Good morning, everyone.
Thank you, Secretary Yellen, for hosting this roundtable on infrastructure. It’s a vital development challenge.
Thank you also to Governors for the very strong support expressed for the World Bank Group at the Development Committee meeting on Friday and throughout our Spring Meetings.
We’ve been working hard to act and deliver – on COVID-19, vaccinations, climate projects, FCV, Ukraine, and other challenges. The world is facing severe overlapping crises, and we welcome working with all of you here today.
The important goal of increasing private investment in developing countries, especially infrastructure, faces many obstacles, the latest being sharply rising interest rates.
I’ll highlight a few points. Good diagnostics are vital. We work through Country Private Sector Diagnostics (CPSD) to identify country level priorities and critically needed reforms. This leads to Infrastructure Sector Assessment Programs (InfraSAPs), which assess sectors. IFC’s and MIGA’s upstream initiatives are also key inputs. We connect these to our country programs to encourage and finance reforms that mobilize private investment.
In this regard, our Climate Change Action Plan launched an important climate-related diagnostic tool, Country Climate and Development Reports (CCDRs). These will encourage investment in climate-smart infrastructure including adaptation and greenhouse gas (GHG) emission reduction. We think this area provides substantial opportunities for gains by optimizing the balance sheets of state-owned enterprises.
A similar approach is vital for Secretary Yellen’s broader focus on health, gender, and digital advances. Each of these is a global public good that should be treated as an asset class. The G20 Principles for Quality Infrastructure Investment provide a very solid basis for cooperative efforts, and I take note of Vice Minister Kanda’s intervention.
At COP26 in Glasgow, we discussed key steps for the global community, including the need for clearly identified projects that provide climate benefits and draw on multiple sources of financing. This work – to combine complex, long-term climate projects with major new sources of community financing – is a huge undertaking for the World Bank Group. We have put forward new papers on these efforts this month, including an aggregation platform to mobilize ESG-linked, long-term finance at scale to support climate transitions.
We need to channel appropriate sources of financing toward key GHG reduction projects that maximize impact. U.S. Climate Envoy, John Kerry, discusses this in detail in today’s letter to the Wall Street Journal, noting as an example that reduction in methane leakage can provide as much climate impact as removing every car in the world.
One challenge the MDBs face is the pressure from manufacturers, financiers, and borrowing governments to finance major projects and absorb the risk onto their balance sheets. Debt transparency and sustainability are necessary steps toward greater investment in quality infrastructure and are vital if project de-risking and risk-sharing instruments are used to transfer risks from the private sector to development and multilateral institutions.
We welcome these combined efforts to unlock larger volumes of private finance for sustainable infrastructure.
Thank you.
