Sustainable Infrastructure Finance

• Private Participation in Infrastructure

Infrastructure enables quality of life in every economy by creating jobs, enabling access to healthcare and education, and connecting markets and consumers.

Public budgets and support from multilateral development banks are not sufficient to eliminate poverty on a livable planet. Partnership between governments, philanthropies, donors and the private sector is necessary to ensure basic services for the millions of households left behind.

The World Bank Group is responding to the global call to scale up future-fit resilient quality infrastructure investment needed to accomplish our mission. We leverage the full suite of WB/IFC/MIGA financing instruments to facilitate private sector investment in sustainable quality infrastructure.

• The infrastructure gap is significant: 666 million people have no access to electricity, 2.1 billion lack drinking water, 3.4 billion lack safe sanitation, 1 billion live more than 2 kilometers from an all-season road, and a third of the global population—2.6 billion people—remain digitally unconnected.
• The cost of financing these gaps is colossal – annually about 4.5% of the GDP of low- and middle- income countries, or around $1.5 trillion annually.
• Private capital mobilization is crucial to addressing this gap.  Countries must optimize scarce public finance and spending in ways that generate more participation from the private sector. Multilaterals—like the World Bank—can help.

The World Bank Group 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 180 activities in 70 countries, with 29 GIF-supported projects having reached commercial and/or financial close, mobilizing $17.8 billion in private capital at commercial close.

De-Risking and Innovative Financing

The World Bank has a unique role to explore innovative ways to finance infrastructure investment. Our work combines risk-mitigation instruments, PPPs, and blended finance with additional concessional capital provided by MDBs and DFIs to drive more investment in infrastructure. Collaboration with MIGA gives client countries access to our streamlined Guarantee Platform, which brings 20 different guarantee solutions under one roof.

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.

The World Bank Group is doing the work to remove constraints blocking private sector investment and promote good business policies and governance:

• 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.

The World Bank Group hosts three donor-funded partnerships whose work underlies these massive efforts: The Public-Private Infrastructure Advisory Facility (PPIAF) strengthens policies, regulations, and institutions that enable private sector participation in infrastructure projects; the Global Infrastructure Facility (GIF) helps client countries build sustainable, quality infrastructure pipelines; and the Quality Infrastructure Investment (QII) Partnership provides support for incorporating quality principles that provide the foundation for achieving sustainable, resilient, and inclusive infrastructure.

Example projects:

• Bus Rapid Transit in Dakar, Senegal.  The World Bank is supporting a Bus Rapid Transit system (BRT) that will radically improve urban mobility across the Dakar metropolitan area. The system was officially inaugurated in January 2024, with regular passenger service expected to start later this year. Once fully operational, the new BRT will serve 300,000 commuters per day, cut the transit time in half, improve road safety and reduce local air pollution by shifting traffic from private cars to buses.  The BRT is expected to make 170,000 jobs newly accessible, and 595 of all job opportunities in Dakar will be reachable in an hour or less.  The Dakar BRT benefited from support from two World Bank partnerships, the Public-Private Infrastructure Advisory Facility (PPIAF) and the Global Infrastructure Facility (GIF), as well as IFC, MIGA, the European Investment Bank, the government, and the private sector.
• 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.