Also available in Español
Photo: Dominic Chavez / International Finance Corporation
In the early 1990s, Colombia’s road infrastructure was a maze of poorly maintained roads and bad highways. Difficult geography—the Pacific coast jungle and the Andes branching out into three chains—made it harder to improve road conditions and connect isolated communities. Conflict, corruption, and short-term political priorities contributed to the problems plaguing Colombia’s road system. But just as influential were the problems with the nation’s existing concession contracts that had wrong incentives, created opportunities for renegotiating signed contracts, and assigned unproportioned demand risk to the Government of Colombia.
Also available in Español
A major factor hindering infrastructure implementation and delivery is the absence of good governance, according to the 130 delegates from 27 countries who came together for the first Regional Roundtable on Infrastructure Governance in Cape Town in November.
There’s no denying infrastructure is crucial to Africa’s growth prospects. Nor can one ignore the ever-growing need for infrastructure on the continent—in Sub-Saharan Africa, only 35% of the population has access to electricity, and 23% still lack access to safe water and sanitation. Despite an estimated shortfall of nearly $100 billion in infrastructure investment in Africa, lack of financing is not the biggest problem.
The landmark Roundtable brought together representatives from African governments, the global private sector, multilateral and international organizations, civil society organizations and other development partners, for a discussion on the challenges and practical solutions to the governance impeding successful infrastructure delivery in Africa.
Photo: VahanN / Shutterstock.com
Downtown Yerevan. Gusty winds, frosty air. Inside a hotel in the town square, cocktails and canapés, speeches and signatures. On this evening in November 2016, representatives of the State Committee for Water Economy (the Armenian water authority) and Veolia (a large international water operator) gathered to celebrate the signing of a new partnership: a 15-year national lease to provide water and wastewater services for the whole country. The lease began in January 2017, thus marking the start of a “second generation” of water PPPs in Armenia. Solid gains had already been made under the “first generation” between 2000 and 2016. At this crucial juncture, a World Bank study reviewed Armenia’s experience so far and analyzed the way forward under the new national lease.
Photo: DFID | Flickr Creative Commons
Health is one of the United Nation’s Sustainable Development Goals (SDGs). However, it is not feasible for any country, rich or poor, to provide its entire population with all needed health services. Accordingly, the private sector has an important role to play in closing the healthcare gap, as it contributes financial resources, innovation, and expertise.
The managed equipment services (MES) arrangement, used in Kenya, is one way to do this. MES is a business model emerging in Kenya’s healthcare system involving partnerships between the private sector and public healthcare providers that offers solutions to some of the challenges posed by the dynamic healthcare industry.
Photo: User 377053 | Pixabay
The Argentinian presidency of the G20 opens this month and will be marked by a focus on infrastructure investment. The G20 and Organisation for Economic Co-operation and Development (OECD) have already announced a widescale data collection initiative to create benchmarks to monitor the risk-adjusted financial performance of private infrastructure debt and equity investments.
It’s about time.
Investors have hit a roadblock when investing in infrastructure. Until now, none of the metrics needed by investors were documented in a robust manner, if at all, for privately held infrastructure equity or debt. This has left investors frustrated and wary. In a 2016 survey of major asset owners by the EDHEC Infrastructure Institute (EDHECinfra) and the Global Infrastructure Hub, more than half declared they did not trust the valuations reported by infrastructure asset managers. How, under such conditions, can the vast increases in long-term investment in infrastructure by institutional players envisaged by the G20 take place?
2017 was a busy year in the world of infrastructure and public-private partnerships at the World Bank Group: from new knowledge products and tools, to innovations and success stories in places ranging from Peru and Ukraine, to Jordan, Pakistan, and Fiji. As we look at our top content that resonated most with you, our blog readers, we can categorize these posts into three broad categories:
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.
Welcome to the “10 Candid Career Questions” series, introducing you to the infrastructure and PPP professionals who do the deals, analyze the data, and strategize on the next big thing. Each of them followed a different path into infra and/or PPP practice, and this series offers an inside look at their backgrounds, motivations, and choices. Each blogger receives the same 15 questions and answers 10 or more that tell their career story candidly and without jargon. We believe you’ll be as surprised and inspired as we were. For examples of other entries on the IPG blog, click here.