Building modern, sustainable and reliable infrastructure is critical for meeting the rising aspirations of billions of people around the globe. Infrastructure investment helps raise economic growth rates, offers new economic opportunities, and facilitates investment in human capital. A significant increase in infrastructure investments in Emerging Market and Developing Economies (EMDEs) is needed to sustainably achieve poverty reduction and shared prosperity, reach the Sustainable Development Goals (SDGs) and tackle climate change.
We live in a world full of challenges, development needs related to infrastructure shortages are acute. Basic infrastructure including roads, water and sewage pipes, and electrical power remains scarce in many developing countries. Nearly 3 billion people rely on wood, coal, charcoal, or animal waste for cooking and heating, causing health risks. More than 660 million people lack access to a clean source of drinking water, and every day nearly 1,000 children die due to preventable water and sanitation-related diarrheal diseases. Water scarcity affects more than 40% of the global population and is projected to rise. Congested and inadequate ports, airports, and roadways are a drag on growth and trade. Landlocked countries have trade costs that are 70% higher than transit coastal countries. Road safety is also an issue with 90% of road deaths occurring in low- and middle-income countries. By 2045, the number of people living in cities will increase by 2 billion, to a total of 6 billion urban residents — putting additional pressure on transport, energy, water, and other municipal infrastructure.
Sustainable and reliable infrastructure can provide enormous benefits to people’s lives. Yet, in order to meet the increasing demands and needs of people around the world, much work is needed to make projects "investor ready," and to develop innovative frameworks to leverage private investment. According to the World Bank Group’s Private Participation in Infrastructure (PPI) Database total investment in infrastructure in 2015 remained steady at $111.6 billion, compared with $111.7 billion in 2014 and $124.1 billion over the past five years. Solar energy investment climbed 72% above the previous five-year average to reach $9.4 billion; renewables captured nearly two-thirds of energy investments with private participation.
Public-private partnerships (PPPs) can be a tool to deliver much needed infrastructure services. PPPs address the World Bank Group’s twin goals – eliminating extreme poverty and boosting shared prosperity – by enhancing the reach and quality of the delivery of basic infrastructure services.
When designed well and implemented in a balanced regulatory environment, PPPs can bring greater efficiency and sustainability to the provision of public services such as water, sanitation, energy, transport, telecommunications, healthcare and education.
Every country has its own unique challenges, priorities, and financial constraints. In some cases, PPPs can provide benefit by leveraging the management capacity, innovation and expertise of the private sector, but other times a traditional public sector approach could be more appropriate.
The World Bank Group is committed to helping governments make informed decisions about improving access and quality of infrastructure services, including, where appropriate, using Public-Private Partnerships (PPPs) as one delivery option. This approach is further enabled by working on: strengthening data, building capacity, developing and testing tools, promoting disclosure and encouraging engagement with all relevant stakeholders.
The Bank Group has been working on PPP and infrastructure tools to empower governments and clients with better decision making around PPPs.
Last Updated: Mar 30, 2017