There are 56 IDA countries (excluding three “inactive” and a few rich enough to count as “IDA blend”) defined as having per capita income under $1,215. This 2.7 billion in IDA countries compares to total private infrastructure investment commitments of $111.6 billion in all emerging markets in 2015 per the recently released Private Participation in Infrastructure database.
In recent years, the number of projects and investment amounts of private infrastructure in IDA countries hasn’t increased. … well, then we need a step change.
We know to make a difference requires dedication and a long term vision. One part of that ambitious change is the Global Infrastructure Facility (GIF). The GIF is a global open platform to help partners prepare and structure complex infrastructure public-private partnerships (PPPs) in emerging markets, and to bring in private sector and institutional investor capital. The GIF platform integrates the efforts of multilateral development banks (who as Technical Partners choose which projects to submit for GIF funding), private sector investors and financiers, and governments to bring infrastructure projects and programs to market. No single institution can achieve these goals alone. The GIF’s Advisory Partners, which include insurers, fund managers, and commercial lenders, and which together have $13 trillion in assets under management, provide feedback to governments on the bankability of projects.
In June, the GIF’s Advisory Council meeting was hosted in Changsha by the China PPP Center. PPP programs and projects were presented by China, India, Kazakhstan and Uganda. And a panel of experts shared their views on how countries can mitigate the risks inherent in infrastructure PPPs, such as demand risk, foreign exchange risk, refinancing risk and off-taker risk. Participants also visited the Maglev train, Changsha’s flagship PPP project.
Since being set up a year ago the GIF has supported transport and energy projects in Brazil, Egypt, Georgia, Cote d’Ivoire and the Solomon Islands.
The GIF is one part of an ambitious effort by the development community to ramp up support for infrastructure project preparation and to help private sector investors reach countries they wouldn’t otherwise invest in. The African Development Bank’s Africa 50 Infrastructure Fund, the Asian Development Bank’s Asia Pacific Project Preparation Facility, the Inter-American Development Bank’s InfraFund Project Preparation Facility, the EBRD’s Infrastructure Project Preparation Facility, and the wide range of facilities managed by EIB—including JASPERS (Joint Assistance to Support Projects in European Regions) co-sponsored with the European Commission (EC) and EBRD, EPEC (European PPP Expertise Centre), and the Southern Neighbours Advisory Programme for Transport (SNAP-T) are critical to increase the supply of bankable projects and support broader policy reform for the regions on which they are focused.
Further blogs will comment on other aspects of how the development community is helping countries – especially the poorest – to ramp up access to infrastructure services.