In 2013, investment commitments to infrastructure projects with private participation declined by 24 percent from the previous year. It should be welcome news that the first half of 2014 (H1) data – just released from the World Bank Group’s Private Participation in Infrastructure (PPI) database, covering energy, water and sanitation and transport – shows a 23 percent increase compared to the first half of 2013, with total investments reaching US$51.2 billion.
A closer look shows, however, that this growth is largely due to commitments in Latin America and the Caribbean, and more specifically in Brazil. In fact, without Brazil, total private infrastructure investment falls to $21.9 billion – 32 percent lower than the first half of 2013. During H1, Brazil dominated the investment landscape, commanding $29.2 billion, or 57 percent of the global total.
Four out of six regions reported declining investment levels: East Asia and the Pacific, South Asia, Africa, and the Middle East. Fewer projects precipitated the decrease in many cases. Specifically, India has experienced rapidly falling investment, with only $3.6 billion in H1, compared to a peak of $23.8 billion in H1 of 2012. That amount was still enough to keep India in the top five countries for private infrastructure investment. In order of significance, those countries are: Brazil, Turkey, Mexico, India, and China.
Sector investments were paced by transport and energy, which together accounted for nearly all private infrastructure projects that were collected in this update. The energy sector captured high investment levels primarily due to renewable energy projects, which totaled 59 percent of overall energy investments, and it is poised to continue growth due to its increasing role in global energy generation.
The energy sector also had the biggest number of new projects (70), followed by transport (28), then water and sewerage (12). However, transport claimed the greatest overall investment, at $36 billion, or 71 percent of the global total.
While we need to see what the data for the second half of 2014 show, what we have to date suggests that infrastructure gaps may continue to grow as the private sector contributes less. It also suggests that, in many emerging-market economies, there is much work to be done to bring projects to the market that will attract private investment and represent a good deal for the governments concerned.
Latin America & Caribbean
March 22nd is World Water Day. We’ve already covered 7 things you may not know about water so here a 5 more facts showing the links between water and health, energy, the climate, agriculture and urbanization. But first:
This is every river and waterway in the contiguous United States
Image via Wired
Nelson Minar produced this incredible map using data from the USGS National Hydrography Dataset. It includes some waterways that are dry most of the year but still have defined creek beds, and like veins running through the human body it shows how fundamental water is to the country’s ecosystem.
Thanks to a recent knowledge exchange program, yes!
As we can all imagine, Africa’s lush greenery and planted forests offer huge potential but the sector’s expansion faces major barriers like access to land, lack of access to affordable long-term finance and weak prioritization of the sector.
Take Ethiopia, for example. About 66.5 million cubic meters of the country (46% of total wood-fuel demand) is subject to non-sustainable extraction from natural forest, wood- and scrublands, resulting in deforestation and land degradation. In Mozambique, charcoal is still produced from native forests, leading to immense pressure on natural resources, and way beyond its regeneration capacity. Both countries want to know how the forest sector can contribute to their national development plans and help grow their economies and reduce rural poverty, while being environmentally sustainable.
This topic is of even more importance as we celebrate the International Day of Forests on March 21, and helps us raise awareness on the need to preserve forests and use this natural wealth in a responsible and sustainable manner.
Denmark has committed to renewable energy further and faster than any country in Europe. The Scandinavian nation generates a third of its annual electricity demand from wind, and solar capacity is growing as well. For countries that want to green their energy mix, there is no better place to get a glimpse of the future than Denmark.
Its pioneering spirit has brought great benefits, and international acclaim, but like all first movers, Denmark is also learning as it goes.
To tap into this learning, ESMAP—the World Bank’s Energy Sector Management Assistance Program—organized a study tour to Energinet.dk, Denmark’s transmission system operator, as part of its work to help client countries integrate variable renewable energy into their electricity grids. Joining the study tour were 26 participants—representatives from regulators, system operators and utilities from 13 countries, including South Africa, Chile, China, Pakistan, Zambia, and Morocco.
The Latin America and the Caribbean region is crying out for infrastructure improvements. An investment estimated at 5 percent of the region’s GDP — or US$250 billion per year — is required to develop projects that are fundamental for economic development. This includes not only improving highways, ports and bridges, but also building hospitals and creating better transport, public transit and other mobility solutions for smarter cities. Rising demand for infrastructure also is prompting countries to redouble efforts to attract greater private investment
At the Multilateral Investment Fund (MIF), as at the World Bank Group, we believe that public-private partnerships (PPPs) can help governments fill this infrastructure gap. However, the projects must be implemented effectively and efficiently to achieve social and economic objectives.
