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PPIAF’s recipe for enabling PPP finance: Good infrastructure governance

Jemima Sy's picture


It takes a lot to do a first Public-Private Partnership (PPP) well. In the past 12 months, we witnessed the successful financial close of two landmark PPPs: the Tibar Bay Port PPP—a first for Timor-Leste, one of the youngest countries in the world—and the Kigali Bulk Water project in Rwanda, considered the first water build-operate-transfer project in Sub-Saharan Africa.

To make these projects happen, deal teams, sponsors, and financiers did outstanding work in difficult environments. The Public-Private Infrastructure Advisory Facility (PPIAF) also earned some bragging rights and a share of the battle scars along with these actors.

How Singapore and the GIF are bridging the infrastructure gap in Asia and beyond

Kathy Lai's picture



With support from the World Bank Group, Singapore invested heavily in infrastructure during the early stages of our growth. This included 14 World Bank loans between 1963 and 1975, which financed the development of the deep sea terminal at the Port of Singapore, the doubling of the country’s energy capacity, and the construction of water pipelines to Malaysia—all of which remain a part of our core infrastructure today.

How Islamic finance can boost infrastructure development

Joaquim Levy's picture
Queen Alia International Airport, Jordan. © littlesam/Shutterstock
Queen Alia International Airport, Jordan. © littlesam/Shutterstock

In many developing countries, there are glaring gaps in the quantity of infrastructure per capita. For example, power generation capacity per person in these countries is only one-fifth that of advanced economies. We know that expanding infrastructure investment in economic and social services is an effective way both to promote inclusive growth and to foster local resilience to global shocks. In particular, investment in quality, sustainable infrastructure helps finance the transition towards a low-carbon, more environmentally friendly economic model. This happens notably in the renewable energy and low-emission transport sectors. Given the scale of resources needed to address the infrastructure investment gap, mobilizing the private sector for this goal has become imperative, especially in countries where financial transactions in banking and capital markets follow Islamic law (or shari’ah) principles.
 
The conventions of Islamic finance are particularly suitable for infrastructure development. They define an asset-oriented system of ethical financial intermediation built on the principles of risk-sharing in lawful activities (halal) rather than rent-seeking gains. This “entrepreneurial” approach by investors requires a high degree of transparency and creates incentives to monitor projects more carefully, which, in turn, strengthen the efficiency in building and operating infrastructure.

Want successful urban transport mega-projects? Here are seven things you should keep in mind

Bianca Bianchi Alves's picture


In 2002, Sao Paulo’s embarked in one of the most transformative transport projects of the decade: the construction of Metro Line 4. The new line had big ambitions: it was meant to significantly improve the commuting experience, better connect the south and western regions of the Sao Paulo Metropolitan Region (SPMR) to the center, change the metro system from a radial to a flexible network, and interconnect all transport modes, including buses, suburban trains (CPTM), bicycles, as well as existing and future metro lines.

Line 4 was also the first metro project in Brazil to be designed as a Public-Private Partnership, whereby operation and maintenance (O&M) was concessioned to a private company for 30 years. The project was segmented into 2 construction phases, both of which were technically and financially supported by the World Bank from 2002.

When finished, Metro Line 4 will feature a total of 11 stations along a 14.4-km alignment, 29 trains in operation, four integrated bus terminals, and one dedicated train yard. It will carry nearly 1 million passengers per day. Since the opening of the first segment in 2010, the line has experienced high passenger traffic and allowed for a significant reduction in journey times. In 2012, Line 4 even featured among the 100 most innovative infrastructure projects in the world.

A new station was inaugurated just a few weeks ago, and the line is now just one station away from completion. Once the whole project is operational by 2020, aha resident of Vila Sonia in the western part of the city will need only 20 minutes to reach Luz station at the opposite side of the city, compared to one hour in 2002.Today they can already reach it in 32 minutes!

Now that the Line 4 odyssey has almost concluded, it can teach us a number of valuable lessons about what it takes to implement such complex infrastructure projects in a dense urban area like Sao Paulo.

Subtle but significant changes to private infrastructure investment in first half of 2018

Jordan Z. Schwartz's picture



Like winter and summer solstices of investment cycles, every six months we take stock of how much private participation in infrastructure has come to financial close across emerging markets.  From Mozambique to Moldova, Chile to China—in power, water, transport, and the backbone of telecom services—the World Bank Group tracks every new public-private partnership (PPP), privatization, auction, concession, lease, and management contract through our PPI Database.

Does monetary poverty capture all aspects of poverty?

Daniel Mahler's picture
Also available in: Français | Español  | 中文

Poverty is a complex concept. A widespread view argues that important aspects of poverty cannot be measured in monetary terms – in fact, to successfully address poverty, we need to measure it in all its facets. The recent release of the 2018 edition of the Poverty and Shared Prosperity Report contains the World Bank’s first attempt at measuring multidimensional poverty at a global level. Global measures of multidimensional poverty have a rich history, a prominent example being the annual Global MPI produced by the United Nations Development Programme with the Oxford Poverty & Human Development Initiative.

The green growth crossroads: changing course to fight climate change in Lao PDR

Stephen Danyo's picture

Small, landlocked, and resource-rich Lao PDR has been quietly maintaining its place as one of East Asia and Pacific’s fastest growing economies for nearly 20 years. Since 2000, the average economic growth rate of the country has been nearly 8 percent. This growth has propelled Lao PDR through many positive milestones, including meeting the criteria of Least Developed Country graduation for the first time this year. Meanwhile, poverty declined from 34 percent in 2003, to 23 percent according to most recent data, and incomes for many have risen.

Six corridors of integration: Connectivity along the overland corridors of the Belt and Road Initiative

Charles Kunaka's picture
The six land corridors that are the “Belt” part of the Belt and Road Initiative (BRI) connect more than sixty countries, a number that keeps growing as more and more countries join. However, even as the initiative progresses, there are still open questions as to what each participating country will gain from the initiative.
 

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

Verónica Raffo's picture
Also available in: Español


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 because the level of the Picassa lagoon keeps rising due to extreme rainfall and lack of coordination among provinces on how to deal with excess water flows. 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.

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.


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