Post on 24-Dec-2015
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INFRA Platform in Action
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Outline
Countercyclical Stimulus SupportCountercyclical Stimulus Support
Development Policy OperationsDevelopment Policy Operations
Donor HarmonizationDonor Harmonization
INFRA DiagnosticsINFRA Diagnostics
Innovative InstrumentsInnovative Instruments
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Countercyclical Stimulus
Stimulus packages with significant infrastructure component have been used in response to the Global Financial Crisis
• Effective tool to create jobs and provide the foundation for economic recovery• Transformational opportunity to invest in “green” Infrastructure
Under INFRA, the Bank has helped client countries by providing more than $20 billion for infrastructure sectors
• This represents 29% increase from FY2008 and 66% increase from FY2007.
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Impact of Crisis WBG Response
Bank helped countries in the region prioritize infrastructure investments by approving $3.1 billion of infrastructure lending in FY09. Stimulus plans of China, Vietnam, Indonesia supported.
Africa largely shielded from the initial impacts; falling commodity
prices, reduced private flows and a shrinking fiscal space created difficult environment for infrastructure investments in Africa
WB approved $4.9 billion for infrastructure sectors in the region in FY2009 including $2.1 billion Kazakhstan South West Roads Project
Bank has supported governments in the region by committing $2.9 billion for infrastructure in FY09, including $450 million loan for Third Sustainable Development DPL
WB infrastructure lending increased from $2.5billion in FY2008 to $3.6 billion in FY2009
East Asia and Pacific Better prepared for the crisis due to structural and institutional
reforms undertaken following Asian Crisis; many countries adopted stimulus packages with significant infrastructure component.
Eastern Europe and Central Asia experienced a ‘sudden stop’ in capital inflows; unable to
implement countercyclical macroeconomic policies
Latin America Countries relying greatly on infrastructure stimulus
packages to respond to the crisis
SIAP Progress
Middle East and North Africa Countries face lower oil revenues, tourism revenues,
remittances, and foreign direct investment as a result of the global crisis--all of which is likely to weaken economic performance
Bank committed $1.3 billion for infrastructure sectors in the region in FY2009, including $600 million for the Egypt Ain Sokhna Power Project
South Asia Tightening of credit markets as seen in portfolio
outflows, decline in external commercial borrowing, and an increase in credit spreads. This has created difficult conditions for undertaking large infrastructure investments
the Bank approved $1.9 billion for infrastructure in the region in FY2009, including $149 million for the Dhaka Water Supply and Sanitation Project. Stimulus support in India.
Countercyclical StimulusWBG Actions in the Regions
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SIAP Progress
Countercyclical StimulusProjects
China NanGuang Railway Project
•$300 million in Bank Financing approved in June 2009•To provide additional transport capacity and reduce transport time between the less developed western region of southwest China and the relatively more developed Pearl River Delta region.•Project will generate significant and continuing long term benefits and is also capable of rapid implementation.•One of the first projects implemented as part of stimulus package announced by the government in response to the global financial crisis.
Peru Safe and Sustainable
Transport Project•$150 million project approved in January 2010•Will improve passenger and freight transport conditions in an efficient and safe manner along national road corridors that are essential to Peru’s competitiveness•Project will improve the design o f the Government’s $3 billion stimulus package (two thirds of which is infrastructure) and help finance its implementation.•Project will generate employment opportunities for the poor,
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Outline
Countercyclical Stimulus SupportCountercyclical Stimulus Support
Development Policy OperationsDevelopment Policy Operations
Donor HarmonizationDonor Harmonization
INFRA DiagnosticsINFRA Diagnostics
Innovative InstrumentsInnovative Instruments
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Development Policy OperationsDevelopment Policy operations provide untied, direct budget support to governments for policy and institutional reforms aimed at achieving a set of specific results in the infrastructure sectors.
• At a time when the access to financial market was restricted• Have been instrumental in helping client countries preserve infrastructure spending• In parallel, cutting-edge expertise and policy advice have been provided to help middle-income
countries design and implement policy and institutional reforms for addressing the direct and indirect impact of the crisis
Lending for DPOs with infrastructure increased by more than two-fold from FY2008 to FY2009 while the number of DPOs increased by 23%
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Policy Matrix Provisions/Triggers for Infrastructure Sectors
• Access to modern, affordable and cleaner energy services;• Magnitude of transmission and distribution losses (both technical and
commercial losses);• Consumer energy tariffs towards being more cost-reflective, decrease in
subsidies or cross-subsidies, etc.• Share of renewable energy and energy efficiency/demand side
management projects and programs, including cogeneration;
Energy
• Introduction of competition for provision of transport services; • Open market access for transport services providers without
administrative restrictions on corporate ownership; • Provisions to distinguish public service obligations from regular
commercial activities and compensate them accordingly.
