Alone we can do so little but together we can do so much. This powerful quote by Helen Keller reminds us the spirit behind collaboration and joining forces towards a common goal. Indeed, partnerships provide a strategy and offer a platform to marshal the necessary resources, skills and ideas. The development arena is no exception and that’s why partnerships are vital to end poverty and boost shared prosperity across the globe.
Sustainable Development Goal (SDG) 17 is about partnerships for the SDGs and it calls for strong global partnerships and cooperation. When designed well and implemented in a balanced regulatory environment, Public-Private Partnerships (PPPs) can bring efficiency and sustainability to public services such as water, sanitation, energy, transport, telecommunications, agricultural services or health and education.
In the case of the World Bank Group (WBG), during the last 20 years, successive policy and operational initiatives have sought to increase the number of joint (World Bank, IFC and MIGA) projects in order to work as a cohesive institution. According to a report by the Independent Evaluation Group reviewing two decades of WBG joint projects, nearly three-quarters of those which were approved (83 out of 112) supported investment projects through a blend of IFC investments, MIGA guarantees, or World Bank Investment Project Financing (IPFs) and guarantees. Joint projects with IFC consisted mostly of investments, primarily loans. The main region where these projects came to fruition was Africa, followed by the Middle East and North Africa. The study also found that 46% of the World Bank Group’s co-financed projects supported the infrastructure sector, mainly in the energy area.
What do WBG joint projects bring to the development table, especially in light of the COVID pandemic? Their added-value includes aspects such as facilitating investment in high-risk situations, supporting pioneering investments in member countries, paving the way for foreign direct investment for first-time cross-border investors and advancing complex and complicated transnational projects. Indeed, drawing on private financing and sustainable private sector solutions is essential to achieve the SDGs and reduce the impacts of COVID-19. In light of these benefits, MIGA has launched a $6.5 billion facility to support private sector investors and lenders in tackling the pandemic. However, joint projects pose a number of challenges too. They entail additional transaction costs, which may delay completion. Higher preparation, appraisal, structuring and negotiating of financial and legal documents as well as implementation, monitoring and evaluation costs can outpace budgeted sums as well. Now more than ever, we have no choice but to collaborate and bring the best package we can to our clients to recover and build a better future for their people. This is where the WBG can bring out its best as an institution.
During my MIGA years two decades ago, I had the chance to lead a joint IBRD-MIGA guarantee project for a gas pipeline connecting Brazil and Bolivia. Despite various difficulties throughout the process, the happy faces of our clients and beneficiaries upon the successful implementation of this project are still vivid memories. Working together as an institution might look like hard work, but instead of giving up, we should always go the extra mile because our clients will benefit from our joined knowledge and expertise.
: for example, by promoting collaboration between IFC and the World Bank on Maximizing Finance for Development (MFD). This approach asks the WBG to help countries maximize their development resources by drawing on private financing and sustainable private sector solutions to provide value for money and meet the highest environmental, social, and fiscal responsibility standards, and reserve scarce public financing for those areas where private sector engagement is not optimal or available. Recently, While the road was tough and much remains to be delivered for the country’s ambitious agenda, this collaborative approach was a success. Indeed, as Aristotle once said, the whole is often greater than the sum of its parts.
In response to the COVID-19 pandemic, the WBG is more determined than ever to help its client countries build a resilient recovery. It takes leadership. It takes determination. It takes empathy. If we, the World Bank, IFC and MIGA work together hand in hand, we can bring a vast array of solutions to the most pressing challenges in the development sector. And that is worth every step of the way.