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Transport and climate change: Putting Argentina’s resilience to the test

Verónica Raffo's picture


Would you imagine having to evacuate your village by boat because the only road that takes you to your school and brings the goods is flooded?

In February 2018, the fiction became reality for some residents in the province of Salta, northern Argentina, after heavy rains caused the Bermejo and Pilcomayo river to overflow. The flooding resulted in one fatality, required the evacuation of hundreds of residents, and washed a segment of Provincial Route 54, leaving the village of Santa Victoria del Este completely stranded.

Similarly, a segment of National Route 5 in one of the main corridors of Mercosur has been impassable for more than a year due to the excess flows to the Picasa lagoon. The expansion of the lagoon is forcing 4,000 vehicles a day to make a 165-km detour, and adds one transit day for the 1,560 freight trains running every year between Buenos Aires and Mendoza. The flooding is dragging the economy behind and inflating already high logistics costs—a situation that is made worse by conflicts between provinces on how to deal with the water surplus.

As a matter of fact, a recent World Bank study put the cost of damages and disruptions like these at an estimated 0.34% of GDP a year for riverine flooding, plus 0.32% of the GDP for urban flooding.

To address these risks, Argentina’s Ministry of Transport started a dialogue with the World Bank to explore ways of reducing the vulnerability of the network.

Creating markets in Timor-Leste through a landmark port PPP

Christopher Bleakley's picture



As recently as 2006, Timor-Leste was in crisis. Only a few years into independence, the country was torn by riots and political turmoil. Not surprisingly, its business climate was one of the region’s worst.

But Timor-Leste’s fortunes have changed dramatically. Income from oil, coupled with greater stability and a long-term economic plan, led the World Bank to describe the country’s social and economic development as remarkable. Nonetheless, Timor-Leste remains a fragile state, and with oil accounting for 80 percent of GDP, it is the world’s second most oil-dependent nation.

Beating the odds? How PPPs fare in fragile countries.

Fernanda Ruiz Nunez's picture



While discussion about Maximizing Finance for Development (MFD) is ramping up with governments and the international development community to seek innovative approaches to mobilize more private sector investment in developing countries, there is a group of countries with an additional layer of complex challenges.

It brings me no pleasure to say this, but a fair number of countries have economic and financial conditions, business environments, and rule of law that are almost always weak. Clearly, these conditions significantly increase the risks of investing in infrastructure for the private sector; consequently, the markets for public-private partnerships (PPPs) tend to be less developed.

New report on private capital for infrastructure in the poorest countries: 2017 a stellar year

Deblina Saha's picture



What do Bangladesh, Honduras, and Senegal have in common?

They all have per capita Gross Net Income below $1,165, allowing them to borrow from the World Bank’s International Development Association (IDA) that provides concessional financing to the world’s poorest countries. There are 72 other such IDA-eligible countries.

IDA countries face many complex challenges in the new global economy, including underdeveloped infrastructure, inadequate access to basic services, and a lack of affordable financing.  IDA support simply is not enough to resolve the myriad of complexities in these countries, and governments need to seek alliances with the private sector—especially when it comes to building infrastructure sustainably.

Building bridges: cities helping cities achieve more – a Romanian-Japanese partnership

Marcel Ionescu-Heroiu's picture
The central square of the old town. Brasov
Photo: The central square of the old town. Brasov. Transylvania. By Ann Stryzhekin/ Shutterstock
When U.S. Commodore Matthew Perry arrived in Yokohama in 1854, it was a backwater village in Japan with a largely rural, relatively undeveloped economy. But it soon grew to an urban agglomeration with around 3.7 million people. Since then, Yokohama has managed to continuously reinvent itself – from a port city, to a large industrial area, and now to a modern, global service and lifestyle hub.
 
Within a century, Japan would become the world’s second largest economy. Its growth has been fueled by cities such as Tokyo, Yokohama, Osaka, and Kobe. Japanese cities can offer a myriad of lessons to their counterparts in developing countries.
 
Japanese cities are also at the forefront of dealing with some of the world’s most pressing challenges. For example, cities like Osaka and Toyama have developed a number of tools to address the social issues caused by rapid aging. Most developed and developing cities in the world will face similar challenges in the years to come. Providing a platform where these cities can learn from the experience of Japanese cities may lead to significant development impact.
 
Supported by a partnership between the World Bank and Japan, the Tokyo Development Learning Center (TDLC) does just that.

Addressing the risks from climate change in performance-based contracts

Chris Bennett's picture


Output and performance based road contracts (OPRC) is a contracting modality that is increasingly being used to help manage roads. Unlike traditional contracts, where the owners define what is to be done, and oftentimes how to do it, OPRC contracts define the outcome that the owners want to achieve, and the contractor is responsible to meet those outcomes. Performance is measured against a series of key performance indicators (KPIs) or service levels.
 