Governments in the Latin America and the Caribbean region not only lack financing to address the infrastructure gap, but also face challenges in selecting the appropriate large infrastructure projects, planning the projects, managing and maintaining infrastructure assets — and gaining public support for private investment in public infrastructure.
However, PPPs are gaining ground in Latin America and the Caribbean. Beyond the larger economies of Brazil, Colombia and Mexico, assistance from the MIF and the Inter-American Development Bank (IDB) has enabled countries such as Paraguay to develop laws that pave the way for PPP projects. Just this week, Paraguay announced its first such project, which involves an investment of US$350 million to improve and build more than 150 kilometers of roads.
PPPs have been moving beyond classic interventions in public infrastructure, which have typically included roads, railways, power generation, and water- and waste-treatment facilities. The next wave of PPPs increasingly involves and provides social infrastructure: schools, hospitals and health services. In Brazil, IFC, the private sector arm of the World Bank Group, helped create the Hospital do Subúrbio, the country’s first PPP in health, which has dramatically improved emergency hospital services for one million people in the capital of the state of Bahia.
“What would it take to reduce disaster risk in your country by 50 percent by 2030?” This question was posed to a gathering of small island developing states leaders and representatives during the Understanding Risk forum in London in 2014.
At the time, it probably seemed like an overwhelming question. Around US$650 million in international financing is currently available annually to build resilience in small states. However, for many countries, reducing their disaster risk by 50 percent is an attainable goal.
There was cause for celebration at the State of Rio de Janeiro’s Office of Women’s Affairs last week. The office had just launched a new program that provides support and legal assistance to survivors of gender-based violence, which was covered by a wide range of media and commemorated by a visit from senior World Bank leadership to Brazil.
Our team is currently visiting Rio to help with activities for this new program, called “Via Lilas.” Rio’s government has a lot to cheer about; the program is both innovative and significant. Its primary component is a system of electronic kiosks, placed at stations along Supervia suburban rail lines, which contain helpful information about how women can seek support for gender-based violence.
The placement of these kiosks is strategic; the Supervia provides some of the poorest communities in the region access to jobs and services.
The rail service connects downtown Rio de Janeiro to the periphery in this sprawling metropolitan area of more than 4,500 square kilometers and 12 million people. Outlying parts of the metropolitan area, such as the community of Japeri, can be more than two hours by train to Rio’s Central station.
The “Via Lilas” kiosks will be placed at high-profile locations along the Supervia system, providing easy information access to the approximately 700,000 passengers who use the rail network each day.
This Sunday, International Women’s Day celebrates the achievements of women, while calling for greater gender equality. Ahead of several high-profile campaigns and initiatives launching this week and next, I thought I’d highlight some gender data and trends that you might not know about.
Note: as these data are from different sources, some of the members of regional groupings may differ between charts, please refer to the original sources for details.
1) 91% of the world’s girls completed primary school
In 2012, more girls completed primary school than ever before. Since 2000, there’s been progress across the world but large disparities remain between regions and countries. Only 66% of girls in Sub Saharan Africa completed primary school in 2012, and in three countries this figure was under 35%. Educating girls is one of the best investments we can make and by 2015, developing countries as a whole are likely to reach gender parity (about the same numbers of boys and girls) in terms of primary and secondary enrollment.
I recall a visit to a Bank-funded project in a rural Bolivian community. An enthusiastic Quechua woman was proudly telling me that she was about to undertake the 3-hour journey to Sucre with her “wawa” (baby) to get the three price quotes she needed to purchase wire for the community fences. She was participating in one of over 600 investments designed to help vulnerable rural communities in Bolivia lift themselves out of poverty, within the scope of the Community Investment in Rural Areas Project (PICAR) executed by the Ministry of Rural Development of Lands.
“You just have one wawa, right?,” I asked. She replied: “Well, this is the youngest of six children; the others will stay home. My ten-year-old daughter will look after the younger ones. Right now my husband is working in the Chapare, harvesting coca leaves. He only comes home occasionally.”
After talking with her I had mixed feelings. One the one hand, I was worried that our gender-targeted project was asking too much of her and might be harming her kids in some way. On the other hand, I realized that it was giving her a unique chance to engage in tasks historically performed by the men.