Global Infrastructure Facility (GIF) Opens for Business
Image
Photo: Kubat Sydykov / World Bank

Tackles Sustainable Infrastructure Gap in Emerging Markets and Developing Economies

Addis Ababa, July 13, 2015—Speaking at the Third International Conference on Financing for Development in Addis Ababa, Ethiopia, World Bank Group CFO Bertrand Badré  announced today that the Global Infrastructure Facility (GIF) is “open for business” for governments from emerging markets and developing economies.  

“We cannot end poverty and we cannot deal with financing for development, without putting infrastructure front and center,” said Badré. “The GIF would like to invite emerging market and developing country governments to come forward with projects and investment programs that may need support through the project preparation and transaction process.”

This would include infrastructure investments in basic services such as power, transport, water and sanitation that have the potential to leverage private finance and that come with strong government commitment.

Infrastructure plays a critical role in driving growth, competitiveness, job creation, poverty alleviation and ultimately in sustainability—both in decisions that limit emissions, that strengthen resilience and that address local environmental concerns.  Conversely, inadequate infrastructure, particularly in developing countries, is a constraint on economic growth and a persistent challenge for governments. 

The Global Infrastructure Facility is focused on expanding the universe of infrastructure projects that have the potential to mobilize private investment. A collaboration among the major multilateral development banks working with the governments of Australia, Canada, China, Japan and Singapore have come together in the partnership called the GIF. The GIF is dedicated to the design, preparation and structuring of viable and sustainable infrastructure projects. They will be designed to maximize the likelihood of financing from long-term private sources such as institutional investors.  The GIF’s private sector Advisory Partners represent some US$12 trillion in assets and include pension funds, insurance companies, fund managers, reinsurers and sovereign wealth funds, as well as commercial banks. Along with the World Bank Group, Canada is co-chair of the GIF’s Governing Council.


" Engaging private sector financing to help address the estimated $1 trillion per year global gap in infrastructure development is critical to meeting our development objectives. We are pleased to see the interest shown in the GIF by investors and infrastructure service providers and we will work closely with global and Canadian partners to help ensure the successful implementation of the GIF. "

Christian Paradis

Minister of International Development and La Francophonie, Government of Canada

The GIF is one tool in the toolbox tackling the immense infrastructure needs globally. It is a critical time to address the infrastructure gap.  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 basic services.    From Africa to Asia, the lack of basic infrastructure for millions is stifling economic development and impacting people’s lives.  The World Bank estimates for example that blackouts alone cut the gross domestic products of Sub-Saharan countries by 2.1 percent.

The world is facing an enormous infrastructure challenge over the next two decades.   By 2030 the world will most likely need 40 percent more energy and face a 40 percent shortfall of water—pressures that may well be further accelerated by climate change.  It will take partnerships at every level, with both the public and private sectors and with civil society to provide both the money and the expertise to tackle the sustainable infrastructure gap over the coming decades.

That is already beginning to happen.  Infrastructure is now front and center with the OECD, G20, G77, and the IMF.  The multilateral development banks are ratcheting up their work on infrastructure.  Some are increasing their balance sheets (ADB), some are growing their lending (WBG), many are setting up project preparation facilities (AfDB, EBRD, ADB), and, of course new MDBs like AIIB are specifically focusing on infrastructure.

Last year the World Bank Group mobilized US$24 billion in financing that included a wide range of financing instruments.  The GIF will complement these types of instruments for both the World Bank Group and those of its other partners.

“With all of these institutions bringing more resources into infrastructure, the next question becomes ‘What is the quality of the investment we will make?’ It’s not just a matter of money. The quality of infrastructure matters to get the maximum benefit for jobs and growth, for people’s lives, for the environment and for a climate-friendly future,” said Jordan Schwartz, Head of the Global Infrastructure Facility and Acting Director of the World Bank Group’s Singapore Hub. The challenge for all of us, including new institutions, will be to work with governments and improve the pipeline of projects.  Within the GIF, we will focus on climate-smart projects that are low emitting or encourage efficiency in the provision of infrastructure services as well as projects that can help boost trade, such as transport corridors.”

For more information on the GIF project application process for emerging markets and developing economies and to initiate a project request, please go to www.worldbank.org/gif.  The Project Overview form can be sent to projects@globalinfrafacility.org.