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Budget-strapped cities are creating financing—out of thin air

Luis Triveno's picture

Photo: Jonathan O'Reilly / Shutterstock

The world is urbanizing fast200,000 people are moving to cities every day in search of homes, jobs, as well as education and healthcare services for their families. Supporting this influx with proper infrastructure and services for water, sanitation, transport, and green spaces will require an estimated $1 trillion each year.
 
Given the difficulties of further increasing the tax burden or the level of public debt, it’s time for cities to think more creatively about alternative sources of funding.

Not willing to wait for their national governments to bless them with scarce infrastructure funds, innovative mayors have figured out how to squeeze a new source of urgently needed capital out of thin air, literally.

How Islamic finance is helping fuel Malaysia’s green growth

Victoria Kwakwa's picture
Photo: bigstock/ f9photos

Income growth is not the sole aim of economic development. An equally important, albeit harder to quantify objective is a sense of progress for the entire community, and a confidence that prosperity is sustainable and shared equitably across society for the long term.  

Getting infrastructure right: the OECD framework for better governance

Ian Hawkesworth's picture

Infrastructure is expensive, important and difficult to get right. For both the members of the Organisation for Economic Co-operation and Development (OECD) as well as other countries, infrastructure exposes shortcomings in country systems that may undermine our ability to identify, develop and procure good projects that are sustainable, affordable and legitimate. But there is no alternative—businesses rely on modern infrastructure to remain competitive, and society depends on good infrastructure to ensure equal opportunity and access to services for citizens.
 
With sufficient access to finance, poor governance of infrastructure is one of the most fundamental bottlenecks to achieving long-term development objectives.
 
In response to this challenge, investors, regulators, members of the public and private sectors, and decision makers from across levels of government, expertise, and regions, gathered at the 2nd  OECD Forum on the Governance of Infrastructure in Paris in March to discuss the impact of infrastructure governance on productivity, jobs and wellbeing.

Forecasting infrastructure investment needs for 50 countries, 7 sectors through 2040

Chris Heathcote's picture


The Global Infrastructure Outlook is a landmark country-based online tool and report developed by the Global Infrastructure Hub with Oxford Economics, which forecasts infrastructure investment needs across 50 countries and seven sectors to 2040.

Although there are already forecasts for infrastructure investment in the market, the public and private sectors indicated their need for fresh, country-level data. Outlook was created to meet that knowledge gap.
 
For the first time we have data about what each country needs to spend in each sector, and importantly – the gap between what needs to be spent and current spending trends.

What El Niño has taught us about infrastructure resilience

Irene Portabales González's picture
Also available in: Español
Photo: Ministerio de Defensa del Perú/Flickr
The rains in northern Peru have been 10 times stronger than usual this year, leading to floods, landslides and a declaration of a state of emergency in 10 regions in the country. Together with the human and economic toll, these downpours have inflicted tremendous damage to transport infrastructure with added and serious consequences on people’s lives.

These heavy rains are blamed on El Niño, a natural phenomenon characterized by an unusual warming of the sea surface temperature in the central and eastern equatorial Pacific Ocean. This phenomenon occurs every two to seven years, and lasts about 18 months at a time. El Niño significantly disrupts precipitation and wind patterns, giving rise to extreme weather events around the planet.

In Peru, this translates into rising temperatures along the north coast and intense rainfall, typically shortly before Christmas. That’s also when “huaicos” appear. “Huaico,” a word that comes from the Quechua language (wayq’u), refers to the enormous masses of mud and rocks carried by torrential rains from the Andes into rivers, causing them to overflow. These mudslides result from a combination of several natural factors including heavy rains, steep slopes, scarce vegetation, to name a few. But human factors also come into play and exacerbate their impact. That includes, in particular, the construction of human settlements in flood-prone basins or the absence of a comprehensive approach to disaster risk management.

This year’s floods are said to be comparable to those caused by El Niño in 1997-1998, one of the largest natural disasters in recent history, which claimed the lives of 374 people and caused US$1.2 billion worth of damages (data provided by the Peruvian National Institute of Civil Defense).

In India, this transport engineer is racing toward the future… with German supercars

Shigeyuki Sakaki's picture
Harsh, a civil engineer from Surendranagar, the western State of Gujarat in India, proudly has a collection of supercars recently delivered from Germany. They are all brand new with sleek designs, glossy paint, and fully loaded with state-of-the-art features. One of them is a 600 horse-power monster, another is the first of its kind in India.
 
Without further ado, let's see what he has...

Declining private investment in infrastructure – a trend or an outlier?

Clive Harris's picture



We’ve just released the 2016 update for the World Bank’s Private Participation in Infrastructure (PPI) Database and it makes for some gloomy reading. Investment commitments (investments) in infrastructure with private participation in Emerging Markets and Developing Economies (EMDEs) fell by a whopping 37% compared to 2015. 

Foreign exchange risk: How a liquidity facility could help

Joaquim Levy's picture

© Yang Aijun/World Bank

In a guest post for Infrastructure Investor, World Bank Group CFO Joaquim Levy says multilaterals’ provision of hard-currency liquidity facilities could do much to catalyze private investment into emerging market infrastructure.

The World Bank Group is playing a leading role in thinking through better approaches to infrastructure financing in emerging markets and developing economies (EMDEs). Part of this work entails understanding the key barriers that might impede private capital from participating more actively in EMDE projects. This is why we focus so much on developing local capital markets and other means to unlock the power of local institutional investors. It is also why we’ve been working to facilitate cross-border investment, in a time when returns in advanced economies remain low.

The 24 Schools PPP in Greece: a lesson in perseverance and innovative funding

Nikos Mantzoufas's picture


An artist’s interpretation of the Attika Schools PPP Project in Greece, which reached financial close in Q2 2014
(Photo: World Fianance)

In 2014, the 24 Schools Public-Private Partnership (PPP) project in the wider Athens area marked the reopening of the Greek PPP market and was only the second PPP project to reach financial close in Greece. 

It aimed to address the existing quantity and quality need for schools, covering 6,500 students in 10 municipalities who came from diverse socio-economic backgrounds in the historical region of Attica, which encompasses the city of Athens. Benefits included the timely and enhanced delivery of schools to improve educational outcomes, better maintenance through the lifetime of the project, the highest service standards, the response to user needs, and significant savings in energy cost.

Evolving infrastructure models in the UK -- one step forward, two steps back?

Michael Walker's picture


Photo: Jonathan Meddings | Flickr Creative Commons

The United Kingdom has been a leading player in the development of Public-Private Partnerships (PPPs) since the inception of the Private Finance Initiative (PFI) in the early 1990s. PFI is a structure that introduced project finance into UK public services for the first time. Under PFI, a private sector consortium builds public assets and services them over a term of 25 to 30 years in exchange for an availability payment. Successive governments have taken full advantage of the policy’s ability to leverage private finance and thus generate additional infrastructure investment, beyond typically constrained capital budgets.

An often under-reported feature of the UK’s PPP policy is the variety of approaches it takes.


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