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The Global Infrastructure Facility: fulfilling its mission

Akihiro Tsuchiya's picture

Editor's Note: Join us April 22nd at 10AM ET for the 2017 Global Infrastructure Forum when the Multilateral Development Banks (MDBs), the United Nations, the G-20, and development partners from around the world meet to discuss opportunities to harness public and private resources to improve infrastructure worldwide, and to ensure that investments are environmentally, social and economically sustainable. Check out the event site to view the livestream on April 22.




Nearly two years ago, the Global Infrastructure Facility, or the GIF, began its mission to develop bankable, sustainable infrastructure projects in developing countries that are attractive to investors. Being a partnership of multilateral development banks, private sector partners, donors and beneficiary countries, we have the knowledge and resources to make that happen.
 
It has been my honor, as the representative from Japan, to serve in the last year as co-chair of the GIF’s Governing Council together with the World Bank. As my term draws to a close, I would like to reflect on our accomplishments and share some observations with those who believe that developing infrastructure is a key element of reducing global poverty.


I. The GIF’s mission is in synch with the G7’s Ise-Shima infrastructure development policy  

We believe that the gap between infrastructure support and demand can be closed by promoting quality infrastructure investment. The Ise-Shima policy encourages stakeholders, including governments, multilateral development banks, and private sector investors to apply key principles to infrastructure investment. In brief, these principles are:

  • Ensuring effective governance, reliable operations and economic efficiency
  • Ensuring job creation, capacity building and transfer of expertise and know-how for local communities
  • Addressing social and environmental impacts 
  • Ensuring alignment with economic and development strategies, including climate change      
  • Enhancing effective resource mobilization, including through public-private partnerships 
One reason that serving on the Governing Council of the GIF has been so rewarding is that its mission has similarities to the Ise-Shima principles. These, I believe, contribute to the success of the GIF’s mission.

II. The GIF has developed a robust project pipeline  

The GIF is dedicated to the design, preparation and structuring of viable and sustainable infrastructure projects with the support of its advisors and partners. This is a long and difficult process. This is because we must ensure that proposed projects have the depth and detail required by serious investors. The research, analysis, and coordination required is often out of reach of beneficiary governments.
 
The GIF has now approved 20 projects that could potentially lead to $13 billion in financing which otherwise could not be realized. Why is this important? Because developing a strong project pipeline is the key factor in closing the infrastructure investment gap. According to the Business 20, a forum which advises leaders from the Group of 20, approximately $60 to $70 trillion additional infrastructure capacity will be needed by 2030. We anticipate a shortfall of up to $20 billion, much or all of which could be financed by the private sector.  Hence the need for the GIF to support the early stages of project preparation, which are perceived as expensive, complicated and risky.

III. Our partnership is expanding and becoming more diverse  

As the GIF’s operations progressed, the Governing Council understood that it needed to include the voice of beneficiaries from developing countries. So for the first time, we admitted three beneficiary partners who will serve for one year on a rotational basis. The first of these are from Brazil, Turkey and Uganda, representing three different regions of the world at different stages of development. Their input has already proven invaluable as the GIF continues to expand and evolve. This year, we anticipate the rotation to bring beneficiary partners from India, Jordan and the Philippines.
 
We also welcomed three prospective technical partners from among multilateral development banks: the Asian Infrastructure Investment Bank (AIIB), the Islamic Development Bank (IsDB), and the New Development Bank (NDB).  Their voices bring new perspectives that will add value to the GIF’s work.
 
The work of the Governing Council is complemented by a growing group of private sector partners that bring the perspective of the private sector and ensure that the GIF’s activities make sense from an investor’s viewpoint Together, the GIF partnership brings a unique collaborative approach to tackling the infrastructure constraints of emerging economies, leveraging the power of the private sector.
 
The GIF adheres to global best practices in infrastructure development, draws from a rich, diverse and knowledgeable base, and has successfully expanded the number of bankable infrastructure projects. Japan is proud to have been a part of this collaborative effort to address one of the world’s greatest challenges, and looks forward to continuing its support of the GIF.
 
If you are interested in learning more about the GIF, please visit our website at www.globalinfrafacility.org.


We look forward to hearing from you: Flagging a new World Bank Group consultation on the Guidelines for the Development of a Policy for Managing Unsolicited Proposals in Infrastructure Projects. Submit your feedback here - Now open through May 7, 2017.

Comments

Submitted by Ma. Theresa Lorenz on

Our experience as proponents for PPP environmental infrastructure projects, particularly for local government units, is that funding through multi-lateral agencies is the currency which is mostly lent out in US dollars, a reason why it is shied away from, as revenue streams for tendered projects are in local currency. While, agencies such as World Bank, JBIC, KFW, for example, lend these to the national government at much lower rates than when these are relent by national government banks in the Philippines, for example - Development Bank of the Philippines and Land Bank of the Philippines lend out at commercial rates, which makes it sometimes not affordable for environmental infrastructure like when users for water supply and sewerage collection and treatment in non-metropolitan municipalities in the Philippines. This especially when users are not willing to pay tariff rates to make the project financeable or when the municipality does not have the financial capacity to repay the capital investment. This particularly makes it difficult to deliver sustained safe water supply and to mitigate pollution of water resources. Thank you and we appreciate your attention to this matter.

Submitted by Mohammed Anisur Rahman on

we wants change the world so all activity must be depend on proverty reduced

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