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BRIEF February 2, 2018

Infrastructure Finance

Helping governments provide universal access to quality public services is not just an ambitious development goal, it’s an urgent necessity—firmly consistent with the goals of the World Bank Group and the SDGs.

We know that infrastructure needs across the globe exceed sources of traditional funding. Moreover, these traditional sources may even contract due to fiscal constraints and decreased donor resources.

The international development community acknowledges the increasing need for enhanced participation of the private sector—especially as long-term financier—in infrastructure projects.

The World Bank, in tandem with other multilateral development banks, aims to expand infrastructure finance markets across economies, leveraging private funding from commercial and institutional investors to help ensure better infrastructure services get to more people, sustainably.

What We Do

We help client countries address the rising demand for infrastructure through various levels of intervention: advisory services on policies, regulations, and financial market reforms; partnership with governments and infrastructure agencies to strengthen institutional capacity to absorb private-sector investment responsibly; development of investment vehicles and credit enhancement instruments to crowd-in commercial investors; and creation of synergies with different parts of the World Bank Group to ensure infrastructure projects are cutting-edge and informed by environmental and social best practices.

We offer a range of products and services to our client countries:

Upstream Technical Advice: We provide technical advisory services on public-private partnership (PPP) regulatory and institutional frameworks to ensure project bankability, effective risk-allocation policies, early bankability review and prioritization of project pipeline, and government transaction advisory.

Downstream Technical Assistance and Financial Intervention Instruments, including:

  • Capital markets solutions: Capital markets framework for long-term finance, financial innovations and regulations to mobilize institutional investors (including credit enhancement and other risk-sharing instruments) both through debt and equity markets
  • Banking solutions: Banking sector policies and prudential regulations, risk management and hedging instruments, and the use of Islamic finance
  • Guarantee programs/facilities: Capacity development of national development banks for catalytic role and/or support to the design and implementation of standalone facilities
  • Tailored financing solutions: Optimization of blended financing and credit enhancements to crowd-in private investments
  • WBG loans and guarantees: Interventions that leverage commercial investors: credit enhancements for obligators, off-takers, and issuers; risk-sharing; refinancing; pooled financing vehicles; investment funds; green finance schemes; and more.

Country Diagnostics and Other Building Blocks of Infrastructure Finance: Comprehensive country diagnostics help elaborate action plans and the development of monitoring and evaluation frameworks, among others. 

Analytics, Knowledge-sharing, and Tools: When the private sector is mobilized for infrastructure finance, concerns easily arise. As a result, an important element of our work is standard-bearing and knowledge sharing—to ensure that private-sector participation brings solid, sustainable results. Supporting governments as they make informed decisions about financing their infrastructure programs, we host knowledge platforms that are best-in-class and well-trafficked. We also run the preeminent, multilingual certification that addresses in-country capacity constraints with respect to PPPs.

With attention to fiscal risk strong and growing, financing infrastructure—with its high price tags—is under the microscope. The World Bank has its eye closely on the sustainability of financing, offering a self-paced course that seeks to equip professionals with essential skills in assessing fiscal implications and managing related fiscal risks when private-sector finance is used. The Public Fiscal Risk Assessment Model (PFRAM), developed jointly with the IMF, is an analytical tool that helps governments assess fiscal costs and risks arising from PPPs.

Last Updated: Oct 03, 2019