Critical to the success of any OPRC contract is the assignment of risk between parties. Climate change has major implications for OPRC contracts because it affects the risk exposure of both parties. With funding from the Public Private Infrastructure Advisory Facility (PPIAF), a new analysis considered how to incorporate climate change risks into OPRC contracts.
 
What’s Happening Right Now?
 
Without clear expectations around climate risk, neither the asset owner nor the companies bidding for performance contracts will adequately address the risks. Bidders cannot be held accountable for risks that are not specifically cited or linked with performance criteria.
 
At present, climate change risks are generally carried by the asset owner through the Force Majeure provisions of the contract, and treated as ‘unforeseen’ events, with repair costs reimbursed to the contractor. This impacts the overall cost of the OPRC, and where extreme weather events are becoming common-place, reduces the efficacy of OPRC as a contracting modality. The most pressing issues challenging stakeholders during each phase of development are summarized in this chart.

Three ways governments can create the conditions for successful PPPs

Lincoln Flor's picture
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A healthy Public-Private Partnership (PPP) has several defining features: strong competition, bankability with low financial costs, lower risk of renegotiations, secure value for money, and efficiency gains.

What does it take for countries to develop PPPs that can fit this description? Why is it that some countries such as India, Colombia, Turkey, and Egypt have been able to develop strong and successful PPP programs while others have not been able to award any projects under special-purpose PPP legislations? 

Our experience with infrastructure PPPs across the globe suggests that three institutional pillars are needed to increase the probability of PPP success.

In the line of fire: lessons from a California architect on rebuilding resiliently

Sunny Kaplan's picture


Photo: Tony Salas | Flickr Creative Commons

In my home state of California in the United States, major drought-fueled wildfires tore across the state in the latter half of 2017 setting records for both the state’s deadliest fire, as well as the largest fire. Wildfire season is back in 2018 with the most destructive year ever—currently more than 13,000 firefighters are battling 9 large blazes that have damaged or destroyed over 2,000 homes or buildings and scorched over 730,000 acres of land.
 
The Mendocino Complex fire in Northern California recently broke the state’s previous record for largest fire, spreading furiously due to heat, wind, and years of drought. 

California’s Governor Jerry Brown said this is becoming the new normal…where fires threaten people’s lives, property, neighborhoods and, of course, billions and billions of dollars. Many point to climate change as the driver for weather conditions fueling most of the wildfires. July was the hottest on record for the state, and extreme weather is causing larger and more destructive fires across the whole western United States.

Under this “new normal” how do designers and city planners even begin to rebuild quality infrastructure affordably, resiliently, and sustainably?

Global Water Security and Sanitation Partnership: Scaling up financing outreach at World Water Week

Joel Kolker's picture

The latest news about the finance world usually involves stories of blockchain technology, acquisitions and mergers, and stock market fluctuations. But the world of finance is also central to the Sustainable Development Goals and particularly the objective of universal access in the water and sanitation sector. Financing, whether public or private, is essential to the development, maintenance and improvement of water supply and sanitation (WSS) systems.

That’s why scaling-up finance for water is crucial if we are to reach the Sustainable Development Goals (SDGs) in the water sector. The SDGs call upon the world to achieve universal WSS access that is safe, affordable, and available to all by 2030. In addition, the SDGs include targets for increasing efficiency of water use across all sectors, protecting and restoring water-related ecosystems, and improving water quality. And water is a fundamental prerequisite to the achievement of all 17 of the goals – water flows through and connects all the other SDGs.  

However, many people still live in areas where WSS systems are inadequate or even unavailable. Although drinking water is essential to life, across the world today 2.1 billion people lack reliable access to safely managed drinking water services and 4.5 billion lack safely managed sanitation services. In Sub-Saharan Africa alone, 42 percent of people lack improved water sources within a 30-minute roundtrip.

The World Bank Group’s Global Water Security and Sanitation Partnership (GWSP) understands that additional finance for water infrastructure is absolutely critical to achieve the SDGs. The WSS sector alone requires six times more financing than governments, the private sector, and donors are currently funding.

When elephants fight, it is the grass that suffers

Mark Moseley's picture


Photo: shplendid | Flickr Creative Commons

Talk of trade tariffs and heightened geopolitical tensions are dominating news headlines recently. As developed economies consider escalating protectionist policies, it’s easy to forget about the situation many emerging markets face.

As outlined in the World Bank’s Global Economic Prospects report released in June this year, protectionist policies would affect emerging market and developing economies (EMDEs) more severely than advanced economies. And this is at a time where increased investment and spending in EMDEs, including in infrastructure, is sorely needed.


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