Rarely does one read about a private utility’s successful program to provide electricity to the urban poor. Rarer still is when the program is a profit-making venture and can serve as a learning experience for other countries around the world. But an Indian private utility, Tata Power Delhi Distribution Limited, in New Delhi, has been successful in providing electricity to 217 slums—with 175,000 customers—by engaging with the community. It has reduced non-technical losses and improved its revenues from $0.3 million to $17.5 million over the last five years.
As part of an initiative by the World Bank’s Energy Sector Management Assistance Program (ESMAP) on expanding electricity access to the urban poor, there have been many knowledge exchanges between Brazil, Colombia, Kenya and Jamaica to learn from each other’s experiences and implement best practices. Recently, ESMAP’s team along with delegations from Jamaica and Kenya, visited Tata’s project in India to understand the reason behind their success.
As population and economic growth bump up against finite—and increasingly degraded—water resources, competition between agricultural, industrial, and municipal water uses increases, putting stress on existing water sources. This stress is felt most acutely in urban areas, particularly among the urban poor.
Moreover, urban water management systems are inefficient, leading to an uneven quantity and availability of water and related services. In addition, urban water management must consider the effects of climate change, including rising temperatures, changes in precipitation patterns, and climate variability, on water resource availability.
Addressing these challenges requires building resilience not only in cities’ physical infrastructures but also in their social architecture, governance structures, financial systems, and ecosystems. A resilient city can adapt to changing conditions and withstand shocks while still providing essential services.
A boat trip from Port Elizabeth to Kingstown, in the Caribbean country of Saint Vincent and the Grenadines, is a one-hour trip that locals take several times a day. It was during one of these journeys that the boat of Kamara Jerome, a young Vincentian fisherman, ran out of gas six miles from Bequia City in what is termed locally as the "Bequia Channel." While waiting for help with strong wind gusts and the sun on his head, the idea of developing a boat that would run with wind and solar energy was born. Soon after, the idea became a prototype; a boat using green technology was on the water making 20-year-old Jerome a winner of international innovation competitions and a role model to other Caribbean youth.
In Mexico, young engineer Daniel Gomez runs a multimillion bio-diesel company originally conceived as a research project for his high school chemistry class. Gomez and his partners - Guillermo Colunga, Antonio Lopez, and Mauricio Pareja - founded SOLBEN (Solutions in bio-energy in Spanish) in their early twenties.
Although Daniel and Kamara have different educational backgrounds, they do share one important skill, the ability to identify a problem, develop an innovative solution, and take it to the market. In other words, being an entrepreneur, an alternative to be economically active, that seems to work and not only for a few.
When the Olympic Games comes to Rio in 2016, new medal-worthy sports will include kitesurfing, golf, and rugby sevens. If the Olympic Committee ever considers including our “sport” – the practice of public-private partnerships (PPPs) – the top medal would surely go to the home-grown Galeão International Airport PPP, which set the 2014 record as the largest PPP deal that closed globally. For this gateway to Rio – which is in the midst of preparing to accommodate more than 10,000 athletes and tens of thousands more visitors for the 2016 Olympics – even the concessions merit global rankings.
Standing by for liftoff
The concession of Galeao International Airport (official name: Rio de Janeiro/Galeão–Antonio Carlos Jobim International Airport) got off the ground in the second round of airport concessions. The first round dates back to early 2012, when the government issued tenders for three major airports: Guarulhos (São Paulo), Viracopos (Campinas) and Brasília.
In mid-2012, following the successful outcome of these three projects, the Brazilian National Development Bank (BNDES) approached IFC to assist with a second round of airport concessions, including Confins airport (Belo Horizonte) and Galeão (Rio de Janeiro). IFC teamed up with the Estruturadora Brasileira de Projetos (EBP), a project preparation company owned by some of the biggest Brazilian commercial banks and BNDES. Together, IFC and EBP were responsible for the financial, technical/economic/engineering, and environmental studies.
