Infrastructure Recovery and Assets Platform (INFRA) Sustainable … · 2016. 7. 19. · O&M...

World Bank Group

Progress Report

Fiscal Year 2009

Infrastructure Recovery and Assets Platform

(INFRA)

Sustainable Infrastructure Action Plan

(SIAP)

December 2009

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INFRA-SIAP Progress Report

i

The Infrastructure Recovery and Assets Platform - Sustainable Infrastructure Action Plan Progress Report was prepared by a

World Bank Group team led by Fernando Navarro and Catherine Revels (ETW) and supported by Jaehyang So, Nitin Jain

(ETWWP), Blake Driscoll (ETW), and Bipulendu Narayan Singh (ETWES), under the overall guidance of Jamal Saghir (ETW).

Input was provided by SDN regional and anchor teams, IFC, MIGA, OPCS, DA-IFC Secretariat , Treasury, PPIAF, ESMAP,

GPOBA and GFDRR.


ii

World Bank Group Infrastructure Recovery and Assets Platform -

Sustainable Infrastructure Action Plan Progress Report

CONTENTS

Contents ......................................................................................................................................... ii

Abbreviations And Acronyms .................................................................................................... iv

I. Executive Summary ...........................................................................................................1 A. Addressing the Access Gap Through Core Sector Strategies ..................................1 B. Maximizing Effectiveness Through Cross-Sectoral Themes ..................................2

C. Mainstreaming Sustainability as a Core Dimension of Infrastructure .....................3 D. Scaling-up World Bank Group Direct and Leveraged Financing ............................4

E. Going Forward .........................................................................................................5

F. Structure of the Report .............................................................................................6

II. Implementation Progress: Sustainable Infrastructure Action Plan, Infrastructure

Recovery and Assets Platform and the Infrastructure Crisis Facility ......................................7 A. Introduction ..............................................................................................................7

B. Addressing the Access Gap Through Core Sector Strategies ..................................8 1. Transport ..................................................................................................................9

2. Water ......................................................................................................................10 3. Energy ....................................................................................................................13 4. Information and Communications Technology .....................................................15

5. Crisis Response to preserve the access agenda ......................................................15

C. Maximizing Effectiveness Through Cross-Sectoral Themes ................................18 1. Climate Change Mitigation and Adaptation ..........................................................18 2. Public-Private Partnerships ....................................................................................21

3. Incorporating the Spatial Dimension of Development ..........................................24 4. Urban and Local Government ................................................................................27

D. Mainstreaming Sustainability as a Core Dimension of Infrastructure ...................29

1. Environment: Build on IAP experience to mainstream environmental issues ......29 2. Social......................................................................................................................31

3. Governance ............................................................................................................32 E. Leverage Finance ...................................................................................................34 1. Public and private financing leverage through WBG financing ............................34

2. Donor Financing ....................................................................................................35 3. Harmonization among Donors ...............................................................................36

III. Improved Responsiveness to Client and Stakeholder Demands..................................38 1. SDN Integration .....................................................................................................38 2. Mainstreaming joint WBG work ...........................................................................38 3. Reducing non-financial costs of doing business ....................................................40 4. Enhancing Monitoring of WBG Contributions to Sustainable Development in

Infrastructure ..........................................................................................................41


iii

Annex A: SIAP Action Matrix ....................................................................................................44

Annex B: Highlights of Recent World Bank Group Projects and Advisory Services ..........51


iv

ABBREVIATIONS AND ACRONYMS

AAA Analytical and Advisory Activities

ADB Asian Development Bank

AFD Agence Française de Développement

AfDB African Development Bank

CAS Country Assistance Strategy

CEIF Clean Energy Investment Framework

CIF Climate Investment Funds

CTF Clean Technology Fund

DAC Development Assistance Committee

EAP East Asia and Pacific Region

ECA Europe and Central Asia Region

ECTEL Eastern Caribbean Telecommunications Regulator

ESMAP Energy Sector Management Assistance Program

EU European Union

FIs Financial Intermediaries

FY Fiscal Year

GAP Gender Action Plan

GDP Gross Domestic Product

GEF Global Environment Facility

GeoFund WB Geothermal Energy Fund

GFCRP Global Food Crisis Response Program

GFDRR Global Facility for Disaster Reduction and Recovery

GGFR Global Gas Flaring Reduction Partnership

GHG Green-House Gas

GICT Global Information, Communications and Technology

GPOBA Global Partnership for Output-Based Aid

GPP Global Program and Partnership

IAP Infrastructure Action Plan

IBRD International Bank for Reconstruction and Development

ICT Information and Communication Technologies

ICR Implementation Completion and Results Report

IDA International Development Association

IDA-14 14th

replenishment of IDA

IDA-15 15th

replenishment of IDA

IEA International Energy Agency

IEG Independent Evaluation Group

IFC International Finance Corporation

IFI International Financial Institutions

IPCC Intergovernmental Panel on Climate Change

IPP Independent Power Producer

ISR Implementation Status and Results

LCR Latin America and Caribbean Region

LIC Low-Income Country

LNG Liquid Natural Gas

MDB Multilateral Development Bank

MDG Millennium Development Goal

MIC Middle-Income Country

MIGA Multilateral Investments Guarantee Agency

MNA Middle East and North Africa Region

NEPAD New Partnership for Africa‘s Development

O&M Operation and Maintenance

OBA Output-Based Aid

ODA Official Development Assistance

OECD Organization for Economic Co-operation and Development

OPCS Operations Policy and Country Services

PPIAF Public Private Infrastructure Advisory Facility

PPP Public-Private Partnership

PRSP Poverty Reduction Strategy Paper

QAG Quality Assurance Group

RAI Rural Access Index

SAR South Asia Region

SDLP Sustainable Development Leadership Program

SDN Sustainable Development Network

SEE South East Europe

SF Special Financing

SFCCD Strategic Framework for Climate Change and Development

SIAP Sustainable Infrastructure Action Plan

SSA Sub-Saharan Africa Region

SSIU Sector Strategy Implementation Update

SWAPs Sector Wide Approaches

TF Trust Fund

TFESSD

Trust Fund for Environmental and Social Sustainable Development

TRE WB Treasury Department

UN United Nations

UNFCCC UN Framework Convention on Climate Change

WB World Bank (IBRD/IDA)

DECDG Development Economics Data Group

WBG World Bank Group

WDR World Development Report

WSS Water Supply and Sanitation


1

World Bank Group Infrastructure Recovery and Assets Platform -

Sustainable Infrastructure Action Plan Progress Report

I. EXECUTIVE SUMMARY

1. The World Bank Group (WBG) Sustainable Infrastructure Action Plan (SIAP), discussed

at the Board of Directors in July 2008, outlined infrastructure funding guidelines for FY09-11,

and supported a renewed commitment to client countries to improve the reach and quality of

sustainable infrastructure service delivery. SIAP identified four core activities to be

implemented by all three WBG institutions from FY09-11: (i) addressing the core access agenda

for development; (ii) strengthening cross-sectoral linkages; (iii) mainstreaming sustainability as a

core dimension of infrastructure; and (iv) scaling up WBG infrastructure support and leverage.

2. In response to the deepening global financial and economic crisis, and building on the

SIAP, the Infrastructure Recovery and Assets (INFRA) Platform and the Infrastructure Crisis

Facility (ICF) were launched in April 2009 under the broader Vulnerability Framework. Two

significant developments occurred under INFRA: a) expanded targets for WBG‘s own

institutions; and perhaps more importantly, b) increased focus on more effective collaboration

among development partners to meet the critical gaps for basic service delivery in the poorest

countries. While INFRA and the ICF reoriented the WBG‘s short and medium term

infrastructure goals, the original framework developed under SIAP has continued to guide the

WBG‘s infrastructure action plan.

3. This Progress Report provides an update on the progress on the SIAP and achievements

since the launch of the INFRA Platform and the ICF.

A. Addressing the Access Gap Through Core Sector Strategies

4. The core infrastructure access agenda remained a primary focus for the institution to

meet the needs of WBG clients, emphasizing the strengthening of sectoral policies and

institutions to improve the efficiency, affordability, quality, and reach of basic services. Ensuring that the basic access needs of the population are met and building links to economic

recovery was a priority during the past 18 months of SIAP implementation. To prevent reversal

of progress on the core access agenda, under INFRA the Bank introduced tools for targeted

vulnerability assessments and country diagnostics to help individual countries identify and

develop strategies to respond to the financial crisis. Increased infrastructure financing supported

countercyclical macroeconomic policies of client countries to stabilize existing infrastructure

assets and service and to maintain the pipeline of infrastructure projects. Through the ICF, the

IFC mobilized funding to support infrastructure transactions with private participation to

stabilize viable existing infrastructure projects facing temporary liquidity problems, and enable

some continuation of new project development in private infrastructure.

5. Each of the core infrastructure sectors - Transport, Water, Energy, Urban and Information

and Communication Technology (ICT) - is undertaking a strategic review or update of its

strategy to ensure that these strategies are relevant and address the issues foremost in the agenda

of developing countries. The core infrastructure sectors are supporting developing countries‘

progress to the Millennium Development Goals (MDG), not only in water and sanitation, an

explicit MDG target, but also to ensure that the population has access to basic services, for

example, through transportation, which will enable countries to reach these targets. These sectors


2

are also actively engaging in the reviews of other related Bank practices, including Environment

and Urban Development.

6. Under SIAP, results monitoring has been strengthened. Core indicators have been

identified for most sectors and are being built into project results frameworks. Regions are

providing more real time information on IDA and IBRD results for major projects, in both

quantitative and qualitative terms, with project stories outlining the challenge, lessons learned,

results to date, approach taken, WBG contribution and next steps.

B. Maximizing Effectiveness Through Cross-Sectoral Themes

7. WBG is well positioned to support improved basic infrastructure services with

strengthened economic, social, and environmental implications. In response to intensifying

global trends, SIAP identified three cross-sectoral themes through which the WBG would

maximize the impact of its core sector strategies: climate change, public-private partnerships,

and the spatial dimension of development.

8. WBG continued to make strong progress to support governments to respond to and

mitigate the impact of climate change. In October 2008, the WBG adopted the Strategic

Framework on Development and Climate Change (SFDCC), developed and endorsed in

consultation with governments of 185 member countries. The Strategic Framework guides the

Bank Group‘s operational response to new development challenges posed by climate change

within the principles, policies, and directions of the UNFCCC process. Since the framework was

adopted, the WBG, building on significant previous experience, has rapidly expanded its climate

change related work and collaborative partnerships with developing country governments and

other stakeholders. Studies have been completed to help client countries transition to a low

carbon economy, and development of methodologies for carbon footprinting and climate risk

screening continues. The first Development Policy Loan (DPL) for climate change was

approved in May 2008, providing a $500 million loan to the Government of Mexico.

