Sustainable Infrastructure Finance

Quality, sustainable, low-carbon and inclusive infrastructure is crucial for creating a livable planet. The scale of the world’s infrastructure needs is huge, and so is the financing required to meet the needs of millions of people.

Consider that, globally, 675 million individuals are without electricity, 2.3 billion lack drinking water, 3.6 billion lack safe sanitation, 1 billion live more than 2 kilometers from an all-season road, and 450 million live beyond the range of a broadband signal. Addressing these challenges requires about $1.5 trillion every year through 2030 - 4.5% of the GDP of low- and middle- income countries.

In addition, infrastructure is both vulnerable to and a contributor to climate change, making the challenge is even more complex. Every dollar of infrastructure investment must support high-quality, sustainable infrastructure that maximizes its value to a country’s economy, citizens, and environments and that builds resilience to extreme climate events.

Traditionally, governments have led infrastructure financing. But the world is traversing difficult times, and governments are experiencing unprecedented fiscal stress.  Public budgets alone do not stretch far enough to cover the scale and diversity of the challenges we are facing.

Private capital mobilization is crucial to addressing this gap. Given the cumulative impact of intertwined global crises, a step change in both public and private financing is needed.

The World Bank is doing the work to remove constraints blocking private sector investment:

• We support policy reforms that enhance market transparency and efficiency.
• We work with clients to establish the institutional frameworks and capacity needed at the country level to bring infrastructure projects to fruition, such as through PPPs. 
• We develop innovative financing arrangements that combine concessional finance, grants, blended finance, and risk mitigation instruments – such as guarantees – to help get projects off the ground.
• We create bankable project pipelines that make it possible for private sector financiers to get involved.

Last Updated: Mar 25, 2024

The World Bank assists client countries in addressing the rising demand for infrastructure through various levels of intervention. Our work encompasses several areas:

Capacity Building

We help governments build the capacity, institutions, and ecosystems for fiscally sustainable and efficient public-private partnerships (PPPs). Our support is designed to enable client governments to institute key policy reforms that can open markets and strengthen the viability of private investment in infrastructure sectors.

To achieve this, we offer best-in-class knowledge platforms focusing on PPPs. These include:

• The Public-Private Infrastructure Advisory Facility (PPIAF) helps governments strengthen policies, regulations, and institutions that enable sustainable infrastructure with private-sector participation. It promotes knowledge-transfer by capturing lessons while funding research and tools; builds capacity to scale infrastructure delivery; and assists sub-national entities in accessing financing without sovereign guarantees.
• PPP Legal Resource Center 
  Designed for government officials, project managers and lawyers involved in PPP projects in developing countries, the PPPLRC provides international experience and precedents to help develop a conducive PPP enabling environment, a solid pipeline of projects and structure well PPP project and contracts.
• Benchmarking Infrastructure Development 
  This report series and database assesses the quality of regulatory frameworks worldwide to develop large infrastructure projects, benchmarking them with internationally recognized good practices.
• CP3P Certification Program
  Created with other multilateral development bank partners, PPIAF, and APMG, this program aims to build a unified capacity and ensuring global good practices among practitioners.
• Private Participation in Infrastructure Database 
  With data on over 100,000 projects dating back to 1984, the PPI Database is a comprehensive source for information on how private investment is used in infrastructure projects in developing countries.

Project Development

Another way we support our client governments is by dedicating more resources and support to project preparation and technical assistance facilities. 

The Global Infrastructure Facility—a G20-WBG initiative – is crucial on this front. It provides comprehensive project preparation support through its 10 MDB technical partners to client governments. With an exclusive focus on mobilizing private capital for sustainable infrastructure, the GIF has approved more than 145 activities in 66 countries, with 17 GIF-supported projects having reached commercial and/or financial close, mobilizing $7.4 billion in private capital.

De-Risking and Innovative Financing

The World Bank has a unique role to explore innovative ways to finance infrastructure investment. Our work combines guarantees, risk-mitigation instruments, PPPs, and blended finance with additional concessional capital provided by MDBs and DFIs to drive more investment in infrastructure.

Over the past twenty years, our guarantees program has mobilized more than $42 billion in commercial capital and private investments, including energy, transport solutions, sovereign and corporate financings for governments and state-owned enterprises—as well as innovative trade financing solutions and unique support to fragile countries.

Ensuring Quality

In the current fiscal environment, we must make every dollar go as far as possible. Bridges, power systems and transportation networks built today must last for years to come. They must be financially viable; and they must maximize their economic, social, environmental, and development impact.

We emphasize this approach through our Quality Infrastructure Investment (QII) partnership with Japan. Additional resources are needed to mainstream the partnership’s core principles of resilience, inclusion, and climate impact to ensure such considerations are built into infrastructure projects at the earliest stage to improve economic efficiency and generate other benefits.

