The Global Infrastructure Facility (GIF) is a global open platform that facilitates the preparation and structuring of complex infrastructure public-private partnerships (PPPs) to enable mobilization of private sector and institutional investor capital.
Infrastructure plays a critical role in growth, competitiveness, job creation and poverty alleviation. Investment in high-quality, sustainable infrastructure can provide basic services to households; lead to productive gains for industry; provide market access for agriculture; enable sustainable urban development; open corridors of trade for poor and landlocked countries to the global economy; and help progress towards a more climate-smart world.
However, despite robust growth over the last decade, many people in emerging markets and developing economies (EMDEs) still do not have access to reliable and affordable infrastructure services. This lack of infrastructure comes at enormous economic and social cost. Over 1.3 billion people—almost 20 percent of the world’s population—still have no access to electricity. About 768 million people worldwide lack access to clean water; and 2.5 billion do not have adequate sanitation; 2.8 billion people still cook their food with solid fuels (such as wood); and one billion people live more than two kilometers from an all-weather road.
This strong unmet demand for infrastructure investment in EMDEs is estimated at above US$1 trillion a year. Meeting this need presents a significant financing challenge given constraints on existing sources of infrastructure finance, particularly in the public sector. To help bridge that financing gap, private commercial lenders and institutional investors have joined with multilateral development banks (MDBs) and donor countries to create the Global Infrastructure Facility, the GIF.
The GIF platform coordinates and integrates the efforts of Multilateral Development Banks (MDBs), private sector investors and financiers, and governments interested in infrastructure investment in Emerging Markets and Developing Economies—fostering collaboration and collective action on complex projects that no single institution could achieve alone.
The GIF private sector partners alone represent about $12 trillion in assets under management, seeking diversification into productive investments with risk-reflective returns. By building a global pipeline of sustainable infrastructure investment projects, structured to meet both the needs of service users and the investment appetites of such investors, the GIF has the potential to unlock billions of dollars for infrastructure in the developing world.
The GIF became operational in April 2015, with an initial capitalization of US$100 million. The first three years of GIF operations constitute a “pilot phase,” during which the GIF concept, activities, and partnership model will be tested. During this time it is expected that at least 10 to 12 project support activities will be undertaken, allowing the GIF model to be tested across a range of project sectors and types, geographies and country environments. At the same time, the concept for a future flexible financing window will be further refined and tested with a view to mobilizing additional resources as needed during the pilot phase.
The GIF is now accepting applications for project preparation and transaction structuring support.
The GIF is a partnership among governments, multilateral development banks, private sector investors and financiers—designed to provide a new way to collaborate on preparing, structuring and implementing complex projects that no single institution could handle on its own. The comprehensive project support provided by the GIF draws on the combined expertise of its technical and advisory partners. This group, which includes commercial banks and institutional investors, ensures that well-structured and bankable infrastructure projects are brought to market in a way that sustainably meet the needs of governments and service users. This unique collaborative approach has won strong support from private investors, donors, and governments from emerging markets and developing economies.
GIF partners fall into one or more of the following categories:
A Governing Council oversees the GIF partnership, supervising strategic programming and funds management and the development of operational policies and procedures. It also holds the GIF’s management accountable for delivering on objectives and principles. The Governing Council comprises representatives of funding and technical partners and representatives of emerging markets and developing economies, and is co-chaired by the World Bank Group and a Funding Partner.
An Advisory Council, comprising all GIF partners and co-chaired by the Managing Director and Chief Financial Officer of the World Bank Group together with an Advisory Partner, provides a forum for discussion on the latest developments in infrastructure finance—bringing partners together to discuss issues that are common across GIF-supported projects, to share knowledge and experience, and inform the design of GIF interventions.
The GIF is administered by a Management Unit, housed at the World Bank Group. The GIF Management Unit is responsible for building the facility, leading the consultation and capitalization process, managing and allocating the resources of the GIF, assuring quality of GIF project design, and providing coordinating support as projects progress, particularly with respect to liaison duties with technical and advisory partners.
