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Developing international corridors across Africa, Asia and the Middle-East, lessons learnt from IDB experience

Dr. Walid Abdelwahab, Director

Infrastructure Department

Snapshot of IDB Group

Transport sector portfolio

Why finance international corridors?

7 best practices in corridor development from

IDB experience

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Outline

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Projects $ 42.02 billion (49.52%)

Trade financing $ 42.43 billion

(50.00%)

Technical assis-tance $ 0.41 bil-

lion (0.48%)

Cumulative IDBG financing 1396H-1433H in US$

Snapshot of IDB Group - Overview

1975 1981 1994 1999 2008

Energy, 36%

Transport & Coms; 31%

Industry, 12%

Agricul-ture, 11% Social, 6%

Other, 4%

Sector distribution of IDB project financing

US$ 84.9 billion total approvals since inception

Transport is a priority for IDB

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IDBG Initiatives for developing trade and transport across regions

1) Financing of critical transport infrastructure

Africa28.65%

Arab world24.11%

Asia46.89%

Other0.35%

Geographic distribution of (total approvals in US$)

Africa52%

Arab world23%

Asia24%

Other2%

Geographic Distribution (Number of projects)

Total Operations : 393

Total Operations : 57

51% of total in last 5 years

Total Financing : ID 4.42 Bn

Total 1429-34H: ID 2.27 Bn

Transport Scorecard

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200

400

600

800

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Annual IDB Approvals in the transport sector (USD million)

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Snapshot of IDB Group – Strategic focus on regional integration

Mid-term business strategy

Reform IDB

Alleviate Poverty

Promote Health

Universalize Education

Prosper the people

Empower the Sisters of Islam without breaching the tenets of Islam

Expand the Islamic Financial Industry

Facilitate Integration of IDB Member Country Economies Among Themselves and with the World

Improve the Image of the Muslim World

The strategic thrust of the IDB Vision 2020 is to support and promote greater economic cooperation and integration at regional level.

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Transport sector portfolio – Global initiatives

Source: A study of international transport corridors in OIC member countries, IDB, 2011

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Our focus on international corridors

Trans-Saharan Highway

SEETO CorridorCAREC

Corridors

Silk Road

Machreq Corridors

Prioritization criteria for international transport corridors

Involvement of OIC Member States Intra Regional Trade Potential Inter Regional Trade Potential Presence of Missing Links Importance of Non-Physical Barriers

Distance from Ports Connections with Capital Cities Connection Between Locations of

Economic Importance Transport costs along the corridor

Some Ongoing Projects across IDB constituency

7 best practices in corridor development from IDB experience

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Adopt a programmatic approach(i)

Build a strong case before resource mobilization(ii)

Set up an independent governance body(iii)

Consider alternative routes(iv)

Align multi-year country development plans(v)

Coordinate donor support through roundtables and joint preparation(vi)

Address physical and non-physical barriers to trade(vii)

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Adopt a programmatic approach(i)

7 best practices in corridor development from IDB experience

Programmatic approach helps ensure:

Strategic consistency Sustainability of the initiative Long term donor support Staged implementation Adaptation to country context and

national priorities

Ex) The CAREC corridors

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Build a strong case before resource mobilization(ii)

7 best practices in corridor development from IDB experience

Raise the profile of the program

through communication (events) and demonstration projects

Prepare comprehensive Feasibility study

Develop Bankable proposals (investment-ready)

Explore PPP opportunities

Ex) The Silk Road, linking Europe to Asia through trade

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Set up an independent governance body(iii)

7 best practices in corridor development from IDB experience

International corridor developments are multi-country multi-stakeholders initiatives, need to institutionalize through set-up of sound governance arrangements such as Steering Committee or Corridor Observatories

• Composed of Director of Roads from the 6 participating countries (Algeria, Chad, Mali, Niger, Nigeria and Tunisia)

• Set-up in 1966

• In charge of studying and implementing the program

• Bi-Annual coordination Meetings • Coordination of donor support and

roundtables

• Execute country programs while ensuring consistency across countries

• Platform for knowledge exchange and capacity building

The Trans-Saharan Liaison Committee

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Consider alternative routes(iv)

7 best practices in corridor development from IDB experience

For each corridor need to define the alternative routes composing the corridor and develop economic feasibility and preliminary studies at network and route level.

Ex) The South-East Europe Transport Observatory (SEETO) Comprehensive Network Road

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Align multi-year country development plans(v)

7 best practices in corridor development from IDB experience

A corridor is only as strong as its weakest link !

Need to ensure continuity of cross-border investments to address missing links in sequence.

Ex) Trans-African Highways

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Coordinate donor support through roundtables and joint preparation(vi)

7 best practices in corridor development from IDB experience

The coordination of donors is critical to ensure financial closure of major corridor projects. Donor roundtables or joint preparation missions are an efficient way to attract maximum donor support.

Ex) The Coordination Group of Arab donors, coordinating responses in the transport sector for more than three decades

Ex2) Machreq corridors and CAREC corridors co-financed with other MDBs

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Address physical and non-physical barriers to trade(vii)

7 best practices in corridor development from IDB experience

Border waiting times account for up to 48% of journey time across international corridors in the Arab region! (Source: AULT/IRU/IDB Project)

If non-physical barriers to trade are not tackled properly the impact of cross-border transport corridor projects is very limited

Ex) Barriers to trade in West Africa

Time –Distance (Blue) and Cost – Distance (Green) graphs for selected Arab corridors (Qatar-KSA-Egypt, Jordan-KSA-Kuwait)

Source: AULT/IRU/IDB project

لكم شكرا

Thank you

Walid Abdelwahabwabdelwahab@isdb.org

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