9. The Energy Efficiency and Renewable Energy portfolio has also significantly scaled up,

surpassing its commitments made at the Bonn International Renewable Energies Conference in

2004. In addition, the Climate Investment Funds (CIF) were approved by the Bank‘s Board of

Directors in July 2008 and represent a balanced partnership of contributor and recipient countries

implementing innovative climate financing through the MDBs to bridge the financing and

learning gap between now and a post-2012 global climate change agreement.

10. The significant market downturn in private transactions provided an opportunity for a

revitalization of the WBG‟s infrastructure PPP agenda during this past year. Clearly, both the

public and private sectors can contribute constructively to robust and efficient infrastructure

services, and the full range of WBG instruments and partnerships were used to support the PPP

agenda during this past year. The Bank launched the Global Expert Team (GET) on PPPs to

support countries to establish sound policies and institutional arrangements to foster competition

and strengthen local public sector regulatory and institutional capacity. The Bank supported the

creation of PPP frameworks and ―upstream‖ capacity building, including a flagship report on a

review of PPPs in the water sector, and provided transaction advice on PPPs.

11. IBRD/IDA, IFC, and MIGA used guarantees to leverage private finance and create an

enabling environment for private investment. Foreign Investment Advisory Services (FIAS)

provided technical assistance for transaction preparation, for IDA-eligible and conflict-affected


3

countries, with a special focus on sub-Saharan Africa. MIGA‘s knowledge and research

products also contributed to expanding PPPs in client countries. Output based aid, through

continued support from GPOBA, was a particularly useful instrument to expand access in a

constrained economy.

12. INFRA and ICF supported direct leveraging of private sector through financing of joint

ventures and provision of technical assistance to Financial Intermediaries such as the Indonesian

Infrastructure Finance Facility, the India Infrastructure Finance Company Limited, and the

Investment Promotion and Financing Facility of Bangladesh. An INFRA guidance note to staff

was issued on The Impact of the Crisis on Infrastructure PPP Projects, and PPIAF continues to

monitor and provide updates.

13. The spatial dimension of development is being incorporated more explicitly through

support of rural-urban integration and expansion of the reach and scope of interaction from

country-level to sub-national and cross-country, regional levels. The World Development

Report (WDR) 2009, Reshaping Economic Geography, presented a cross-sectoral perspective of

the policies and investment choices that may affect the spatial transformations needed for

economic development. LAC and MENA are completing studies with regional implications for

spatial policies. The recent Bank-wide Urban and Local Government Strategy and its proposed

cross-sectoral ―urbanization reviews‖ was reviewed by the Board‘s Committee on Development

Effectiveness in June 2009, and should provide a venue for mainstreaming a better treatment of

rural-urban linkages, including infrastructure policies and investment decisions, across regions.

Analytical work on the linkages between infrastructure and the geography of growth and poverty

was completed through productive collaboration between the SDN and PREM Networks. A

conference on the rural-urban transformation, addressing country conditions, policies and

investment choices that can affect the pace and pattern of urbanization, is being planned for the

spring of 2010.

C. Mainstreaming Sustainability as a Core Dimension of Infrastructure

14. WBG continued to promote sustainability of infrastructure services through a

proactive approach to evaluate environment and social objectives and continues to promote

strong governance of infrastructure service delivery. The definition of sustainability has been

significantly strengthened during the past decade, from a rigorous approach focused on economic

and financial sustainability to a triple bottom line: economic and financial, environment, and

social sustainability. In the area of environmental sustainability, WBG has made a strong

commitment to promote the use of Country Environmental Analyses and Strategic

Environmental Assessments, as well as delivering more innovative products such as the Eco2

Cities Initiative. In the area of social sustainability, WBG has continued to promote inclusive

community and stakeholder participation.

15. The INFRA Platform has supported design of sustainability into crisis response programs

by providing practical guidance notes to WBG staff and development partners on “Greening”

the INFRA Platform and Incorporating Social Dimensions into the INFRA Platform. A Green

Infrastructure event was held during the Annual Meetings in Istanbul and a newsletter

highlighting ―green‖ infrastructure projects supported by the WBG and INFRA partners.

16. An initiative to mainstream Governance and Anti-Corruption in operations was launched

in FY09, providing direct support to design and implementation of infrastructure projects, ―soft

touch‖ advisory services to project teams, and knowledge management products and activities.


4

Sourcebooks on Deterring Corruption and Improving Governance in the electricity, water and

roads construction and maintenance sectors were launched in FY09, with learning events

organized for sector specialists.

D. Scaling-up World Bank Group Direct and Leveraged Financing

17. SIAP called for scaling up WBG finance and advisory services for infrastructure to

between $15 and $18 billion per year from FY09-11 (including $11-13 billion in IDA/IBRD

financing). These targets were revised under the INFRA Platform which were designed to

support the mobilization of more than US$55 billion over three years for IBRD and IDA

infrastructure projects in developing countries. SIAP targets were exceeded during this first year

of implementation, under INFRA, due to greatly

increased demand from client countries.

18. WBG is on track to meet the 3-year

targets, with financing for infrastructure reaching

$21.6 billion in FY09. During the same period,

the WBG leveraged at least $52.4 billion from

other sources, including borrowing governments,

IFIs, donors and the private sector.

19. Overall, IBRD/IDA commitments for

infrastructure increased by over 50%, going from

$11.9 billion in FY08 to $18.3 billion in FY09,

while IFC and MIGA contributed over $3.1 billion

and $0.1 billion, respectively in FY09. In

addition, IFC financed over $800 million in

general infrastructure and other projects.1 In terms

of quality, the infrastructure portfolio has consistently performed on par or better than the Bank-

wide average.

20. Commitments by sector have been as follows:

Transport: IBRD/IDA increased lending from $4.9 billion in FY08 to $6.5 billion in FY09,

delivering one of the largest IBRD/IDA projects through the Kazakhstan Highways Project.

IFC also maintained a large portfolio, committing $1.0 billion. The transport portfolio is

becoming more balanced, with increased emphasis on emissions reduction, road safety, ports,

airports and rail.

Energy: IBRD/IDA‘s portfolio saw similar gains, increasing lending from $4.5 billion in

FY08 to $6.5 billion in FY09, while IFC committed over $1.6 billion in the sector. A

significant portion the energy portfolio contributed to Energy Efficiency (EE) and Renewable

Energy (RE) Projects: over the last five years, the WBG investments rose by more than

230%, reaching $3.3 billion in FY09, or around 40% of WBG energy commitments.

Water: IBRD/IDA‘s portfolio grew from $2.4 billion in FY08 to $4.9 billion in FY09, while

IFC contributed $18 million. Across the WBG, sanitation is receiving increasing attention in

1 Data for General Infrastructure includes funds and investments through financial intermediaries both of which have

infrastructure objectives; data for ―other projects‖ include chemicals and mining.

0

10

20

30

40

50

60

70

80

SIAP LowAnn. Est.

SIAP HighAnn. Est.

FY09

US$

bn

WBG Infrastructure Finance and Leverage

WBG Leverage

WBG Financing


5

both lending and advisory services to support increased access to improved sanitation (MDG

target) and address environmental issues.

Information, Communications and Technology (ICT): WBG‘s commitments nearly

doubled from $0.5 billion in FY08 to $0.9 billion in FY09, 2 with significant focus on

Adaptable Program Lending and integrated projects, as well as private sector projects in

frontier markets, that facilitate regional integration and reduced cost of connectivity and

development of New Economy skills.

21. Collaboration within the WBG has been critical in achieving these results. As called

for in SIAP, WBG institutions have increased their interactions at several levels. Coordination

between regional teams is now occurring more frequently in all the regions. With the

establishment of the IDA-IFC Secretariat, closer collaboration between the institutions has

reached new milestones. There has been an increase in the number of projects that combine

Bank and IFC instruments: in FY09, there were 16 joint investment projects committed.

Alongside these investment projects, there were also 125 active joint advisory projects in IDA

countries in FY09, combining WBG instruments in ways that deliver better outcomes for

member countries. The joint WB-IFC Sub-national Finance Program committed six transactions

with sub-national entities without sovereign guarantees in FY09 totaling $596 million globally.

However, it is also important to note that collaboration was also marked by, not only the number

of joint projects, but also the mutual recognition of the comparative advantage of the respective

WBG institutions. There were deepened set of consultations throughout the WBG, for example,

through the IDA-IFC Secretariat-led regional consultations on PPP opportunities in light of the

global crisis, to determine which of the WBG could take the lead on specific transactions.

22. INFRA and ICF have also facilitated more effective collaboration with external

partners. These two infrastructure components of the Vulnerability Framework have received

great attention and cooperation from the WBG development partners, who recognize the role of

infrastructure as a critical contributor to economic growth and recovery, and that the needs in

developing countries remain significant. Toward this end, INFRA has facilitated exchange of

information on project pipelines, country diagnostics and crisis response approaches and

developments. The first INFRA Partners Forum was held in Brussels in July 2009 with

participation of over 100 development partners. Following the Forum, exchanges between

INFRA partners and Bank regional operations units have been facilitated and information has

been disseminated through the INFRA website and topical bulletins and newsletters. IFC

worked with KfW and PROPARCO to launch the Infrastructure Crisis Facility (ICF).

E. Going Forward

23. WBG’s infrastructure action plan elaborated in SIAP remains valid following 18

months of implementation. The response under INFRA and ICF has reaffirmed that WBG

client countries see the infrastructure sector as a critical component of counter cyclical response

in the economic recovery and that the WBG role in this sector is a leadership role, both in direct

delivery of financing as well as in mobilizing the support of the wider global donor community.

WBG‘s response to the crisis has also shown the innovation and flexibility of the practice to

rapidly respond to the needs of our clients during the toughest of times. Going forward, some

2 Data for Telecom includes investments in information technologies.


6

areas of SIAP and INFRA will receive increased emphasis to remain consistent with the WBG‘s

response to the crisis and evolving sector strategies and emerging issues and implementation.

24. Demand for infrastructure will not decrease in developing countries in the coming

years. It is clear that we and others need to scale up our efforts to support countries to access

core services to meet the MDGs. Therefore, it will be critical to ensure that going forward, the

WBG continues to be well-positioned to respond to this demand, through increased financial

support, improved knowledge and non-lending services, increasing cross sectorial interventions

and continued support to donor harmonization and coordination to ensure that aid resources are

effectively utilized and serve the population in client countries. Continued excellence of staff

and resources to deliver this support to developing countries will remain a prime focus of the

WBG infrastructure practice.

F. Structure of the Report

25. Section II of this report provides a detailed update on the implementation of SIAP in

FY09 along with progress achieved under the INFRA Platform and the ICF during the six

months following their launch. This section is organized against major sections of the SIAP

action matrix.

