Flanked by the finance and development ministers of France and Germany, World Bank Group President Robert B. Zoellick launched two initiatives today that together are expected to mobilize more than $55 billion in financing for infrastructure projects over the next three years.
The multibillion dollar initiatives—the Infrastructure Recovery and Assets (INFRA) platform and Infrastructure Crisis Facility—were created to address the falloff in funding for the construction of roads, water systems, power generation and distribution, and other critical infrastructure.
There is no doubt infrastructure plays a huge role in economic growth and development, Zoellick said.
“In this crisis, we will need more and more to identify creative ways to mobilize additional financing. This facility sends an important market signal,” encouraging the private sector to continue infrastructure investment and development.
France and Germany became the first to sign on to the Infrastructure Crisis Facility with commitments of about $660 million through German development bank KfW and roughly $1.3 billion through French development bank Proparco.
INFRA is designed to help countries offset the negative effects of the financial crisis on their infrastructure services and investment programs, with up to $45 billion available over the next three years. Assistance will be global, but Africa is expected to see a large share of the funding.
The Infrastructure Crisis Facility, administered by IFC, a private sector branch of the Bank Group, is expected to attract more than $10 billion to help bridge the infrastructure financing gap.
At today’s signing, German Development Minister Heidemarie Wieczorek-Zeul appealed to industrialized countries to support the initiative and take into account the situation in developing countries. “They’re not responsible for the crisis. We have a special responsibility to be at their side.”
French Finance Minister Christine Lagarde added: This is a time “when we can put our money where our mouth is and commit to deliver…I think the World Bank has done an outstanding job dealing with issues that are difficult. This is a good illustration of how projects should be conducted. They should be focused where they can actually make a difference.”
On a related note, I caught up earlier today with the Bank’s director for energy, transport and water, Jamal Saghir, who said the Bank’s Board has approved $9 billion in infrastructure projects already this fiscal year. That puts the Bank 47 percent ahead of the amount of infrastructure funding approved this time last year.
Saghir gave a shout-out to staff, who he credited with working hard to speed up project implementation to respond to the crisis.
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