The World Bank also contributes to the G20 initiatives such as the Infrastructure Working Group, Partnership for Global Infrastructure Investment and others. 

Last Updated: Sep 20, 2023

Building Stronger Institutions to Mobilize Private Capital in Infrastructure—with notable results

With over 20 years of experience, the World Bank supported Public Private Infrastructure Advisory Facility (PPIAF) is the only global facility dedicated to strengthening institutions to realize sustainable infrastructure with private participation. Since its inception, PPIAF has funded 1,700 activities in over 100 countries and helped facilitate Public-Private Partnerships (PPPs) that have attracted $27 billion in private investment in infrastructure.

In 2018, PPIAF established the PPP Institutions Building Program (the Program) that capitalizes on this experience. The Program successfully implemented PPP institution-building activities that enhanced the capacity of government officials across the globe and catalyzed the adoption of PPP laws, regulations, and guidelines. Program results include the development of strong PPP pipelines in Ethiopia, Kenya, Lesotho, Peru, Senegal, and Tanzania. In Kenya, the Program supported the development of a PPP Directorate that developed a strong PPP pipeline that is expected to mobilize $1.25 billion in private capital in the transport, energy, education, and agriculture sectors.

Lighting Up Streets- Brazil

More than 5,000 municipalities in Brazil rely on outdated, inefficient, high-pressure sodium and mercury vapor lamps for lighting streets. When combined with “smart” management and control systems, LED technology for public street lighting can deliver energy savings of up to 80 percent. However, many municipalities struggle to access financing to upgrade their streetlights.

In partnership with the World Bank Group, the Global Infrastructure Facility (GIF) supported CAIXA, one of Brazil’s public banks, to structure and procure a set of public street lighting modernization PPPs in 10 Brazilian municipalities.

As of 2022, five municipalities had started using the LED technology. Ten upcoming pilot transactions will reduce emissions by about 21,563 tons of CO2 per year and provide a model for a future program of investments, expected to increase reductions up to an annual total of 565,556 tons. This will contribute to one-fifth of Brazil’s Paris Agreement target to improve energy efficiency in electricity by 10 percent by 2030.

Supporting West Africa’s first PPP Framework- ECOWAS

Governments in the Economic Community of West African States (ECOWAS) - Benin, Burkina Faso, Cabo Verde, Côte d’Ivoire, Gambia, Ghana, Guinea, Guinea Bissau, Mali, Liberia, Niger, Nigeria, Senegal, Sierra Leone, and Togo - are looking for a regional solution to infrastructure development.

ECOWAS’ regional infrastructure masterplan comprises 201 projects in connectivity, digital development, energy (including renewable energy), and transport from 2020 to 2045 with an estimated investment requirement of $122 billion. With Public - Private Infrastructure Advisory Facility (PPIAF) support, ECOWAS successfully developed a comprehensive PPP framework. This is a critical step towards establishing a conducive and investor-friendly environment and closing a substantial regional infrastructure gap estimated to be between $20 billion and $36 billion annually.

The Parliament approved resolutions on regional PPPs and associated guidelines in December 2021. Once in place, the new regional framework will facilitate delivering regional infrastructure and public services in the ECOWAS region. 

Improving Urban Mobility in Abidjan, Côte d’Ivoire 

With the support of the World Bank and the Global Infrastructure Facility, the government of Côte d’Ivoire is building a Bus Rapid Transit (BRT) system aligned with the country’s 2016-2020 National Development Plan and Greater Abidjan Urban Master Plan.

The BRT is part of the World Bank’s broader $400 million Greater Abidjan Port City Integration project, one of the largest public transport PPPs in Côte d’Ivoire and among the first BRT systems in West Africa. It is expected to mobilize $130 million from the private sector.

The 20-kilometer BRT will transform the public transport system along the Yopougon-Bingerville corridor and its feeder lines in Abidjan. It will reduce travel time and increase access to jobs from low-income, outlying areas into the Abidjan city-center, with an estimated 600,000 additional jobs becoming more accessible. The BRT system will also encourage safe and equitable access and promote employment opportunities for women in its operations. Importantly, it will use climate-friendly technology.

Boosting PPPs - Pakistan

The World Bank is collaborating with Pakistan’s PPP Authority (P3A) to advance private sector investment. With PPIAF support, three projects have been selected by the P3A for accelerated development: training on PPP pipeline screening, fiscal commitment and contingency frameworks, and climate considerations to build the capacity of the P3A. A follow-up activity is being planned, in partnership with the Global Infrastructure Facility (GIF), to further develop the multi-window financing vehicle, expand the PPP pipeline to include social infrastructure projects, and provide additional capacity building support.

Last Updated: Sep 20, 2023