26. Section III elaborates on the responsiveness of the WBG in delivering on the multifaceted

infrastructure assistance priorities outlined under SIAP and discusses the various in approaches

employed by the WBG to meet its objectives.

27. Annex A: SIAP Action Matrix presents a more concise summary of deliverables and

results that correspond specifically with the matrix presented in the Sustainable Infrastructure

Action Plan (approved July 2008).

28. Annex B: Project Highlights provides information on recent projects and advisory

engagements referred to in the progress report.


7

II. IMPLEMENTATION PROGRESS: SUSTAINABLE INFRASTRUCTURE ACTION PLAN,

INFRASTRUCTURE RECOVERY AND ASSETS PLATFORM AND THE INFRASTRUCTURE

CRISIS FACILITY

A. Introduction

29. SIAP is an umbrella framework that brings together the lessons of the WBG‟s

infrastructure experiences from the past two decades and the 2003-07 Infrastructure Action

Plan. It provides direction to the many individual efforts to increase infrastructure support by

the different WBG institutions through multiple product lines. Four aspects are critical to the

WBG‘s approach to infrastructure in SIAP: (i) focused development of cross sectoral themes to

maximize effectiveness of core sector strategies; (ii) strong WBG interaction to increase the

effectiveness of each of its institutions and strengthened ways to work together; (iii)

sustainability at the core of infrastructure interventions through focus on the ―triple bottom

line‖—economic/financial, environmental, and social sustainability-based on a platform of

strong governance; and (iv) augment the WBG‘s direct financing through increased attention to

leveraging its financing efforts in order to mobilize additional aid resources for infrastructure,

using the full convening power of the WBG to support client countries. SIAP targeted an overall

volume of WBG direct financing of infrastructure of $15-18 billion per year, including $11-13

billion of IDA/IBRD financing.

30. Shortly after SIAP was discussed by the Board of Directors in July of 2008, the global

financial crisis adversely affected the availability of finance for infrastructure in developing

countries. The crisis has made financing (both debt and equity) more difficult to secure as

access to capital markets and bank lending has been reduced or halted and risk perception has

increased. Infrastructure projects have witnessed both a withdrawal of potential financiers and

an increase in funding costs to unsustainable levels, resulting in increased number of project

delays and cancellations. At the same time, faced with declining fiscal receipts and the need to

increase spending on immediate social needs, developing country governments have

understandably shifted focus away from infrastructure sectors and have found it difficult to

maintain financial commitments to public-private infrastructure projects.

31. In response to the deepening global financial and economic crisis, the WBG

significantly expanded SIAP‟s mandate by launching the Infrastructure Recovery and Assets

(INFRA) Platform and the Infrastructure Crisis Facility (ICF)--two components of the WBG‘s

broader Vulnerability Framework. While INFRA and the ICF established new short and medium

term infrastructure goals for the WBG country teams, these new platforms continued to support

the original framework developed under SIAP and significantly expand upon the WBG‘s

commitments as defined by SIAP.

32. The INFRA Platform seeks to facilitate timely, transparent, and concerted actions to

support infrastructure and to encourage increased collaboration among multilateral and bilateral

development organizations. The specific objectives of the INFRA platform reinforce SIAP‘s

triple bottom line approach by supporting client governments to (i) stabilize existing

infrastructure assets by providing funding and other support for infrastructure development and

maintenance; (ii) ensure delivery of projects that remain government priority by providing

additional financing for infrastructure investments, sub-national lending and technical assistance;

(iii) advance the ―greening‖ agenda, following the lead of some developed and developing

countries which have included this as a focus within their stimulus packages; in particular by


8

supporting projects designed to improve energy efficiency, increase reliance on renewable

energy, reduce carbon emissions and clean up, protect and more efficiently utilize water

resources; (iv) bridge the current gap of government commitment to private sector in emerging

markets to support PPPs; and (v) support new infrastructure project development and

implementation by providing financing and advice to governments that intend to launch growth

and job enhancing infrastructure programs.

33. INFRA increased IDA/IBRD lending targets for infrastructure from $11-13 billion per

year proposed under the SIAP to $15 billion per year over FY2009-2011 and called for

coordinating a response among international financial institutions and donors to bridge

infrastructure financing, project preparation, and capacity gaps resulting from the global

financial crisis and raising awareness on the need to continue financing infrastructure to provide

the foundation for rapid recovery and job creation and to promote long term growth.

34. IFC‘s Infrastructure Crisis Facility (ICF) is designed to mobilize up to $10 billion to

support private and PPP infrastructure development throughout emerging markets and

developing countries to stabilize viable existing infrastructure projects with private participation

which are facing temporary liquidity problems, and enable some continuation of new project

development in private infrastructure.

35. WBG is on track to meet the 3-year targets, with financing for infrastructure reaching

$21.6 billion in FY09. During the same period, the WBG leveraged at least $52.4 billion from

other sources, including borrowing governments, IFIs, donors and the private sector.

36. Overall, IBRD/IDA commitments for infrastructure increased by over 50%, going from

$11.9 billion in FY08 to $18.3 billion in FY09, while IFC and MIGA contributed over $3.1

billion and $0.1 billion, respectively in FY09. In addition, IFC financed over $800 million in

general infrastructure and other projects.3 In terms of quality, the infrastructure portfolio has

consistently performed above or on par with the Bank-wide average. Portfolio risk has been

maintained below the Bank-wide average for the last five fiscal years (FY05-09). The Quality-

at-Entry assessments (QAE) conducted by QAG show improvement of infrastructure projects

from 94 percent moderately satisfactory or better in FY06 to 99 percent in FY08.

37. Progress on achievement of SIAP, INFRA and ICF objectives is reviewed in detail in this

section of the report and summarized in Annex 1.

B. Addressing the Access Gap Through Core Sector Strategies

38. The core infrastructure access agenda remained a primary focus of SIAP, emphasizing

the strengthening of sectoral policies and institutions to improve the efficiency, affordability,

quality, and reach of basic services. A number of strategic reviews of infrastructure strategy are

currently taking place in each of the core infrastructure sectors: Transport, Water, Energy, and

information and communication technology (ICT). These sectors are also actively engaging in

the strategic reviews of other Bank Sectors such as Environment and Urban Development.

39. While the multidimensional aspects of sustainability provide new assistance opportunities

in the years ahead, in most of the developing world there is still an important unfinished core

3 Data for General Infrastructure includes funds and investments through financial intermediaries both of which have

infrastructure objectives; data for ―other projects‖ include chemicals and mining.


9

infrastructure access agenda: strengthening sectoral policies and institutions to improve the

efficiency, affordability, quality, and reach of basic services. Each of the WBG institutions has

scaled up its support to meet the access gap in core infrastructure sectors and to support

developing countries progress towards the MDGs.

1. Transport

40. The Transport Business Strategy was actively disseminated in FY08 and FY09. The

Strategy states the need for greater engagement with transport services and policies that take into

account a broad perspective of impact. A majority of the Bank‘s transport lending is for

infrastructure. However, most of the expected benefits of infrastructure investments depend on

the existence of effective transport services and markets. Freight transport infrastructure has

been a cornerstone of Bank lending since the inception of transport activities. While knowledge

of infrastructure is well developed, knowledge of freight transport markets remains inadequate.

Developing these markets is critical to ensuring that infrastructure investments benefit all users.

41. The World Bank report on “Freight Transport for Development” addresses the need

for greater engagement by improving knowledge of how these markets function so that

transport infrastructure projects are adequately linked to corresponding efforts to make

transport services responsive to people‟s needs. In FY09, seven thematic case studies were

produced on Road Transport, Rural Transport, Urban Freight Transport, Ports and Maritime

Transport, Rail Transport, Air Freight Transport and Integrated Logistics Services, providing the

background for a policy recommendation paper that will be completed in FY10. The Bank is

reviewing how freight transport services, costs, organization and delivery, impact on commerce

and trade and on development prospects around the world. A Toolkit is being prepared and will

assist client countries and Bank‘s staff to develop effective decision-making processes over

freight transport policies and also assist the development strategy of the Bank‘s client countries.

42. The Bank is increasingly engaged with cross-sectoral operations to exploit linkages

between transport and development challenges in the energy sector. The Bank has provided

assistance to Brazil, China, India, Indonesia, Mexico, Poland, and South Africa to identify low-

carbon development paths, which identify mitigation options in different sectors, including

transport and energy. The studies, tailored to specific country needs, have identified the costs

and benefits of the mitigation options, financing needs, and required policy support to implement

the measures. In addition to low-carbon studies, the Bank is increasingly engaged in providing

technical assistance to help client countries develop energy-efficient transportation systems. For

instance, a Bank-financed energy-efficiency transport study for Thailand found that energy

consumption in the transport sector could be reduced by one third by 2025 if better vehicle

standards, reform and investments in the rail sector, and improved urban bus services and pricing

measures amongst other measures are implemented.

43. Another area where the linkages between transport and energy sector development

challenges are being exploited is through the Clean Technology Fund (CTF) operations that

seek the deployment and transfer of low carbon programs and projects with a significant

potential for long-term green house gas emissions. Two of the three investment plans

submitted to CTF include energy and transport as the two priority sectors. Egypt‘s and Mexico‘s

CTF investment plans have both identified investments to undertake modal shifts toward mass

transport systems and fuel efficient vehicles. Switching fuels to natural gas and electrified trains

are among the solutions identified in the investment programs, where potential emission


10

reductions have been quantified in the order of 2.5Mt CO2e/year and 2Mt CO2e/year for Mexico

and Egypt respectively.

44. A critical aspect of the sustainability of transport services worldwide is being addressed

with the scaling up of the road safety agenda in Bank operations. The Global Road Safety

Facility, established in 2005, is now operational in over thirty countries. As a multi-donor trust

fund receiving contributions from both public and private entities, it embodies the spirit of

partnership required to both leverage limited public resources and energize local constituencies

to ensure the lasting effects of road safety activities on the ground.

45. The WBG focused on diversifying its transport portfolio from roads to all transport

modes, including rails, port, airports and the design of multi-modal transport and logistics

operations. The Transport portfolio showed first signs of rebalancing in FY08, with roads &

highways coming down to 57 percent, while urban transport projects and railways in particular

took a larger share of operational activities. The very large Kazakhstan Highways Project apart,

in FY09 the roads subsector came below 50 percent of the remaining transport portfolio. The

overall WBG air transport portfolio was at $1.37 billion end of fiscal year 2008, which includes

28 major projects in all regions of IBRD and IDA, and 20 active IFC investments and several

advisory mandates. The total active portfolio financed by loans or grants of IBRD and IDA

increased to $530.4 million in fiscal year 2008, and IFC's air transport investment portfolio has

reached $841 million. IBRD has financed several airport development projects. IFC also

diversified its transportation portfolio in FY09, focusing on aviation, airports and ports.

Examples of recent transport projects supported by the WBG can be found Annex B.

