Photo: Michiel van Nimwegen | Flickr Creative Commons
Just ahead of this year’s anniversary of the Indian Ocean tsunami of 2004, I visited the Tsunami Honganji Vihara site in Sri Lanka where upwards of 2,000 people died when their train was destroyed by the force of the waves. Shortly after my visit, Sri Lanka was faced with an unusually large tropical cyclone that pummeled the capital of Colombo, and caused extensive flooding, power failures and infrastructure damage. And, a few thousand miles away, Bali’s highest volcano, Mount Agung, was threatening to erupt, causing considerable anxiety in Colombo that it could trigger another tsunami event of the same magnitude of the 2004 disaster.
Upon my return to the United States I learned of the raging wildfires in California causing massive damages.
This year’s seemingly never-ending adverse weather events, exacerbated by climate change, along with adverse natural events such as earthquakes, are negatively impacting critical infrastructure globally. Some might describe 2017 as a global “annus horribilis” for adverse “force majeure” events.
Photo: Debbie Hildreth Pisarcik | Flickr Creative Commons
Several years ago, after almost two decades at various investment banks, I joined the World Bank’s Financial Solutions team. I had always thought of the World Bank as the leading concessional lender to governments, the financial muscle behind large infrastructure projects, and the coveted supranational client of investment banks. I have since discovered the power of World Bank guarantees and how they can help borrowers maximize their World Bank country envelopes. Since joining, I have helped various clients raise over $2 billion in commercial finance. And all this with a fraction of World Bank exposure.
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.
Photo: Jakob Montrasio | Flickr Creative Commons
Getting to commercial close on a Public-Private Partnership (PPP) transaction is a major milestone. But the deal is far from done. Getting from commercial close to financial close involves satisfying a long list of PPP contract Conditions Precedent, the terms, and conditions of lenders, among other requirements. The process is tricky and involves a lot of heavy lifting, particularly in emerging markets where the market for PPPs and supporting institutional structures may not yet be robust. None of this is news.
Yet CPCS has experienced this firsthand as transaction advisors advising governments on PPP deals in developing economies.
Tomorrow, on December 12, 2017, exactly two years after the signing of the historic Paris Agreement, the government of France will be hosting the One Planet Summit in Paris to reaffirm the world’s commitment to the fight against climate change. [[avp asset="/content/dam/videos/ecrgp/2018/jun-19/video_blog_with_ede-sameh_on_climate_summit_-_final_hd.flv"]]/content/dam/videos/ecrgp/2018/jun-19/video_blog_with_ede-sameh_on_climate_summit_-_final_hd.flv[[/avp]]
At the summit, mayors from cities around the world, big and small, will take center stage with heads of state, private sector CEOs, philanthropists, and civil society leaders to discuss how to mobilize the financing needed to accelerate climate action and meet the Paris Agreement goals.
Photo: kupicoo/ iStock
A key challenge when developing a policy to manage unsolicited proposals (USPs) in infrastructure projects is to strike a balance between receiving submissions and creating competitive tension. In a previous blog, we warned that USPs should be used with caution as an exception to the public procurement method, and argued that a good policy to manage USPs can help ensure transparency and predictability, and protect the public interest.
Surely a government that decides to consider USPs and develops a policy to manage them will look forward to receiving compliant proposals. At the same time, the government should ensure the project represents a fair market price and delivers value for money. Yet what is the incentive for the private sector to submit an unsolicited bid if the government takes it and competitively procures it? How can a government make USPs appealing to the private sector while attracting enough competing bidders?
It’s not always easy to convince the private sector to participate in public infrastructure projects—especially in developing countries and emerging economies. Why is this a problem? Because there simply is not enough public money to meet the growing demand for infrastructure, which is a key element of development and poverty alleviation. The need is great, numbering in the trillions of dollars.
But there is good news—the market has both the trillions and the expertise to use it, if the conditions are right. And the World Bank Group has a number of instruments that can help create an environment that meets the needs of the private sector in financially, environmentally, and socially sustainable ways. Guarantees are one of those instruments, a tool that is highly effective in leveraging limited resources for mobilizing commercial financing for critical infrastructure projects.
Image: chombosan / Shutterstock
According to NASA, 16 of the 17 warmest years on record have occurred since 2001. So—with climate change high on the global agenda—almost every nation signed the 2015 Paris Agreement, the primary goal of which is to limit the rise in global temperatures to below 2°C above pre-industrial levels. However, with the acute effects of global warming already being felt, further resilience against climate change is needed.
To meet both mitigation and adaptation objectives, “green infrastructure” can help.
Photo: Diana Susselman | Flickr Creative Commons
I worked with the International Finance Corporation (IFC) for exactly 20 years, all of which was in advisory work. I spent five years in Barbados, five in Washington, five in Zimbabwe and five in South Africa: perfect symmetry. On my 20th anniversary, I took a package and returned home, to the beautiful Caribbean. IFC was a great place to work, where we were challenged every day to come up with innovative solutions to seemingly intractable problems. Some of our deals were truly groundbreaking and lived up to IFC’s motto to improve people’s lives. That’s the kind of job satisfaction that money can’t buy.
After 76 countries, millions of air miles, and some pretty forgettable airport hotels, sometimes I look back and think: what was it all about?
But, what happens when the palm tree is cut or when the street vendor changes the location?
The absence of street names poses not only challenges for orientation, but also for property tax collection, postal services, emergency services, and the private sector. Especially, new economy companies, such as Amazon or Uber, depend on street addressing systems and are eager to cater to market demands of a growing middle class.
To address these challenges, the Accra Metropolitan Assembly (AMA), financed by the World Bank’s second Land Administration Project , is implementing a street addressing and property numbering system in Accra. Other Metropolitan areas received funding from other World Bank-funded projects for similar purposes.