GIF Advisory Partners
The private sector partners and financial institutions that have come together to collaborate on GIF represent about US$10 trillion in assets under management. These include some of the world’s leading fund managers, pension funds, insurance companies, reinsurers, sovereign wealth funds and commercial banks. They are:
Development Finance Institutions, Regional Development Banks and State Development Banks
Organizations – Quality and Sustainability
The GIF is administered by the World Bank Group through the GIF Management Unit. The GIF Management Unit is responsible for building the facility, leading the consultation and capitalization process, managing and allocating the resources of the GIF, assuring quality of GIF project design, and providing coordinating support as projects progress, particularly with respect to liaison duties with technical and advisory partners.
Implementation of GIF project activities will be led by technical partners. GIF project teams will comprise technical staff from the World Bank Group and technical partner institutions, as well as the engineering, financial, economic, or legal firms hired with GIF resources. Project teams will be composed according to the demands of a particular project, including region and sector focus, and the skills and expertise required for the proposed activities. Joint project teams may also be formed if the GIF is supporting projects in which more than one technical partner is already closely involved, or as needed to meet the full range of demands of the project.
The GIF supports Governments in bringing well-structured and bankable infrastructure projects to market. GIF’s project support can cover the spectrum of design, preparation, structuring and transaction implementation activities, drawing on the combined expertise of the GIF’s Technical and Advisory Partners and focusing on structures that are able to attract a wide range of private investors.
GIF’s project preparation and transaction support activities can include advisory support to client Governments as needed through the following project stages:
Within this range of possible activities, the scope of GIF preparation and transaction support to a particular project should be defined to complement other identified and potential sources of funds for project preparation and transaction implementation, in a way that is both flexible and comprehensive. That is, GIF resources can be used to fill any gaps in project preparation or structuring needs given other resources available, and should take into account the full range of additional work needed to bring a project through to successful financial close.
GIF activities will be undertaken stage-by-stage, ensuring that benefits, costs and risks are appropriately considered at each stage. This approach, combined with the GIF’s risk-sharing reimbursement model—under which costs are recovered from the winning bidder upon successful financial close—the GIF significantly mitigates overall project preparation “failure risk” for its client governments.
Going forward, the GIF intends to complement its project preparation and transaction structuring activities by introducing a flexible financing window, with resources available to inject into the project financial structure. This financing window—now under design, in close consultation with GIF Partners—is expected to be used flexibly to backstop the provision of credit enhancements, take first loss, or support financial instruments that would not otherwise be available and in response to the specific needs of GIF projects—with a view to encouraging innovation in design or use of those mechanisms and/or to fill specific project financing gaps.
It is expected that a further injection of funding will be sought from the GIF Partners for initial capitalization of this financing window within the GIF’s first years of operation.
The GIF works with client governments from emerging markets and developing economies to support infrastructure projects or programs that will be structured to attract substantial private capital. GIF-supported projects may be implemented by privately-operated entities (as under a PPP modality), or by public sector entities operating on a commercial basis—provided in either case that they are providing infrastructure as a public service, and that the project has strong potential to achieve financial viability and sustainability and to attract long-term private capital.
The GIF can support projects across the following sectors and sub-sectors:
Within these eligible sectors, the GIF focuses on projects that are aligned with two thematic focus areas:
Eligible projects will be assessed against the following selection criteria:
Eligible projects that meet these selection criteria may be brought to the GIF for support irrespective of the stage of project development. During its pilot phase, the GIF will seek to support projects at a range of project development stages. Finally, GIF-supported projects are also selected to achieve diversity in the overall portfolio of GIF activities— by sector, region and country income level.
The GIF’s 3-year pilot program expects to support 15-20 projects that meet its selection criteria across a broad range of regions, income levels and sectors. The GIF team has been working to identify projects that could potentially be eligible for and benefit from GIF support to attain this target. As part of the process, Planning Grants of up to $150,000 are available to help the project proponent provide all the information needed to compete the full project application.
Three projects have reached a relatively advanced stage of planning: The GIF is in the process of approving Planning Grants to these three projects to help the governments and their implementing partners to more clearly define the scope of work required and how the GIF can best support them. While there is a good chance that these Planning Grants will lead to actual projects, the final decision will depend on the outcome of the scoping done with the help of the Planning Grant. Below are details of the three projects:
The GIF is now accepting applications from interested governments for project preparation and transaction structuring support. The application process involves several, iterative steps—designed to ensure effort invested in preparing project applications is well-spent, by first identifying whether a proposed project appears likely to be consistent with the GIF’s eligibility and selection criteria before committing the time and resources needed to develop a detailed GIF Application. These steps are described below.