Transport
Water
•Number of service providers that are joint stock companies •Consumer tariff levels as % of properly accounted operating costs or maintenance budget as % of revenues.•Collection rates.•Number of service providers that have technically audited performance indicators and/or financially audited financial statements.•Transparency indicators, such as tariffs or other information made available to the public via publications in the mass-media; publication of annual report.
Development Policy Operations
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- $1.5 billion single tranche DPL approved in September 2009
-Supports stimulus of the economy while strengthening the
framework for long-term sustainable growth- The DPL aims to:
1. Implement a verifiable, targeted and cross-sectoral strategy for emission Program reductions;
2. Establish institutions, regulations and monitoring capacity to allow for the reduction of emissions in urban transport, energy' generation and
efficiency; and3. Institutionalize the appropriate financing mechanisms to allow for
the reduction of emissions in, urban transport, energy generation.
Indonesia Third Infrastructure DPL Mexico Framework for Green Growth
Development Policy OperationsExamples
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Outline
Countercyclical Stimulus SupportCountercyclical Stimulus Support
Development Policy OperationsDevelopment Policy Operations
Donor HarmonizationDonor Harmonization
INFRA DiagnosticsINFRA Diagnostics
Innovative InstrumentsInnovative Instruments
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Donor Harmonization
• Provides Platform for Development Partners to Work Together
More than 20 development partners participated in the INFRA Partners Forum in June 2009 and agreed to find ways to work together in support of critical infrastructure initiatives
• Projects of interest were discussed• Project pipelines were shared
Donor Harmonization
Kazakhstan South-West Roads Project
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EBRD,0.2bn
Asian Dev. Bank &
JICA, 0.9bn
Islamic Dev. Bank
0.5bn
IBRD, 2.5bn
Gov. of Kazakhsta
n 1.9bn
Guiding Principles: Synchronized parallel financing for
corridor; Uniform technical standards; Common framework for
environmental and social safeguards; and
Technical assistance and institutional strengthening to complement investments.
Coordinated Project Preparation: ADB took lead on social, land acquisition,
and economic analysis WB took lead on environmental analysis
and safeguards
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Donor Harmonization
Ethiopia Protection of Basic Services(PBS) Program Project Figure 1: Ethiopia PBS - II Donor Contributions and Project Components ($ billion)
- Project to expand access and improve the quality of basic services in education, health, agriculture, water supply and sanitation, and rural roads in Ethiopia
- Being jointly implemented by the World Bank and twelve other partners - African Development Bank, Austria, Canadian International Development Agency, Department for International Development, European Commission, Irish Aid, Italy, KfW, Netherlands, Spain, and Japan.
- World Bank’s IDA financing of $540 million is being supplemented by at least $0.8 billion from other development partners, for overall donor financing of $1.3 billion.
- Development partners will undertake joint missions and follow-up; conduct joint Program performance assessments; and align their disbursements to the Government’s budget cycle as much as possible.
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Donor Harmonization
Arab and Islamic Funds
Arab World Initiative
• Appreciation for Arab World Initiative (AWI) announced by the Bank President and continued interest in partnering with the World Bank to move the Arab World Initiative forward.
Energy for the Poor Initiative.
• A key area of focus for the OPEC Fund for International Development (OFID) and the Saudi Fund.
• Includes: (i) collaboration through co or parallel investment in energy projects and (ii) establishment of a dedicated fund to drive specific energy related studies, pre-investments and other strategic initiatives.
• Up to $3 billion in funds to be leveraged from OFID, Saudi Fund and IDB
Regional Initiatives.