2. Water

46. Ensuring that scarce water resources are appropriately managed, while supporting the

provision of a range of water services necessary for development has been at the core of the

World Bank Group assistance for water. Since the endorsement of the 2003 Water Resources

Sector Strategy, the support of the WBG has been significant, with new project commitments

increasing from $1.8 billion to $5.1 billion in FY09. The overall increase in water is reflected in

an increase in each sub-sector, with water supply and sanitation emerging as a core business for

both the World Bank and IFC. Sanitation, in particular, is receiving increasing focus in the

portfolio, with significant commitments and non-lending technical assistance to increase

sanitation access and improve the environment in major cities and rural areas. (See Box 2.1). On

the institutional side, the Bank has balanced investments in infrastructure with improvements in

the institutions that manage and allocate water. With more than two-thirds of the Bank's water

projects showing satisfactory outcomes, the Bank continues to play an important role and added

value in this sector.

47. The integration of the water practice across Bank sectors is well underway.

Considerable progress has been achieved in integrating water into the work of other sectors. For

example, the majority of the water-related projects are now overseen by Sector Boards other than

Water Supply and Sanitation. More recently, the WBG has engaged with McKinsey in looking

at innovative tools to identify cross-sectoral interventions that could constitute a more cost-

effective approach to closing the water resource gap. Within the Bank, progress has also been

achieved in consolidating institutional structures to carry out water activities. The creation of


11

SDN in 2007 set the institutional and organizational basis for the Bank to think and deliver

"laterally" in a more integrated way. Since then, the new Water Sector Board has been fully

integrated. It has ensured oversight of all freshwater activities, lines of business and water issues

(e.g. water resources management, water supply and sanitation, irrigation and drainage, and

hydropower) within the institution, promoting the breakdown of the original division of water-

related development organizational units. The new Water Sector Board integrated what was

known formerly as the Water Supply and Sanitation Sector Board, and the Water Resource

Management Group (a thematic group) into a formal structure, thereby giving to the WRM

Group a formal channel to promote the water resource management agenda (including water

quality, conservation, groundwater management, demand management, watershed management

and institutional reform). Increasingly, projects and advisory services are shifting away from

narrow focus on a single sub-sector to more integrated approaches to water management (e.g.,

projects in Argentina, Brazil, Yemen and China).

48. The 2003 Water Resources Sector Strategy - Mid-Cycle Implementation Progress

Report (MCIPR) is expected to be delivered in FY10. The Report will review progress to date

on the implementation of the strategy and IFC activities, and define mid-course strategic

refinements (if any) that may be needed to guide the business going forward. The sector will

face heightened challenges due to climate change, the migration to coastal zones, and the

declining quality of the water resources available to most major cities and industry in the coming

decades. The MCIPR will build on the recommendations from the recent IEG Evaluation of

World Bank Support, 1997-2007 to ensure that critical water issues are adequately addressed,

including helping countries to strengthen attention to sanitation, coastal management issues,

groundwater conservation, strengthen the supply and use of data on water to better understand

the linkages between water, economic development, and project achievement.

49. As part of its draft Water Sector Business Plan, IFC has identified five key investment

focus areas as follows: (i) water demand management and efficiency, (ii) wastewater treatment

and re-use sanitation and solid waste, (iii) water supply and treatment, (iv) distributed services,

including un-served consumer access and off-grid water and sanitation services, and (v)

innovative technologies. MIGA‘s portfolio for FY09 included two projects in the water sector in

China. Annex B highlights a sample of recent projects supported by the WBG in the water

sector.


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50. The WBG Hydropower Business Plan, Directions in Hydropower: Scaling up for

Development, prepared in FY09, identifies a two-track approach to lending and sector

strengthening to scale up investments by promoting good practice, strengthening project

planning, leveraging regional development and building partnerships through effective

communication and consultation. This business plan proposes to scale up investments to about

$1.3 billion per year to help meet the climate change challenge and mitigate high oil costs in

support of the poverty reduction agenda in key regions, such as Africa and South Asia.

4 Joint Monitoring Program, WHO & UNICEF

Box 2.1: Scaling up Sanitation Access

Target 10 of the MDGs is to halve by 2015 the proportion of people without sustainable access to safe drinking

water and sanitation. Yet the number of people still to receive improved access to water and sanitation in the

world remains large: almost 900 million people who need improved access to water and over 2.5 billion people

who need improved access to sanitation. Globally, open defecation has dropped from 24% in 1990, to 18% in

20064; however, the target for sanitation still remains elusive in the entire developing world. These numbers are

greatest in South, East Asia, Africa, primarily in rural areas. The Bank has responded to the sanitation challenge

through both lending and non-lending instruments. Lending for sewerage and sanitation has increased from an

average of $485million in FY04-06, to an average of $886 million in FY07-09, with a peak in FY09 of $1.2

billion. However, improving basic sanitation does not require large investments, especially in the rural areas

where the significant majority of the world‘s population still lack access. To scale up basic sanitation, perhaps

the more important contribution has been through the Bank‘s non-lending activities. The Bank‘s ―just in time‖

expert support to sanitation has resulted in both improved design and monitoring of sanitation projects in

standalone and incorporated into larger programs.

The Water and Sanitation Program (WSP), has successfully ramped up focus on sanitation through an ambitious

program of support to three governments – Indonesia, Tanzania, and India – to innovate approaches to scaling up

rural sanitation through collective behavior change and consumer marketing approaches. In Indonesia, WSP is

helping develop sanitation policies and strategies that are being used by the government as the basis for their

Acceleration of the Urban Sanitation Program to reach 330 cities by 2014. From the results in these three

countries, the program also seeks to contribute to the sector effective methods to scale up pilot projects to a

national scale through rigorous monitoring and evaluation.

The Bank has also supported global activities during the International Year of Sanitation (IYS) 2008, to mobilize

global attention to scale up basic sanitation. WSP has mobilize knowledge and support through evidence based

advocacy to make sanitation a priority for all:

Economics of Sanitation Initiative (ESI): The first set of ESI showed that the combined impact of poor

sanitation in Cambodia, Indonesia, the Philippines, and Vietnam could be over US$9 billion, or 2% of

combined GDP. Evidence from such studies help create advocacy with wide impact on government

decisions to make sanitation a priority for all.

Study on Sanitation Finance for On-Site Sanitation: Subsidies can be an emotive issue in the sector. In

an effort to provide much needed evidence to this subject, the study showed that subsidies, planned and

implemented as part of an overall strategy, can have a sustainable impact on access to sanitation. The

study examines a range of financing options which can be examined to scale up onsite sanitation.

AFRICASAN V Conference: Ministers pledged to ―establish specific public sector budget allocations

for sanitation and hygiene programs. Our aspiration is that these allocations should be a minimum of

0.5% of GDP for sanitation and hygiene.‖ During 2008, Sub-Saharan countries began to implement this

pledge through allocation of additional funds, including government own budget, for sanitation.


13

Figure 1: World Bank Group: Hydropower Components by Approval Fiscal Year (Value

of WBG Contribution to Multipurpose Hydropower Components)

Source: World Bank: Business Warehouse; Project Staff Appraisal Reports; Project Appraisal Documents;

Implementation Completion Reports; World Bank Carbon Finance Unit; and IFC.

3. Energy

51. The energy sector has continued to scale up to address the energy access gap and

responding to the emerging challenges of climate change and de-carbonizing the energy

sector. To support reduction of technical and commercial losses in the power sector and

increased access to low carbon sources of energy, the WBG has used a range of instruments to

support public and private sector projects. Examples of recent IBRD/IDA and IFC projects that

have increased access and efficiency and have strengthened sector institutions can be found in

Annex B.

52. The Bank‟s proposed Energy Strategy will articulate a way forward to help developing

countries achieve the twin objectives of improving access and reliability of energy supply and

facilitating the shift to a more environmentally sustainable energy development path. A

Concept Note of the new energy strategy was discussed by the Committee of Development

Effectiveness in July 2009. As part of the preparation of the energy strategy, a few background

papers are being prepared including on the roles of public and private sectors, energy subsidy

reforms, the WBG‘s role in promoting clean technologies, reducing technical and commercial

losses in the power sector, and energy access.

53. WBG has scaled up its portfolio of energy efficiency and renewable energy projects.

Five years ago the Bank Group promised to expand the RE/EE portfolio by 20% per year. Over

the five year period, this portfolio rose by more than 350 percent. In FY09, RE/EE project

financing (including large hydropower) in developing countries reached $3.3 billion, constituting

around 40 percent of the entire WBG energy portfolio. New renewable energy and energy

efficiency investments have grown at a rate of over 20 percent per year; growth over the next

three years is expected to be 30 percent annually. The Bank has been able to surpass

commitments made at the Bonn International Renewable Energies Conference in 2004 to

increase support for new renewable energy and energy efficiency. The recent report Energizing

Climate-Friendly Development: World Bank Group Progress on Renewable Energy and Energy


14

Efficiency in Fiscal 2008 summarizes the progress made at the WBG during 2008, and presents

case studies and analyses from several noteworthy projects.

54. Sector wide approaches are being used to support scale up of access in SSA. For

example, an Energy SWAp MOU was signed in July 2008 by the Government of Rwanda (GoR)

and its biggest development partners – the World Bank, Africa Development Bank, European

Union, the Netherlands, and Belgium (See Annex B)

Box 2.2: IDA Energy Services for Poverty Reduction and Growth

Reliable and affordable energy services for agriculture, industry, commerce and households underpin growth in

productivity and output, and improve the welfare of the poor. However, in many IDA countries, households and

enterprises lack service altogether or suffer high cost and unreliable supplies.

In some Sub-Saharan African countries, less than five percent of rural households receive electricity service and,

at current rates of electrification, more than 50 percent of households region-wide would still lack access in 2050.

The World Health Organization estimates that more than 3 billion people, most of them in IDA countries, use

wood, dung, coal and other traditional fuels inside their homes to meet cooking and heating needs, and that the

resulting indoor air pollution is responsible for 1.5 million deaths per year—mostly of children and women.

Lack of energy services in many IDA countries is due to chronic underinvestment in the sector as well as to sub-

optimal policies and weak institutions. The support of IDA in the sector encompasses investment as well as

policy and institutional support to help countries improve energy services. Although IDA is often the largest

external financier of power sector investments, it only accounts for perhaps 5-to-10 percent of total investment.

Consequently, IDA seeks through its projects to leverage other donor and investor finance and to improve the

operational performance of sector entities so that they generate increased amounts of investment from their own

resources.

IDA‘s focus on systemic changes has produced tangible results:

In Tanzania, IDA is financing the Tanzania Energy Development and Access Expansion Project,

approved in 2008, which, among others, supports local renewable energy development to boost the

country‘s generation capacity and expand access in rural areas, where electrification rate is below 2

percent. A comprehensive regulatory framework has already been adopted to streamline and simplify

procedures for small power projects. As a result, 22 projects promoted by local sponsors are currently

under development, amounting to over 70 MW. IDA provided $105.0 million, and the Global Energy

Fund supported the project with $6.5 million.