Since childhood, Gircilene Gilca de Castro dreamed of owning her own business, but struggled to get it off the ground. Her fledgling food service company in Brazil had only two employees and one client when she realized she needed deeper knowledge about what it takes to grow a business. To take her business to that next level, she found the right education and mentoring opportunities and accessed new business and management tools.
On Monday, China officially launched the Asian Infrastructure Investment Bank (AIIB) in a ceremony with representatives from the bank's 57 founding-member countries. AIIB will have a capital base of US$100 billion, three-quarters of which come from within Asia.
At the inaugural ceremony in the Great Hall of the People, Chinese President Xi Jinping reaffirmed the new institution's mission, saying that "Our motivation [for setting up the bank] was mainly to meet the need for infrastructure development in Asia and also satisfy the wishes of all countries to deepen their co-operation."
Indeed, the AIIB is a major piece of China's regional infrastructure plan, which aims to address the huge needs for expanding rail, road and maritime transport links between China, central Asia, the Middle East and Europe. But the AIIB should also represent a huge opportunity for cooperation not only between countries in the region but also with other multilateral development banks.
Our experience working on transport mega-projects co-financed by several multilateral development banks (MDBs) already shows that this collaboration is much needed and critical for the success and viability of mega-projects. The most recent experience with the Quito Metro Line One Project, for example, shows that the co-financing banks – World Bank, Inter-American Development Bank, Andean Development Corporation and European Investment Bank – brought not only their financial muscle but also their rich and diverse global knowledge and experience. Incidentally, because of the Quito Metro project, all the MDBs involved in the project were dubbed as the “musketeers, ” precisely due to the high degree of collaboration and team work that is making this project a success.
Note: This blog entry was adapted from an original submission for the PPIAF Short Story Contest. It is part of a series highlighting the role of Public-Private Partnerships (PPPs) in projects and other transformative work around the world.
For the most part, protected areas in Brazil are managed by the public sector. As a result, like other countries, these areas face conservation difficulties, including a lack of resources for maintenance and other initiatives.
Because of this lack of public-sector financial and human resources, the private sector has provided a significant portion of funding for managing protected areas. One of these cases is in Brazil’s Minas Gerais State. The Secretary of State for Environment and Sustainable Development (SEMAD), Forest State Institute (IEF) and Public-Private Partnership Central Unit collaborated to develop a PPP model focused on management, conservation and operation of three protected areas, located in the State’s Karst region: PPP Peter Lund Cave Route.
The PPP Peter Lund Cave Route aims to structure a single, singular national and international tourist track, aligning the unique natural and cultural elements of the karst region. This new management model is demonstrating results for conservation and sustainable development, including the mobilization of public policies that value one of Brazil’s greatest characteristics: biodiversity.
In March we released the update from the Private Participation in Infrastructure (PPI) Database for the first six months of 2014, covering investment activity in energy, transport, and water and sanitation. The good news of a rebound of investment commitment from a decline in 2013 was noteworthy, alongside the heavy concentration of activity in Brazil.
The PPI Database’s 2014 full year update for these sectors has just been released, and it confirms the trends we began tracking for the first six months. Total investment in infrastructure commitments for projects with private participation in the energy, transport, and water and sanitation sectors increased six percent to $107.5 billion in 2014 from levels in the previous year. The total for 2014 is 91 percent of the five-year average for the period 2009-13, which is the fourth-highest level of investment commitment recorded – exceeded only by levels seen from 2010 through 2012.
This increase over 2013 was driven largely by activity in Brazil. Without Brazil, total investment commitments would have fallen by 18 percent, from $77.2 billion in 2013 to $63.4 billion in 2014. Although this is lower than H1 2014 (57%), Brazil’s large stake is a continuation of a recent trend.
The Latin America and the Caribbean (LAC) region saw $69 billion of investment commitments, or nearly 70 percent of the total for 2014. Three of the top five countries by investment commitments in 2014 were from LAC. The top five, in order, were Brazil, Turkey, Peru, Colombia, and India.