• MENA regional CSP and cross-border transmission (IDB, SFD, Kuwait Fund, OFID, Abu Dhabi Fund for Development, Arab Fund) as well as Cross Border Transport and Trade Facilitation
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Donor Harmonization
Arab and Islamic Funds
Initial interest expressed in collaboration in some 14 projects across Africa with preliminary commitments made totaling well over $200 million
Congo Inga III Hydropower Station ($8000 million)
East Africa Transport Link ($600 million)
Tanzania Energy Development and Access Expansion Project ($135 million)
Senegal Sustainable and Participatory Energy Management Project ($20 million)
Cameroon Lom Pangar Hydropower Project ($430 million)
Mozambique Regional Transmission Backbone ($90 million)
Ethiopia Gibe III Hydropower Station ($700 million)
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Outline
Countercyclical Stimulus SupportCountercyclical Stimulus Support
Development Policy OperationsDevelopment Policy Operations
Donor HarmonizationDonor Harmonization
INFRA DiagnosticsINFRA Diagnostics
Innovative InstrumentsInnovative Instruments
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Innovative Instruments
Direct Finance
•Development Policy Operations•Additional financing•Guarantees•Sub-national financing•IBRD enclave financing in IDA countries•Risk management products for IBRD countries
Parallel Finance
•Financing from different bilaterals and IFIs for infrastructure projects
INFRA is using the full range of WBG instruments
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Innovative InstrumentProjects
-Project involves use of Clean Technology Fund
(CTF) - Under the project, $500 million of IBRD financing and $100 million of CTF
financing will be provided to two Turkish private
sector banks - These Bank will provide
financing to support (a) renewable energy sources through the
acceleration of small hydro, wind energy and
geothermal projects, and through support for the use
of emerging renewable technologies such as solar
and biomass(b) supporting the
development of energy efficiency investments.
- Project involves use of Deferred Drawdown Option
(DDO)
- The operation provides $100 million to help the government weather the current global economic
turbulence without jeopardizing successful reform implementation.
- Reforms supported by operation include parastatal reform action plans, by the
Central Water Authority, Wastewater Management
Authority, Central Electricity Board, and Sugar Planters
Mechanical Pool Corporation, to improve
operational efficiency and service delivery.
- Project involves the use of Guarantees
- $242 million partial credit guarantee and $136 million
IBRD loan
- The project consists of (1) a 600 MW coal-fired power station, related transmission
lines, substation, and backup water supply
system, (2) low-carbon strategy and alternative
energy projects preparation, and (3) institutional and
capacity building technical assistance to the
Government
Turkey Renewable Energy and Energy Efficiency
Botswana Morulpule B Generation and Transmission
Mauritius Trade and Competitiveness DPL DDO
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Outline
Countercyclical Stimulus SupportCountercyclical Stimulus Support
Development Policy OperationsDevelopment Policy Operations
Donor HarmonizationDonor Harmonization
INFRA DiagnosticsINFRA Diagnostics
Innovative InstrumentsInnovative Instruments
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How can countries absorb
fiscal stimulus resources and
within what sectors?
Fiscal and financial
constraints assessment
Infrastructure needs and
spending assessments
Policy, regulatory framework
assessment
What are the
key sub-
sector and
program/proje
ct entry points
for INFRA support
?
Detailed sub-
sector analyses
Sub-sector Portfolio
Performance Reviews
1. Strategic Country Reviews 2. Infrastructure Portfolio Assessments
INFRA Diagnostics Diagnostic Tools and Guidance Notes
A. Diagnostic Tools
Region Country Sector Status
East Asia and Pacific Indonesia, Philippines, Vietnam
Power Complete
Indonesia, Philippines, Vietnam
Transport, Water and Sanitation
Ongoing
Mongolia All Infrastructure Ongoing
Eastern Europe and Central Asia
Armenia, Romania, Ukraine, Kyrgyz Republic
Power Ongoing
Latin America and Caribbean
Peru All Infrastructure Complete
Colombia, Jamaica, Mexico, Peru
Power Ongoing
Middle East and North Africa
Tunisia, Egypt, Jordon, Morocco
Power Complete
South Asia Bangladesh, India Power Ongoing; India Pending GOI approval.
INFRA DiagnosticsStatus of Diagnostics
Vietnam • Large financing gaps
in infrastructure sectors, ranging from US$200 m a year in water & sanitation to US$1 billion a year in expressways
• Challenges in raising finance; GOV plans to access local bond markets but has received very little response
Philippines • Indication of lags
between planned and actual infrastructure spending, with low disbursements expected from principal infrastructure agencies
• Tightening of credit with foreign banks unwilling to participate at levels above US$100 million. There has been flight to quality and cost of capital has increased.
Indonesia • The national energy utility,
PLN, is facing a funding gap of US$ 5 bn; its debt capacity has been impacted by the 17% depreciation of the IDR vs. the US$
• Of the 62 IPPs representing 8,658 MW of capacity, 31 projects in preparation are still trying to reach financial close
INFRA DiagnosticsResults of Diagnostics