In Bangladesh, IDA is financing the Rural Electrification and Renewable Energy Development Project,

approved in 2002, whose objective is to support Bangladesh's efforts to provide electricity to the entire

rural population by 2020. The project‘s approach includes extension of electricity distribution grids and

the introduction of renewable energy options in remote areas where grid extension is not feasible. IDA

provided a $236 million credit to the project, from which $56 million are dedicated to the off-grid,

renewable energy solutions. The project has been able to leverage additional $8 million in financing

from Global Energy Fund.

In Vietnam. The WB will provide USD 150 million through the Rural Distribution Project to finance

investments aimed to improve the reliability of electricity distribution systems and quality of service

provided by state owned companies in rural areas of Vietnam.


15

4. Information and Communications Technology

55. In the ICT sector, the WBG has continued to support expanded access to information

infrastructure, mainstreaming and innovation while broadening support in the context of ICT

for the development agenda in response to industry trends and clients‟ demands. The Global

ICT Department, a joint WB-IFC department, has been shifting focus from traditional technical

assistance to Adaptable Program Lending and integrated projects (WB) and financing of private

sector projects in frontier markets (IFC). Creative joint initiatives, such as the second and third

phases of the Regional Communication Infrastructure Program (RCIP 2 and 3), have supported

clients to reduce the cost of connectivity in Eastern and Southern Africa. The regional program

also enhances government efficiency and economic productivity while mainstreaming ICT.

Inclusion of strong e-government components, and collaboration with the education and private

sector development has allowed good progress in retrofitting existing operations to support

development of New Economy skills with a focus on ICT industries in eight Sub-Saharan

countries.

56. IFC continued to focus on ICT growth in frontier markets and conflict-affected

countries. IFC‘s portfolio continued to focus on frontier markets, with 14 out of 23 projects and

80 percent of commitments in IDA countries, extending the availability of affordable mobile

telecommunications services, including in Ghana, Uganda, the Caribbean, Afghanistan and the

Pacific Islands (see Annex B).

57. Analytical framework and advisory support countries to leverage New Economy

opportunities and ICT sector reform for liberalization and competition. The World Bank is

supporting policy reform in more than 40 countries, and has enhanced the analytical program

through two flagship ESWs. The 2009 flagship report, Information and Communications for

Development, illustrates the new opportunities offered by mobile, broadband, IT-based services

and various ICT applications. The report also features at-a-glance tables for 150 economies of

the latest available data on ICT sector performance. The other flagship report, Development of

IT and IT-Enabled Services Industries: Impact, Trends, Opportunities and Lessons Learned for

Developing Countries, focuses on three objectives directly relevant to many governments

(national and sub-national) aiming to accelerate the growth of their IT and ITES industry: (i)

development impact of IT and ITES industry, (ii) diagnostic tool for Industry Competitiveness

Assessment, and (iii) good practice policy options.

5. Crisis Response to preserve the access agenda

58. INFRA has raised awareness about the potentially adverse impacts of the crisis on

maintenance of existing infrastructure and preservation of the pipeline of projects. Advocacy

for counter-cyclical spending on infrastructure as an effective tool to provide the foundation for

rapid recovery and job creation and to develop a robust economic platform for long term growth

started even before the launch of INFRA during the Spring Meetings in April 2009.

59. INFRA diagnostics and advisory support have reinforced SIAP‟s access agenda. Tools

and approaches include a rapid diagnostic tool, guidance notes and a website for information

dissemination and exchange. INFRA Guidance Notes issued to date include: (i) Mitigating the

Impact of the Financial Crisis on the Urban Poor using Results Based Financing such as Output

Based Aid, (ii) Impact of the Crisis on Infrastructure PPP Projects, and (iii) Greening the


16

INFRA Platform. These tools have been shared with development partners and have been made

available on the INFRA website. 5 A fourth Guidance Note is to be issued shortly on,

Incorporating Social Dimensions in the INFRA Platform.

60. Infrastructure diagnostics have been completed in four countries and are ongoing in

nineteen others to assess the short to medium term impact of the credit crisis on infrastructure

(see Table 1 and Box 2.3). The diagnostics are intended to help identify (i) pipeline of priority

infrastructure projects that can have immediate economic impact and have high employment

generation potential; (ii) financing gaps for priority projects; (iii) ―green‖ investments, including

hydro, wind, biomass and solar; and (iv) PPP projects at risk of falling through due to the crisis.

The insights and analysis gathered from the INFRA vulnerability assessments serve as entry

point for additional support to client countries.

Table 1: Status of Regional Diagnostics

61. The Bank has ramped up infrastructure lending to support countercyclical

macroeconomic policies of client countries. WBG lending in infrastructure nearly doubled

from approximately $11 billion in the period from October 2007 to September 2008, to over $21

5 http://www.worldbank.org/infra

Region Country Sector Status

East Asia and Pacific Philippines, Vietnam Power* Complete: Follow

up ongoing

Indonesia, Philippines,

Vietnam

Transport, Water and

Sanitation

Ongoing

Mongolia All Infrastructure Ongoing

Eastern Europe and Central

Asia

Armenia, Bulgaria,

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* Ongoing

South Asia Bangladesh, India Power* Ongoing

*Power Sector Vulnerability Assessments are Supported by ESMAP.

Box 2.3: Snapshot from East Asia - ESMAP Power Sector Vulnerability Assessments

Declining investments in the power sector, especially during times of economic and financial crisis, affect long-

term economic growth. For example, in the aftermath of the 1997 Asian financial crisis, Indonesia faced load

shedding in many of its islands. Its overall energy infrastructure quality also lagged behind its neighbors, such as

Thailand, Taiwan, China, and Sri Lanka. Indonesia‘s average economic growth in the decade after the Asian

financial crisis languished at 2.8% compared to 7.4% in the decade before the crisis. The decline in Indonesia‘s

economic growth was partly the result of underinvestment in energy and other infrastructure.

ESMAP‘s power sector vulnerability assessment of East Asia reveals a funding gap in Indonesia of US$1.3

billion for 2009–10. For comparison, the funding gaps for Vietnam and Philippines are estimated at US$800

million and US$1.6 billion, respectively.

Sources: “Country Energy Sector Vulnerability Assessments Program,” ESMAP 2009.


17

billion from October 2008 to September 2009. Box 2.3 highlights the approach taken by each

region to respond to client‘s needs. Information on some specific projects can be found in

Annex B.

Box 2.3: Regional Response to the Global Financial Crisis

AFR: Although the region was largely shielded from the initial impacts of the global financial crisis, falling

commodity prices, reduced private flows and a shrinking fiscal space have created a very difficult environment

for infrastructure investments in Africa. Responding quickly to the challenge, the World Bank scaled up its

infrastructure lending from $2.5billion in FY2008 to $3.6 billion in FY2009. Key interventions to help mitigate

the crisis included $100 million of infrastructure-related resources to DRC through the IDA fast-track facility and

$238 million for the Road Sector Development Program and Fourth Adaptable Program Loan Project for

Ethiopia. However, as fiscal pressures mount due to the global financial crisis, redressing Africa‘s infrastructure

shortfall is becoming ever more challenging.

EAP: Having undertaken structural and institutional reforms following the Asian Crisis in 1990‘s, economies in

the region have been able to better respond to the crisis. To mitigate the impacts of the current crisis, many

countries have adopted stimulus packages with significant infrastructure components. The Bank has helped

countries in the region prioritize infrastructure investments by approving $3.1 billion of infrastructure lending in

FY09. Some notable interventions include $300 million for one the first projects approved under China‘s

stimulus plan--the NanGuang Railway Project in China--and $100 million for the Indonesia Infrastructure

Finance Facility Project approved in June 2009.

ECA: After a decade of strong growth, the countries in Europe and Central Asia were the hardest hit by the

financial crisis, as they experienced a ‗sudden stop‘ in capital inflows. They have been unable to implement

countercyclical macroeconomic policies and infrastructure investments in the region are at risk. In response, the

Bank stepped up its infrastructure lending for the region by approving $4.9 billion for infrastructure sectors in the

region in FY2009. Some key interventions in the ECA region included the $2.1 billion Kazakhstan South West

Roads Project, which is being jointly implemented ADB, EBRD, JICA, and IsDB and will greatly improve

regional transport linkages. What is more, cutting edge analysis and operational support is being provided in a

number of areas including "greening" investment schemes, PPPs in transport, electronic tolling, urban

regeneration, and investments in hydrometeorology for climate adaptation. The $500 million for Turkey Private

Sector Renewable Energy and Energy Efficiency Project is receiving $100 million from the Clean Technology

Fund. Additional financing instruments and new approaches for supporting infrastructure development, such as

fee-for-service arrangements and sub-national financing, have been utilized. It is imperative that the Bank

continue to maintain support for infrastructure development to help ECA countries avoid growth constraining

shortfalls in the future.

LCR: Latin American and Caribbean countries are relying greatly on stimulus packages to respond to the crisis.

Infrastructure investments are central part of these stimulus plans. Governments in the region plan to invest an

additional US$25 billion in 2009 in public works—about 20 percent beyond the originally planned budget

allocations. The 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 and $212 million for the Second Rio

de Janeiro Mass Transit Project.

MNA: 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.

The Bank committed $1.3 billion for infrastructure sectors in the region in FY2009, including $600 million for

the Egypt Ain Sokhna Power Project.

SAR: The growth outlook of South Asia has been nearly halved from a peak GDP growth rate of 9 percent in

2006 to nearly 5 percent in 2009. There has been 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. To mitigate the impact of the crisis on infrastructure sector, the

Bank approved $1.9 billion for infrastructure in the region in FY2009, including $149 million for the Dhaka

Water Supply and Sanitation Project and $250 million for the Orissa State Roads Project.


18

C. Maximizing Effectiveness Through Cross-Sectoral Themes

62. SIAP intended to maximize the effectiveness of each of the core sectors and contribute to

leveraging the impact of the core sector strategies through the following three cross-sectoral

themes: (a) supporting governments to respond to and mitigate the impact of climate change, (b)

―crowding in‘ the private sector by expanding PPPs; and (c) more explicitly incorporating the

spatial dimension of development.

1. Climate Change Mitigation and Adaptation

63. The WBG is helping governments respond to and mitigate the impact of climate

change by providing analytical and advisory services and financing for adaptation and

mitigation. Reports to guide incorporation of climate change considerations in infrastructure

operations are being developed. Country-level studies carried out to support client countries

transition to a low carbon economy. Methodologies are being developed for carbon footprinting

and climate risk screening. Climate Investment Funds have been established to support scale up

of investments in low-carbon technologies. The first Development Policy Loan (DPL) for

climate change was approved in May 2008, providing a $500 million loan to the Government of

Mexico.

