The World Bank is teaming with private investors on a new financing venture that seeks to raise billions of dollars to help meet developing countries' huge infrastructure needs.
The new public-private Global Infrastructure Facility (GIF), launched on Oct. 9 at the bank’s annual meeting in Washington, D.C., aims to provide some of the estimated additional $1 trillion needed annually to address future infrastructure needs in developing nations through 2020.
World Bank Group President Jim Yong Kim said the GIF seeks to assist public-private infrastructure projects that no individual institution could finance on its own.
Speaking at a ceremony at the bank to launch the GIF, Kim said the program will commence even as private infrastructure investment in developing countries and emerging markets has declined, to $150 billion in 2013 from $186 billion in the previous year.
The bank has not said how large the GIF will be, and many details of how the program will operate remain to be worked out.
But Kim said, "We are very ambitious. We want to attract billions of dollars in new investment to developing-country infrastructure."
He added, "We are also pragmatic and determined to get it right." (View video of GIF launch ceremony and speeches here.)
Bertrand Badré, World Bank Group managing director and chief financial officer, said in a statement that the GIF would start a pilot phase later this year to “road-test” ways to launch public-private projects in low- and middle-income countries.
Badré told ENR in an interview that GIF's pilot stage would look at four or five medium-sized and four or five large projects. He declined to specify the precise project sizes, noting, "It's pretty early days."
Badré did say the projects to be considered in the pilot phase would be larger than "the dozens of millions" but smaller than "billions."
He added, "The idea is to have a diversity of geographies and sectors and a diversity of size. ... We want to enter complex projects, where, basically, we are putting our strengths together [so that] we make a difference."
Asked what a complex project would entail, he said, "It's a project where, basically, you have a mix of financing constraints, regulatory constraints, locational constraints [and] a regional dimension."
Jordan Z. Schwartz, the World Bank's GIF chief, said in an interview that the program aims "to build a deeper pipeline" of projects "that have demonstrable development impact [and] are either ... trade-enabling or climate-friendly."