Photo: Reychelle Ann Ignacio | Marketplace Designers
Sometimes change creeps up on us. And we can step back and realize that the world is different. This rings true currently in the infrastructure space. Here are three examples:
It’s now commonly agreed that we won’t achieve the Sustainable Development Goals without the involvement of private sector solutions: management, financing, and innovation. Involving the private sector is no longer an “if” question. We’re beyond ideology and calls for more aid transfers. Now we’re looking at “how”—and under what circumstances—crowding in private solutions help deliver better access to infrastructure services while being fiscally, environmentally, and socially sustainable.
This is what the World Bank Group’s Maximizing Finance for Development initiative is about, for infrastructure and other sectors as well. Cameroon’s power sector is a good example, where sector reforms have been supported by public loans, which in turn have helped crowd in private and financing from development finance institutions (DFIs) for large investments like the 216 megawatt Kribi gas project.
For several years there has been talk about infrastructure as an asset class. Although we’re not quite there yet, progress is accelerating. Datasets such as those put out by Moody’s on default and recovery rates for project finance loans, and surveys and data put out by EDHEC provide a richer set of information for infrastructure investors. In addition, the multilateral development banks (MDBs) are collaborating around a long-term data initiative to provide more information. Initiatives such as IFC’s MCPP provide more access to infrastructure investment by institutional investors. Standardization is progressing, with more countries running infrastructure programs, helped by programs and resources such as the World Bank Group’s Scaling Solar initiative and the Guidance on PPP Contractual Provisions. And now, for the first time, policymakers and investors have access to benchmark information around PPP procurement in 135 countries.
Similarly, after several years of agreeing about the need to step up infrastructure project preparation for projects involving potential private sector participation, the various initiatives are bearing fruit. The multi-MDB Global Infrastructure Facility is currently supporting 41 projects with another 23 in development, for potential investment of $44 billion. It is expected that eight or nine projects will come to commercial or financial close over the next 12–18 months. Commercial close was reached recently on the Clark Airport in the Philippines with IFC as the technical partner. Other project preparation facilities managed by, for example, the European Bank for Reconstruction and Development (EBRD) and the Asian Development Bank (ADB), have also been very active. And the Source platform now has over 180 infrastructure projects uploaded.
It’s too early to draw definitive conclusions, but the 2017 annual update of the Private Participation in Infrastructure (PPI) database reported that investment in private infrastructure in developing countries increased by 37 percent over 2016, at $93.3 billion across 304 projects.
These changes didn’t just happen. They are the result of sustained work from MDBs/DFIs, government policymakers, and private investors—increasingly around shared initiatives and on common platforms.
Finally, on a personal level, change has crept up on me. Starting today, I’ll be taking a year off from the World Bank Group to walk 3,500 miles around the coast of England and Wales to raise awareness that cervical cancer is now a disease that can be eliminated. This cancer kills 250,000 women each year. One of those women was my wife, Melitta. This doesn’t need to happen anymore. Cervical cancer is the first one which mankind can eradicate, through vaccination and screening.
Follow my progress and learn more at www.3500toendit.com. I also launched a 2-minute video yesterday; I’d be honored if you view it.
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