64. In October 2008, WBG adopted the Strategic Framework on Development and Climate

Change (SFDCC). The Strategic Framework guides the Bank Group‘s operational response to

new development challenges posed by climate change within the principles, policies, and

directions of the UNFCCC process. Since the framework was adopted, the WBG, building on

significant previous experience, has rapidly expanded its climate change related work and

collaborative partnerships with developing country governments and other stakeholders. While a

comprehensive progress report on the implementation of the framework will be prepared early in

2010, this section summarizes preliminary highlights relating to SIAP.

65. A Transport and Climate Change Report is being developed with ESMAPs support and

will seek to achieve the following objectives: (i) set out options for policy makers on how to

reduce the carbon-intensity of transport, and the relative costs of these options in terms of their

impact on social development; (ii) provide background information for the re-orientation of

transport projects to support the reduction of the carbon-intensity of transport; (iii) provide the

background for innovative evaluation tools to support the adjustment of the transport sector to a

reduced emission-intensity; (iv) provide information to the development community on the

importance of the transport sector for development and the challenge to reduce its costs in terms

of contributing to climate change; and (v) provide information to the community of transport

experts on the relationship between transport sector development and climate change. In doing

so, the report will in particular complement SFDCC, from a transport sector perspective, by

stepping up policy research, knowledge, and capacity building, and supporting accelerated

development and the deployment of new technologies.

66. The Bank has completed a paper on “Water and Climate Change: Understanding the

Risks and Making Climate Smart Investment Decision”. It provided an evaluation of the

exposure of the World Bank water sector investments to future climate change. The paper

presents a common platform for climate change projections and methodology for assessment of

the vulnerability of water systems to hydrologic changes. It also includes a menu of adaptation

options for increased robustness and resilience of water systems to climate variability. This


19

work will be further expanded in FY10 and 11 looking at climate change adaptation strategies at

basin and planning levels. The function of ecosystem services is likely to play a prominent role

in these adaptation strategies. The planned outcome of this work is a methodological framework

for rapid assessments of climate change adaptation strategies at basin and national levels.

67. Together with ESMAP and IFC, the Bank developed Clean Energy Technology

Acceleration, a new analytical framework and a set of proposals to accelerate the

commercialization and deployment of advanced clean energy technologies for client countries. This work identifies WBG competencies that could contribute to efforts in this area as well as

other needed skills and which groups (public, private and multilateral) could bring these as

suitable partners. External consultation to refine vehicles and contribute to debate in this

globally crucial topic include: (i) international workshop with external experts, (ii) keynote

presentations at conferences and specially organized side events, (iii) outreach to stakeholders in

India and South Africa, (iv) numerous bilateral discussions. The project‘s conclusions, with

proposed new vehicles for energy technology acceleration, were presented at a Board Technical

Briefing on January 27, 2009. Following the briefing, the GEF with its experience and mandate,

was identified as the appropriate agency to lead the proposed new vehicles. These proposals

will be incorporated into GEF funding replenishment framework with WBG eventually

becoming one implementing agency.

68. The Bank completed five studies in FY09 to help countries transition to low carbon

economies. It provided assistance to Brazil, China, India, Indonesia, Mexico, Poland, and South

Africa to identify low-carbon development paths, which identify mitigation options in different

sectors, including energy. On the mitigation side, analytical work is focusing on accelerating

clean technology innovation, transport and climate change, economics, social and distribution

impacts of policy responses and helping countries assess low-carbon growth opportunities and

strategies. These studies are undertaken in close collaboration with the respective governments,

agencies, and local stakeholders, and are targeted to specific needs and priorities of each country.

Across studies, analysis covers energy efficiency in end-use applications, power sector,

transport, land use, and bio-energy, complemented by advice for priority implementation

options. Key results and dissemination activities started in the second half of 2009.

69. As mentioned earlier, WBG has scaled up its portfolio of energy efficiency and

renewable energy projects. In FY09, RE/EE project financing (including large hydropower) in

developing countries reached $3.3 billion, constituting around 40 percent of the entire WBG

energy portfolio. IFC has also scaled up investments in renewable energy and energy efficiency

projects, moving from 21 projects with $221 million IFC financing in FY05 to a record 55

projects with more than $1 billion in IFC financing in FY09. MIGA is helping investors and

developing countries reduce the harmful practices associated with global warming by providing

political risk guarantees to support investments in renewable energy, energy conservation, and

increased efficiency.

70. The WBG is also developing, testing and improving methodologies for carbon

footprinting and climate risk screening. Under the SFCCD, Carbon footprinting, now referred

to as GHG Analysis, is meant to: (i) build staff and client capacity to understand and apply the

analytical tools to prepare for a carbon constrained future; (ii) gather information to better

understand the implication of possible new approaches; (iii) identify low cost mitigation

opportunities across operations; (iv) facilitate analysis of alternatives; and (v) help promote

efficient use of emerging climate funds.


20

71. Both the energy and transport sectors have started developing draft methodologies and

tools. The Energy sector at the World Bank is currently engaged with countries to develop low

carbon development strategies and to identify GHG reduction opportunities. Emerging results

show that structured engagement on growth and GHG mitigation brings benefits. In South

Africa, converting 1 million households and businesses to solar water heating reduces peak

demand by 700 MW; in Mexico, the main energy savings in the industrial sector can come from

co-generation and energy efficiency improvements. The Bank is also analyzing project-based

GHG accounting to understand emissions at the project level for traditional Bank-financed

projects.

72. Climate risk screening. The Bank‘s energy team is currently screening FY10 energy

sector projects to determine how EE opportunities in projects and/or country level programs can

be integrated, what additional technical and/or financial resources are required and where to

obtain them. The role of hydropower and multi-purpose water infrastructure were also

highlighted under the climate risk screening product. The Bank is in the process of developing a

risk assessment tool for screening (multipurpose) hydropower projects for climate risks, as part

of the Development and Climate Change Framework which will assist task team leaders to take

climate risks into account when preparing multi-purpose hydropower projects. The tool

addresses the two main climate-related issues that affect multi-purpose water infrastructure

sustainability: (a) impact of climate change on the hydropower system (safety, reliability,

economic and environmental viability, etc.); and (b) reservoir vulnerability to greenhouse gas

emissions (environmental impact assessment, reservoir management, eligibility for participation

in carbon trading).

73. Carbon Accounting. The objective of this study is to review, assess, and provide a

recommendation on methodologies for greenhouse gas accounting of transmission and

distribution projects. The study, along with GHG accounting work underway in other sectors,

will provide inputs to produce an informed recommendation on the future development or

application of GHG analysis tools that may be appropriate for Bank business models as pursued

by the SFDCC. Work on this study is ongoing and will continue through FY10.

74. The Climate Investment Funds (CIF) were approved by the Bank‟s Board of Directors

in July 2008 and represent a balanced partnership of contributor and recipient countries

implementing innovative climate financing through the MDBs to bridge the financing and

learning gap between now and a post-2012 global climate change agreement. A sunset clause

enables their closure once a new financial architecture has become effective under the UNFCCC

regime. Donor countries have made pledges of some $6.2 billion to the funds over a three-year

period. Comprised of two distinct funds, the CIF will provide grants and concessional financing

additional to existing Official Development Assistance. A blend of financial instruments –

grants, soft loans, guarantees - will be used in a tailored approach to achieve maximum impact of

a given program in a given country.

75. Under the Clean Technology Fund (CTF), the first three investment plans with the total

commitment of about $1 billion were endorsed for Egypt, Mexico and Turkey. The investment

plans present the countries' development strategies that have low carbon objectives, their

strategies for the utilization of CTF resource, and a business plan for the multilateral

development banks to assist country implementation. A number of investment plans are

currently under preparation: Kazakhstan, Morocco, Nigeria, Philippines, South Africa, Thailand,

Ukraine, Vietnam, and a regional program in Middle East and North Africa for scaling up


21

concentrating solar power. The first IBRD/CTF co-financed project -- Turkey Renewable

Energy and Energy Efficiency, with $500 million IBRD and $100 million CTF -- was approved

by the Bank's Board in Many 2009. Other IBRD/CTF co-financed operations under preparation

for Board approval in FY10/11 include: Mexico Urban Transport, Mexico Efficient Appliances

and Lighting, Egypt Wind Energy Development, Greater Cairo Urban Transport, and Turkey

Transmission projects.

76. As the first program of the Strategic Climate Fund (SCF), the Pilot Program for

Climate Resilience (PPCR) aims to pilot in highly vulnerable developing countries practical

ways to increase climate resilience in core development planning and budgeting, building on

National Adaptation Programs of Action, and to provide lessons for wider replication. Selection

of pilots in nine countries and two regions was based on advice of an independent expert group

that considered: transparent vulnerability criteria; preparedness and ability to move towards

climate resilient development plans; distribution across regions and types of hazards. Countries

invited to date: Bangladesh, Bolivia, Cambodia, Mozambique, Nepal, Niger, Tajikistan, Yemen

and Zambia. Two regional programs will be in the Caribbean and South Pacific regions.

Designs for a Forest Investment Program and a Program for Scaling Up Renewable Energy in

Low Income Countries both under the SCF have been launched.

77. Through the Bank‟s Treasury department, the Bank supported the flow of innovative

financing for “climate smart” investments, including through “WB Cool Bonds” (5-year, US$

denominated notes tied to Certified Emission Reductions (CERs) generated by specified GHG-

reducing projects in China and Malaysia), Green Bonds ($665 million through two issuances for

adaptation and mitigation projects) and Eco-Notes ($390 million in three transactions for ―green‖

activities).

2. Public-Private Partnerships

78. The World Bank is an active partner supporting public-private partnerships by

providing technical assistance to help develop robust legal and regulatory frameworks,

advising Governments on key concerns of investors to help attract additional competition into

the market for PPP investment. The Bank‘s role in supporting the public sector to become a

strong partner for PPPs was reaffirmed as a critical contribution to the sector, including the

launch of the PPP Global Expert Team (GET). Through projects, reimbursable technical

assistance, guarantee instruments and advisory services, the Bank supported clients to clarify

legislative and regulatory frameworks, identify key constraints to increasing investment flows in

PPP and propose possible solutions through legal and regulatory investments, improve the

institutional framework that supports the Government‘s management of the PPP process by

strengthening agencies responsible for PPP. The IDA-IFC Secretariat has also led and facilitated

attention throughout the WBG institutions of opportunities to collaborate and cooperate on the

PPP agenda, through deepened group consultations, such as those in response to the global crisis.

