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Global Infrastructure Facility

Helping Brazil realize its infrastructure promise

Paul Procee's picture


Photo: LWYang | Flickr Creative Commons

Since the 1980s, investment in Brazil’s infrastructure has declined from 5% to a little above 2% of the country’s Gross Domestic Product (GDP), scarcely enough to cover depreciation and far below that of most middle-income countries (see figure below). The result is a substantial infrastructure gap. Over the same period, Brazil has struggled with stagnant productivity growth. The poor status of infrastructure is broadly believed to be a key reason for Brazil’s growth malaise.

The Global Infrastructure Facility: What is it really and what have we been doing?

Towfiqua Hoque's picture

Photo: Ashim D'silva | Unsplash 

From “Billions to Trillions”, to the Hamburg Principles and Ambitions, to Maximizing Finance for Development (MFD), mobilizing private capital to deliver on the sustainable development agenda is in the spotlight. Realizing that constrained public and multilateral development bank (MDB) funding cannot fully address the critical challenges that developing nations face, the World Bank Group is pursuing private sector solutions whenever they can help achieve development goals, in order to reserve scarce public finance for when it’s needed most. This is especially true in the delivery of infrastructure.
 

As iron sharpens iron

Jeff Delmon's picture


Photo: totojang1977 / Shutterstock.com

In my last blog, I compared Public-Private Partnerships (PPPs) with marriage. I had explained that, though very different, the public and private can come together as they each possess characteristics beneficial to the other. Great in theory, but often difficult in practice.

Critics of PPPs abound and listing them here would be impractical. But whether they are auditors, civil society or within the World Bank Group, critics help us improve. We try to respond to our critics, including through blogs such as this one.

Three ways to manage construction risk to support infrastructure investment

Eric Dean Cook's picture


Photo: Pixabay

At the Global Infrastructure Facility (GIF) Advisory Council Meeting in March, we talked about construction risk and the way it shapes the delivery environment early in a project’s investment life. As a practicing engineer accustomed to attacking construction risk at the granular level, I enjoyed the broader discussion, particularly from the banking and credit perspective (meeting outcomes).

Unfortunately, construction risk realization will continue to be the norm. Perhaps we need to consider taking the longer view to reach potential investors by aligning the risk environment with risk tolerance.

Here are three ways to do this:

PPP contract clauses unveiled: the World Bank’s 2017 Guidance on PPP Contractual Provisions

Christina Paul's picture



What are the key considerations for a public authority when drafting a Force Majeure provision in a Public-Private Partnership (PPP) contract? What are the differences between emerging and developed PPP markets in treating Change in Law clauses? And are there particular legal matters that need to be contemplated in a civil law jurisdiction rather than in a common law country when dealing with termination payments under a PPP agreement?

These are only some of the questions the World Bank Group’s recently-published Guidance on PPP Contractual Provisions, 2017 edition aims to address for the benefit of public authorities (contracting authorities) involved in PPPs. This blog is the first in a series of posts that will discuss and explore the issues covered in the 2017 Guidance

Why addressing FX risk could hold the key to infrastructure investment

Julie Monaco's picture


Photo: Japanexperterna | Flickr Creative Commons

The world is crying out for new infrastructure. In emerging market countries, growing populations and rapid urbanization mean that cities are struggling to keep pace with the needs of citizens. Meanwhile, infrastructure is outdated in many developed countries.

Yet there is a $1 trillion annual shortfall in infrastructure investment, mostly in emerging markets. At the same time, there are billions of dollars in debt capital seeking secure and healthy returns.

Given the long-term, stable cash flows of many infrastructure projects, it seems the perfect destination for such capital. But in large part, this investment is not taking place. What is stopping investors’ capital connecting with infrastructure projects around the world? What will it take to increase the supply ‎of well-structured projects?

Ukraine: How international partnerships are contributing to the development of transportation infrastructure

Yuriy Husyev's picture
Also available in: Українська


Photo: Roberto Maldeno | Flickr Creative Commons

Infrastructure in Ukraine, Europe’s largest country, is extremely underdeveloped. Without significant investment, it cannot support the existing or future needs of our economy or population. The reasons are many: decades of mismanagement under Soviet rule, economic crisis, and more recently, the conflict in the Donbass. Given that these constraints go beyond a simple lack of funding, our government is partnering with the Global Infrastructure Facility (GIF), as well as other international partners such as the European Bank for Reconstruction and Development (EBRD) and the World Bank.

Traffic Risk in PPPs, Part II: Bias in traffic forecasts—dealing with the darker side of PPPs

Matt Bull's picture


Photo: Susanne Nilsson| Flickr Creative Commons

This is the second of a three-part series on traffic PPPs.

"It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so."
“The Big Short” 
 
Forecasting traffic accurately is a very difficult and thankless task, as I explained in my previous blog: Traffic Risk in Highway PPPs, Part I: Traffic Forecasting. As such, this gives rise to very real financial risks if these forecasts turn out to be wrong. This risk has crystallized many times as manifested in high-profile distressed projects, bankruptcies, renegotiations and bailouts.

So what’s driving the inaccuracy and resulting risk in traffic forecasts? In the Public-Private Infrastructure Advisory Facility (PPIAF) and Global Infrastructure Facility (GIF) publication, Toll Road PPPs: Identifying, Mitigating and Managing Traffic Riskwe postulate that forecasting inaccuracy comes from three sources:

Traffic Risk in Highway PPPs, Part I: Traffic Forecasting — It’s ok to be wrong, just try to be less wrong

Matt Bull's picture


Photo: Jorge Franganillo | Flickr Creative Commons

This is the first of a three-part series on traffic risk in PPPs

"Prediction is very difficult, especially about the future."
– Professor Nils Bohr, Nobel Laureate

Professor Bohr was right: prediction is hard work. As a species, we don’t have difficulty making predictions. I, for one, frequently make doom-laden predictions on a diverse range of subjects ranging from politics to the fortunes of my beloved football team, Liverpool Football Club.

No, the problem is that humans, as a rule, are not very good at predictions. Sadly, that illusive ‘crystal ball’ still has not been invented. And the sheer complexity of living on an ever-changing and evolving planet alongside 7 billion equally complex individuals—all making unique but increasingly interdependent decisions—makes even the most straightforward predictions difficult. 

The Global Infrastructure Facility: Closing the infrastructure gap by building country capacity

Henrique Pinto's picture


Photo: paulisson miura | Flickr Creative Commons

It is well-established that the lack of infrastructure is one of the main problems facing developing countries. Good infrastructure is one of the most important drivers for development and competitiveness. The question that follows is straightforward: how can we mobilize private financing for high-quality infrastructure investment in these countries?
 


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