible sources of finance, innovation, and expertise in order to achieve the Sustainable Development Goals (SDGs). In the case of infrastructure investment, a significant contribution to long-term sources of private finance is expected from institutional investors such as pension plans, life insurers, and sovereign wealth funds.
 
These investors have become increasingly interested in infrastructure investment in recent years, in search of new sources of returns, diversification, duration and inflation hedging. However, they cannot be expected to make a substantial and durable contribution to the long-term financing of infrastructure without three important changes:

GIF: making climate-smart infrastructure bankable

Michael Tran's picture


Photo: only_kim / Shutterstock.com 

There are many drivers of climate change, but few would disagree that energy infrastructure built according to “business-as-usual” standards is a major one. Meeting the lofty goals set at the 2015 Paris Climate Accords requires powering our homes, businesses, and government agencies with a cleaner mix of energy that includes more renewable sources. It also requires promoting standards that encourage energy efficiency—for example, for appliances or building codes—as a low-cost and high-impact way to reduce greenhouse gas (GHG) emissions. 
 
The Global Infrastructure Facility (GIF) is playing a positive role by preparing bankable, climate-smart projects that help countries build low-carbon energy infrastructure and encourage greater energy-efficiency measures. The GIF both drives and leverages private sector investments in climate-smart projects by promoting good governance and standardization in project preparation and has a sizeable portfolio of climate-smart projects in the pipeline.

Learning from Japan: PPPs for infrastructure resilience

Sanae Sasamori's picture
Also available in: Español | 日本語 


Photo: MediaFOTO/PIXTA

In March 2011, the Great East Japan Earthquake struck Japan, unleashing a tsunami that left some 20,000 people dead or missing. Sendai, the capital city of Miyagi Prefecture and a regional economic hub, was heavily affected by the disaster. About 500,000 residents in the city lost access to water, and the city’s primary wastewater treatment plant was completely submerged by the tsunami. Also, the tsunami damaged 325 kilometers of coastal railway assets and flooded about 100 kilometers of national highway in the Tohoku region, leading to the immediate closure of inland transport access to the devastated towns in need of assistance.
 
Four years later, while the recovery effort from the earthquake and tsunami was still underway, a private consortium signed a 30-year concession to operate Sendai Airport, making it the first state-owned airport in Japan operated by the private sector. This success was welcomed by policymakers and public-private partnership (PPP) practitioners with surprise—how could it be possible for a private operator to make a long-term investment decision in such a disaster-prone region?

Farewell 2017; Hello to More and Better Infrastructure in 2018

Jordan Z. Schwartz's picture


Photo: auphoto / Shutterstock.com

As Washington, D.C.’s infrastructure braces for its first winter freeze and 2017 draws to a close, this feels like the right moment for a recap on what the year has brought us in terms of closing the infrastructure gap across emerging markets and developing economies; policy directions within and outside of the World Bank Group; new instruments, tools, and resources; and—the proof in the pudding—actual investment levels.

There may not be one blog that can capture all of those themes in detail, but here is a brief overview of what 2017 has meant and what is on the docket for 2018 and beyond.

Helping Brazil realize its infrastructure promise

Paul Procee's picture


Photo: LWYang | Flickr Creative Commons

Since the 1980s, investment in Brazil’s infrastructure has declined from 5% to a little above 2% of the country’s Gross Domestic Product (GDP), scarcely enough to cover depreciation and far below that of most middle-income countries (see figure below). The result is a substantial infrastructure gap. Over the same period, Brazil has struggled with stagnant productivity growth. The poor status of infrastructure is broadly believed to be a key reason for Brazil’s growth malaise.

The Global Infrastructure Facility: What is it really and what have we been doing?

Towfiqua Hoque's picture

Photo: Ashim D'silva | Unsplash 

From “Billions to Trillions”, to the Hamburg Principles and Ambitions, to Maximizing Finance for Development (MFD), mobilizing private capital to deliver on the sustainable development agenda is in the spotlight. Realizing that constrained public and multilateral development bank (MDB) funding cannot fully address the critical challenges that developing nations face, the World Bank Group is pursuing private sector solutions whenever they can help achieve development goals, in order to reserve scarce public finance for when it’s needed most. This is especially true in the delivery of infrastructure.
 

As iron sharpens iron

Jeff Delmon's picture


Photo: totojang1977 / Shutterstock.com

In my last blog, I compared Public-Private Partnerships (PPPs) with marriage. I had explained that, though very different, the public and private can come together as they each possess characteristics beneficial to the other. Great in theory, but often difficult in practice.

Critics of PPPs abound and listing them here would be impractical. But whether they are auditors, civil society or within the World Bank Group, critics help us improve. We try to respond to our critics, including through blogs such as this one.

Three ways to manage construction risk to support infrastructure investment

Eric Dean Cook's picture


Photo: Pixabay

At the Global Infrastructure Facility (GIF) Advisory Council Meeting in March, we talked about construction risk and the way it shapes the delivery environment early in a project’s investment life. As a practicing engineer accustomed to attacking construction risk at the granular level, I enjoyed the broader discussion, particularly from the banking and credit perspective (meeting outcomes).

Unfortunately, construction risk realization will continue to be the norm. Perhaps we need to consider taking the longer view to reach potential investors by aligning the risk environment with risk tolerance.

Here are three ways to do this:


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