79. Bank-administered trust funds – PPIAF and GPOBA - have also been crucial to

support PPP efforts in developing and fostering an enabling environment for private sector

participation and competition in infrastructure. PPIAF approved $18.9 million in funding in

FY09 – a record year despite the economic climate. PPIAF is helping to put into place the

regulatory structure necessary for investment, and is continuing to push on its broad portfolio of

public-private partnership units, creating centers of expertise within governments for developing


22

and managing a pipeline of public-private projects. Annex B includes a few examples of recent

PPIAF activities.

80. Scaling up OBA. A recent review of the OBA approach, jointly undertaken by GPOBA

and the IDA-IFC Secretariat,6 has identified nearly 130 projects in the WBG with a total subsidy

value of about $3.3 billion (excluding the $2.7 billion subsidy funded by recipient governments)

that have been implemented or are underway and are expected to reach nearly 60 million

beneficiaries worldwide. GPOBA‘s vision is to mainstream the OBA approach with

development partners and becoming a Center of Expertise on OBA, rather than being a provider

of subsidy funds. The focus has shifted to dissemination and training and technical assistance for

scaling up rather than pilot project preparation compared to previous years. In FY09, GPOBA

concentrated on project supervision, beginning to draw lessons and develop best practice, and on

providing Technical Assistance to Governments to scale up OBA in a government‘s own

operations.

81. Mobilize local long-term currency funding for infrastructure. IBRD‘s AAA credit

rating can secure clients access to a full range of financial products with built-in risk

management tools in larger volumes, with longer maturities and at lower costs than many other

lenders. Specifically, IBRD has a long and proven track record of providing financing at

comparably long tenors, currently of up to 30 years. These long tenors are also complemented

by IBRD‘s capability to provide such financing in local currency in those markets where it can

efficiently intermediate currency exposure. Through this financing mechanism, IBRD helps its

clients to reduce or eliminate their exposure to currency risk. Thus and for instance, IBRD has

recently provided local currency financing in Mexico and Colombia with a tenors of 30 and 22

years respectively. In addition, Bank Guarantees in local currency are currently being

considered for several projects.

82. Support to financial intermediaries. The WBG has been providing technical assistance

and funding for the creation of market intermediaries to mobilize local currency financing for

PPP projects, for example in India and Indonesia (Annex B). The nature of these intermediaries

varies based on the capacity of the financial sector in the country in question.

83. Support to transaction preparation. Following its successful integration with the Bank,

MIGA and IFC‘s joint Foreign Investment Advisory Services (FIAS), MIGA‘s technical

assistance re-focused on scaling up and increasing its development impact in 2007. The new

Investment Generation (IG) unit has MIGA‘s mandate to provide technical assistance to increase

foreign investment flows to developing countries through reducing policy impediments and

providing support to governments to attract new investors and retain and expand existing

investments. Through FIAS, MIGA‘s technical assistance is facilitating new investments in

some of the most challenging business environments in the world, and is setting the stage for

innovative investments in sectors such as tourism, agribusiness, and services. FIAS‘s strategy

aligns with MIGA‘s, including emphasizing development of IDA-eligible and conflict-affected

countries, and a special focus on sub-Saharan Africa. The Bank has also provided support for

private investment, transaction preparation and project development through reimbursable

technical assistance and through its lending program. For example, support has been provided to

6 "Output Based Aid - A Compilation of Lessons Learned and Best Practice Guidance" issued in September 2009

http://siteresources.worldbank.org/INTSDNET/Resources/OBAReview_Final_Internal_Draft_Sep09.pdf


23

the Government of Senegal on the Dakar Diamniadio PPP Toll Road, one of the first toll roads in

SS Africa, which is being part-financed by an IDA SIL.

84. Design and structure transactions through credit enhancements, partial guarantee

facilities. Lack of access to reliable energy is a significant obstacle to economic development in

emerging markets, particularly for people and businesses living and operating outside of the

large urban centers. Traditional power sector models are based on large-scale, central generation

facilities accompanied by developed transmission and distribution (T&D) networks. They

therefore face restrictions in how they meet the energy needs of diverse segments of the market.

85. Facilitating the use of Bank guarantee support. The current financial crisis has

increased risk perception by private financiers towards infrastructure projects in developing

countries. Risk mitigation instruments like Bank guarantees are potentially important to support

flows of foreign direct investments. The Bank is involved in structuring credit enhancements

through its guarantee products as well as structuring financial solutions for client governments

for their infrastructure investments, for example by providing partial risk guarantees in the

privatization of the Albanian Distribution Company, OSSH and the Nigeria Energy and Gas

Improvement Project (See Annex B).

86. IDA mainstreamed its Partial Risk Guarantees (PRGs) in FY10, ending their ―pilot‖

status with a new risk management envelope of $1.5 billion, an increase from the previous pilot

program ceiling of $500 million. Bank guarantees have leveraged limited IBRD and IDA

resources by mobilizing project financing of much larger sizes, approximately ten times in the

case of IDA commitment. Whenever feasible, new projects are being developed jointly by the

WBG and there are projects being assisted by the IFC advisory team for which Bank guarantee

provision is being contemplated.

87. The Bank is also supporting the creation of separate legal entities to provide credit

enhancement to PPP projects. In Indonesia, the Bank is providing technical assistance, and is

discussing the provision of IBRD support, for the creation of a Guarantee Fund to ring-fence

Government liabilities associated with PPP projects and to help attract the expert staff needed to

manage the Government‘s contingent liabilities arising from PPP projects and to tailor credit

enhancement instruments to maximize leverage from Government support.

88. MIGA‟s knowledge and research products and outputs also contributed to expanding

PPPs in developing countries. This includes the launch of global PPP spotlight on FDI.net, with

the aim to promote PPP opportunities in developing countries to potential investors worldwide

through FDI.net's distribution vehicles, such as customized email services and electronic

newsletters. MIGA has also launched regional spotlight pages which focus on regional

developments in PPPs relating to regulatory environments, opportunities, and specific sectors in

which PPPs are being promoted. They have also launched a global directory of national PPP

agencies on FDI.net. These initiatives support ongoing partnership building with national PPP

agencies by promoting opportunities globally and in providing audiences for their knowledge

resources.

89. Direct leveraging facilities implemented through IFC. In response to concerns

expressed by emerging and industrialized countries‘ governments on the impact of the current

financial turmoil on the infrastructure sector, IFC worked with KFW and PROPARCO to launch

the ICF in April 2009. This initiative is designed to support private and PPP infrastructure

development throughout emerging markets and developing countries in order to stabilize viable


24

existing infrastructure projects with private participation which are facing temporary liquidity

problems, and enable some continuation of new project development in private infrastructure.

90. IFC‘s key role involves (i) setting up the investment Facility, (ii) mobilizing resources

from third parties to breach a gap in financing available for infrastructure projects, (iii)

leveraging IFC‘s own resources with those of like-minded investors to meet a larger portion of

infrastructure needs in emerging markets, (iv) enabling the development of much needed

infrastructure on a long-term sustainable basis, and (v) sharing its knowledge and investment

standards, including environmental and social performance standards, with the Facility,

governments and other investors. The Facility‘s additionality as part of the overall WBG crisis

response includes (i) alleviating liquidity risks in a sector dependent on longer-term funding and

whose immediate need is to obtain longer-term finance for projects with substantial roll-over

risk, and (ii) ensuring a minimum level of continued new project activity in a sector with

significant developmental impact.

3. Incorporating the Spatial Dimension of Development

91. The World Development Report 2009 (WDR 2009), Reshaping Economic Geography,

presented a cross-sectoral perspective of the spatial transformations needed for economic

development. It considered the combination of ―spatially blind‖ policies, connecting

infrastructure investments, and geographically-targeted incentives necessary for balanced

development in different types of countries and at different geographic scales. The ―spatial‖

cross-cutting theme therefore spans a broad range of topics that have, as their common thread,

the incorporation of geography and the spatial dimension into policy analysis and development

for growth and poverty reduction. It includes: looking at cross-country regional integration

efforts; understanding the geographic patterns of economic growth and poverty experienced by

countries, and developing the policies and investments necessary to address disparities in welfare

levels across country regions; and zooming-in on the subnational level, including developing

financial and operational solutions for urban and municipal problems. Again, at each of these

levels, infrastructure, in connection with other macro and sectoral efforts, can be part of

integrated, cross-sectoral solutions.

92. The geography of growth and poverty remains a great policy interest among clients. The

lessons from WDR 2009 continue to get traction in Bankwide strategies, in regional-level

analytical and strategic work, and in country-specific studies and operational work, providing a

platform to establish linkages between infrastructure and other sectors and themes at different

geographic scales:

Several Region-wide WDR 2009 companion reports have been produced. In EAP and

LCR, the launch of the WDR 2009 was accompanied by launch of regional applications

and discussions on the specific implications for Latin American and the Caribbean

countries. A MNA flagship entitled Rich Place, Poor Place: How Will MNA Overcome

Spatial Disparities, scheduled to be launched in Spring-Fall 2010, uses GIS and spatial

econometrics to develop a classification of lagging regions in MNA, applies the WDR

2009 framework to specific challenges facing MNA country policy-makers through a

political-economy perspective.


25

Studies of the developmental impact of cross-country infrastructure corridors, analyzing

alternative policies and investments to connect potential growth centers with regional and

global markets are being undertaken in Africa, Central Asia, and East Asia. 7

A SDN Flagship Report entitled Shrinking Distance: Identifying Priorities for Regional

Integration (FY09) developed methods for country-specific spatial analysis of growth,

including consideration of the impact of social and infrastructure policies and

investments, and a framework for policy prioritization. Applications have been

completed in collaboration between SDN and PREM for countries across most Regions,

including Egypt, Indonesia, Malawi, Mexico, Sri Lanka, Turkey, Uganda, and Yemen.8

The Urban Strategy, recently approved by the Board, includes the proposal of a new

diagnostic tool, called Urbanization Review, which will promote a cross-sectoral view of

the factors affecting urbanization patterns and the policies and investment choices that

may exert a positive influence on such geographic patterns.

93. Increased number of regional infrastructure projects. The WBG increased its overall

portfolio of regional integration projects by over 60 percent since FY08, committing a total of

over $370 million for infrastructure projects in FY09. The benefits of regional integration can be

seen across all aspects of infrastructure networks. For ICT and power it provides scale

economies that substantially reduce costs of production. Regional integration for continental

fiber optic submarine cables, for example, could reduce internet and international call charges by

one half. The Bank has supported regional power pools that allow the most cost-effective energy

resources to be shared across countries can reduce electricity costs by $2 billion a year, though

an in-depth QAG learning review is underway to assess WBG-supported regional power pool

projects which have not fared very well. For transport and water, regional collaboration allows

optimal management and development of cross-border public goods. Road and rail corridors

linking landlocked countries to the sea are an example of such a regional public good, as are

regional airport and seaport hubs.

