Earlier this month, development banks from around the world took stock of where they stand and where they see their efforts having the greatest impact at a meeting organized by the World Bank and Brazil’s development bank, BNDES.
As the world struggles in narrowing that gap. They can help to crowd-in the private sector and anchor private-public sector partnerships, particularly for infrastructure financing.
However, misusing development banks can lead to fiscal risks and credit market distortions. To avoid these potential pitfalls, , operate without political influence, focus on addressing significant market failures, concentrate on areas where the private sector is not present, monitor and evaluate interventions and adjust as necessary to ensure impact, and, finally, be transparent and accountable.
Two themes characterized the discussion at the meeting: . To support Small and Medium Enterprises (SME) finance, development banks use partial credit guarantees while letting private lenders originate, fund, and collect on credit. In markets with limited competition, development banks support the creation of an ecosystem of specialized Micro, Small, and Medium Enterprises (MSME) lenders to which they provide a stable funding source.
multilateral development banks
Ede Ijjasz-Vasquez, Senior Director of the World Bank’s Social, Urban, Rural and Resilience Global Practice, speaks with Juan Pablo Bonilla, Manager of the Climate Change and Sustainable Development Sector for the IADB, on how the organizations will work together to finance the “New Urban Agenda.”
It does not happen often that one of the finest actors of our time tweets about a World Bank supported project and invites all his fans to have a look at the impressive pictures taken from space. In fact, I can’t remember having seen that before.
But this is what Oscar winner and climate activist Leonardo DiCaprio did a few months ago when the Noor Concentrated Solar Plant (CSP) in Morocco—the largest CSP plant in the world - was opened. Once finalized, in two years, it will provide clean energy to 1.1 million households. I visited the plant two weeks ago and it is truly an impressive site. The indirect benefits of the project might even be larger: it has advanced an important and innovative technology, it has driven down costs of CSP, and it holds important lessons for how public and private sectors can work together in the future.
I am proud that the World Bank, jointly with the African Development Bank and a number of foreign investors, supported this cutting-edge solar energy project. But it was made possible thanks to the Climate Investment Funds (CIF), which put in US$435 million to “de-risk” the investment, playing an essential role to kickstart the deal.
Although institutions and the private sector have devoted both money and time to capacity building in public-private partnerships (PPPs) for infrastructure, results have been mixed. A misalignment of expectations remains – and this manifests itself in too few deals reaching the market and the wrong projects being proposed as PPPs. But a group of multilateral development banks (MDBs) is committed to solving this problem with the new APMG PPP Certification Program. This innovative, collaborative approach to setting standards for PPP professionals will ultimately result in PPP projects that are appropriate solutions tailored to the needs of the people they serve. , which is accessible to anyone with an internet connection – and part of it is offered at no cost.
Conversation may be an art, but the best conversations spur action, too – and the upcoming Global Infrastructure Forum 2016 will focus on strengthening and formalizing collaboration among multilateral development banks (MDBs) to improve infrastructure delivery around the world. This unprecedented daylong gathering in Washington, DC brings together the leaders of the MDBs, as well as development partners and representatives of the G20, G-24, and G-77 and the United Nations, with the aim of enhancing multilateral collaborative mechanisms to improve infrastructure delivery globally.
Brilliant. Someone’s finally done it. For years I’ve been moaning on about how no-one ever asks developing country governments to assess aid donors (rather than the other way around), and then publishes a league table of the good, the bad and the seriously ugly. Now AidData has released ‘Listening To Leaders: Which Development Partners Do They Prefer And Why?’ based on an online survey of 6,750 development policymakers and practitioners in 126 low and middle income countries. To my untutored eye, the methodology looks pretty rigorous, but geeks can see for themselves here.
Unfortunately it hides its light under a very large bushel: the executive summary is 29 pages long, and the interesting stuff is sometimes lost in the welter of data. Perhaps they should have read Oxfam’s new guide to writing good exec sums, which went up last week.
So here’s my exec sum of the exec sum.
The release of the joint statement “From Billions to Trillions: Transforming Development Finance” at the World Bank-IMF Spring Meetings is one of the most satisfying moments during my two-year tenure as Managing Director and World Bank Group CFO.
My one regret is that the title should have been Billions for Trillions.
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.
- East Asia and Pacific
- Latin America & Caribbean
- Bus Rapid Transit
- BRT systems
- public transit
- public transport
- public transportation
- infrastructure financing
- infrastructure financing gap
- multilateral development banks
- MDB collaboration
- asian infrastructure investment bank. aiib
How can we get much more private sector funds to infrastructure financing? The infrastructure gap is enormous and growing; governments are just not be able to go it alone. Innovation here is key.
The World Bank, the Multilateral Investment Guarantee Agency (MIGA), and the State of São Paulo just completed an innovative deal that blends the power of state funds, World Bank lending, and private-sector banking participation for a successful (and replicable!) result. Read this blog to learn more.
International long-term private finance to developing countries has changed dramatically in the wake of the global financial crisis. Caught in “post-crisis blues”, as my World Bank colleagues Jeff Chelsky, Claire Morel and Mabruk Kabir called it in a recent Economic Premise, some traditional sources of long-term finance are strained, and alternatives have not been able to adequately compensate. Private financing of infrastructure has been particularly hurt.