For more information, or to discuss a potential project please contact the GIF Management Unit at firstname.lastname@example.org.
Who can apply?
GIF project preparation support is provided to governments in Emerging Markets and Developing Economies (EMDEs), and delivered by the GIF’s Technical Partners. As such, GIF applications should be submitted by prospective client governments, with support and in coordination with one or more Technical Partner as needed. Technical Partner teams are also welcome to reach out to the GIF team to ascertain whether a project might be eligible (by completing a project overview, as described further below).
Eligible governments include national or sub-national governments of the recipient member countries of the GIF’s Technical Partners. Applications may be submitted on behalf of a prospective client government by the ministry response for finance, responsible line ministry, or other department, agency, or publicly-owned entity. As described further below, before completing the application process letters of support from all relevant ministries, including the ministry of finance at the national level, will be required.
How to apply?
Step 1: Complete and submit a “Project Overview” (download here)
The GIF application process is started by submitting a “Project Overview” for the proposed project or infrastructure investment program. This overview should take no more than an hour or two to complete, and includes sufficient project details to confirm eligibility and initially check against selection criteria, as well as brief information on current project status and likely needs. A Project Overview may be submitted to the GIF Management Unit by a government directly, or by a GIF Technical Partner team on behalf of a Government. The GIF Management Unit will review the project overview, discuss the project with its proponents, and consult with other Technical Partners active in the region. Potentially eligible candidates will be sent a package of application material, including the application template and guidance material as well as a planning grant request form, and invited to submit a full GIF application.
Having reviewed the detailed application requirements as described below, and in discussion with the GIF Management Unit, the project proponent should consider whether all the information needed to complete the full application is available. If not, the applicant can request a planning grant of up to $150,000. Within this limit, planning grants may be used as needed to:
Planning Grant requests should be submitted jointly by the prospective client government and the GIF Technical Partners that will implement the planning work, in close consultation with its government counterparts. If the government is not already working with a Technical Partners, the GIF team will be happy to connect them at this stage. Planning Grant requests will be reviewed and approved by the Management Unit, based on consistency of the project with GIF requirements and the adequacy of the proposed scope of work for the planning grant to enable completion of a well-prepared and potentially eligibly GIF application for the project. Applicants will be notified of the MU’s approval within two weeks of submission of a complete Planning Grant request.
Step 3: Prepare and submit a full GIF Application
The full application asks applicants to flesh out the information already contained in the project overview by providing more detail on three key aspects:
The full GIF Application must be submitted by the government entity that will act as the primary counterpart for the GIF Activity, and accompanied by letters of support from all relevant government ministries—at least, the ministry responsible for finance and the responsible sector ministry. In most cases (and in particular, if a planning grant has been used) one or more GIF Technical Partners will also already be supporting the Government in preparing the application, although this is not a requirement. The Management Unit will review each application for consistency with GIF requirements and completeness, as well as potential consistency of the proposed GIF Activity with portfolio diversity targets, given the GIF’s existing portfolio of Activities. If there are gaps or more information is required, the GIF Management Unitwill liaise with the prospective client Government and supporting Technical Partners as needed to complete the application.
Step 4: Prepare an Activity Implementation Plan
Once the application has been reviewed and found to be complete, the next step is to agree and finalize activity implementation arrangements. These arrangements will be set out in an Activity Implementation Plan, to be attached to the application. This plan will build on the information provided in the full application, but require more detailed information on cost and procurement plans for external advisors, activity timeframe and milestones, as well as the roles and responsibilities of the GIF Technical Partners involved (the Activity Implementation Team) and their Government counterparts. The roles and responsibilities of each partner will be agreed among all interested Technical Partners by consensus, in consultation with the Government, as set out in the GIF Operating Guidelines. “Interested Technical Partners” in this case are expected to include, but not necessarily be limited to, those Technical Partners that have supported the application preparation.
Step 5: Approval of GIF activities
Once the Activity Implementation Plan is complete, the full proposal will be submitted for approval: either to the GIF’s Governing Council (for activities over US$500,000—expected to comprise the majority of GIF support activities), or to the Management Unit (for activities under that threshold). The applying government and all Technical Partners involved will be notified of the Governing Council’s decision within four weeks of completion of the full GIF proposal.