7 Relevant work includes: Studies of transport corridors in Malawi-Mozambique (FY09) and Democratic Republic

of Congo-Republic of Congo (FY10); ―Expanding Trade in Central Asia by Connecting Markets‖ (Regional

ESW, FY10); and ongoing trade study of Mekong Sub-Region (PREM, FY09-10). 8 Relevant work include: An ongoing examination and country dialogue on spatial dimensions of public

expenditures in Egypt; ―Behind the Veil of Conflict: Moving Towards Economic Integration for Sustained

Development and Peace in Mindanao;‖ ―Malawi: Priorities for Reducing Transport Costs,‖ input to the FY09

CEM; ―Turkey: Issues in Municipal Finance and Regional Development‖ (FY10); ―Connecting Sri Lankans to

Prosperity‖ (ESW scheduled for FY10 completion); ―Uganda: Assessing the Role of Regional Industrial Parks‖

(FY08); and ―Yemen: Spatial Analysis of Rural Livelihoods‖ (FY09-10).


26

Figure 2 WBG Regional Integration Projects FY04-09

94. Limited regional integration has been a particularly binding constraint on Sub-Saharan

Africa‘s ability to accelerate export-led growth. Closer regional integration would help to tackle

some of the region‘s most stubborn supply-side constraints by enlarging markets, generating

economies of scale in infrastructure and public goods provision, providing sea access for

landlocked countries and facilitating greater integration with the global economy. Africa‘s

leaders and regional institutions have identified regional integration projects as being amongst

their highest priorities. The New Partnership for Africa‘s Development (NEPAD), functioning

under the auspices of the African Union, has promoted regional integration as a core objective.

NEPAD is encouraging the continent‘s Regional Economic Communities to pursue the creation

of unified regional economic spaces open to the rest of the world as stepping stones toward a

wider African economic space. In response, the World Bank established a Regional Integration

Country Department in 2004, which has overseen strong growth in the regional integration

portfolio.

95. IDA, IFC and MIGA are enhancing and strengthening their collaboration on regional

integration in order to leverage the private sector. Several joint projects have already been

approved in FY09 such as the Southern Africa Power Market APL, the Regional

Communications Infrastructure Program APL and the West & Central Africa Air Transport

Safety and Security Program APL (See Annex B).

96. Private sector participation also plays an important role in supporting spatial

integration. IFC increased the number of regional infrastructure projects in its portfolio. In

Central America, infrastructure investment remains among the most important challenges. The

region‘s ability to grow, compete, and reduce poverty is constrained by bottlenecks in the power,

water, road, ports and rail sectors. Services such as water and energy, which are essential for

modern industry and commerce which need to be improved. The infrastructure needs are

expected to become even more significant in the context of further regional economic growth

and integration. While the public sector still has a large role to play, private sector involvement

is required in order to address the infrastructure challenge. A key challenge facing developers of

private or public-private partnership infrastructure projects has been the availability of

subordinated debt and/or equity capital. This is particularly true in relation to multi-regional and

regional integration investments.

Source: WBG Staff estimates

Figure 1: WBG Regional Integration Projects FY04-FY09

0

100

200

300

400

500

600

700

800

900

FY04 FY05 FY06 FY07 FY08 FY09

US

D M

illio

ns

Non-Infrastructure

River Basins

Transport

Telecoms

Energy


27

97. Joint WB-IFC transactions with sub-national entities without sovereign guarantees in

FY09: The Sub-national Finance Program is a combined initiative of the World Bank and the

IFC. The primary objective is to help borrowers gain access to local financial markets and

improve their ability to deliver key infrastructure services such as water, transport, gas and

electricity, and education and health services. The program provides municipalities, provinces,

and their enterprises financing and access to capital markets, without sovereign guarantees.

Financial support to nationally owned enterprises operating in natural monopoly infrastructure

sectors is also provided on a selective basis. SIAP established a target of at least ten new

projects of this type. In FY09, the program committed six transactions, totaling $596 million

globally. These included the WBG‘s first direct engagement at the sub-national level in

Colombia, Panama, and Turkey without a sovereign guarantee, and three engagements in Russia.

4. Urban and Local Government

98. The urban sector has begun implementation on the initiatives highlighted in the SIAP.

The new Urban strategy – ―Systems of Cities: Harnessing the Potential of Urbanization for

Growth and Poverty Alleviation‖ – was released in November 2009 and designed around a

―system of cities‖ approach. Where larger cities often are the hosts of firms driving innovation

and service sector industries characterized by ―urbanization economies‖, medium-size cities

offer advantages to manufacturing firms, characterized by ―localization economies‖. Smaller

cities and towns offer markets for rural production and commerce among small businesses, often

helping facilitate the rural-urban transition. The strategy promotes ―wholesaling‖ approaches to

reach the growing populations in secondary cities, more responsive financing instruments, and

new knowledge products to strengthen capacity at the local level. It also promotes sustainable

urban development by linking cities to the climate change and energy efficiency agendas.

99. More developing countries are seeking Bank assistance in managing the urbanization

process. Countries like Vietnam face an average increase of 1 million new urban residents per

year who need to be absorbed in three urban centers. In response, the Bank is developing with

the OECD and other partners an Urbanization Review, which establishes a framework and

methodology for analyzing the current and future prospects for urbanization, including policy

responses. This new tool, which will be launched with the urban strategy and piloted in the

coming year, will review demographic trends, as well as transport, water and other infrastructure

response requirements, housing needs and land market conditions. It will consider the impact of

urbanization on the urban poor and help developing countries and cities better position

themselves to manage the urbanization process within a ―system of cities‖ approach. In

particular, such a strategic and proactive approach could help to avert increasing informality and

slum formation due to inadequate planning, constraints to land supply and rising housing costs.

100. WBG has revitalized its support to programs aimed at improving living conditions in

slums through extending affordable services to slum dwellers and investing in upgrading. Such programs can have enormous benefits in health outcomes, help cities to adapt to the risks of

climate change, reduce environmental and other risks, as well as in generate new employment

opportunities. Approaches using output based aid offer pro-poor incentives to utilities and the

private sector, or ensuring an enabling environment for small private service providers while

ensuring quality and affordability for consumers offer much potential. Going forward, the Bank

is partnering with Cities Alliance in exploring ways of scaling up to national level approaches.

In this context, the Bank aims to develop more policy-based approaches, through DPOs and


28

other instruments, which would tackle the difficult issues related to land and service delivery in

informal settlements that are current deterrents to slum upgrading. This would pave the way for

a more comprehensive approach to upgrading at the national level.

101. Municipal Development Projects (MDP) remain the Bank‘s principle instrument for

providing financing to countries seeking to support local governments. These instruments when

used in a wholesaling approach have been performing well. Their aim generally is to provide

financing for priority infrastructure, coupled with reform and performance incentives that in

many cases aim at bringing local governments to market-based finance over time. Their efficacy

is dependent on a well-defined reform program or set of performance measures often within a

framework of a national strategy for local government reforms. Municipal Contracts and

Performance-based Grants have been used effectively in some cases in securing national and

local government agreements on ex ante and ex post reform and reward measures. Other

wholesaling instruments include DPOs, which have been used effectively in the housing and land

sectors, with solid waste developing as a new sector policy area. It is anticipated that these

instruments will play an increasingly important role in the delivery of infrastructure and services

in urban areas.

102. Building Liveable Cities in Africa: The Africa region is preparing national level

urbanization studies for 12 countries focused on patterns of urbanization, state of

decentralization, and public spending and investment needs. The national-level strategies are an

important tool to identify priorities and provide recommendations to countries with varying

levels of urbanization.

103. As of today, 72 percent of the SSA urban population is facing poor living and slum

conditions. Over the next 25 years, there will be an additional 300 million urban residents in

Africa, the vast majority of which will have no alternative but to move to the slums. Much of

this housing is vulnerable to the impacts of natural hazards. A large portion of the housing stock

in SSA is built through the informal sector, not meeting minimum standards for building safety.

There is therefore an urgent need in the region to make urban settlements more resilient and to

mainstream hazard risk management in existing land use planning policies and practices, which

requires in particular that hazard zoning and mapping be integrated in the suggested land use of

an area or region, and include approaches such as retrofitting of existing housing stock and

ensuring building safety in new construction.

104. To address the immediate needs of slum dwellers, SSA is gearing up to invest in critical

urban services such as water and sanitation, solid waste treatment, electricity, and transportation

infrastructure, coupled with support to improved institutional capacity and municipal finance

systems.

105. Collaborative Capacity Building Program in Urban Management: In January 2009,

the Bank signed a MOU with the Government of Singapore with the aim of bringing together

Singapore‘s recognized expertise in urban development, city management, and public

administration with the Bank‘s global development knowledge and operational experience. The

mandate of the new Urban Hub is to help practitioners by providing state-of-the-art advice and

technical assistance focusing on practical solutions to major urban challenges. In the first year,

five areas of practice and collaboration will be established relating to city management, city

financing, urban design and climate change, and training programs.


29

106. A central issue in urban management is the inadequate or unequal provision of basic

infrastructure – water, waste disposal, and power – to urban residents. Urban lending

approvals for FY09 amounted to $2.1 billion, which is a 5 percent increase from the past fiscal

year. This includes 30 new urban operations across all regions (see Annex B).

D. Mainstreaming Sustainability as a Core Dimension of Infrastructure

107. The definition of sustainability has been significantly strengthened during the past

decade, from a rigorous approach focused on economic and financial sustainability to a triple

bottom line: economic and financial, environment, and social sustainability. Lessons from the

past 20 years of the Bank‘s engagement in infrastructure underscore that long-term sustainability

is gained through strong governance of the infrastructure services delivery: increased

transparency on public finance for infrastructure, results measurement to monitor the

effectiveness of infrastructure spending, and strong governance and anti-corruption plans for

each specific transaction and sector.9

108. The core infrastructure access agenda has remained a primary focus of SIAP and INFRA,

ensuring that improved access to infrastructure services is affordable to poor communities,

including inclusion on gender and disability. The WBG has continued to promote sustainability

of infrastructure services through a proactive approach to evaluate environmental and social

objectives—to ―do good‖ rather than ―do no harm‖—and will continue to promote strong

governance of infrastructure service delivery through close support to clients for achieving

stronger governance in the area of public and private provision of infrastructure services.

1. Environment: Build on IAP experience to mainstream environmental issues

109. Through SIAP, WBG made a strong commitment to promote the use of of Country

Environmental Analysis (CEAs) and Strategic Environmental Assessments (SEAs) as tools to

extend environmental assessment to strategic decision making related to infrastructure

projects. The World Bank Environment Strategy recognized CEAs and SEAs as key tools for

integrating environmental considerations into national development and sectoral decision making

and planning processes at early stages. For the Yiba Highway project in Hubei China, for

example, an SEA of the transport plan 2002-2020 of Hubei has been undertaken in 2008-2009.

As client countries are gradually adopting SEA legislation, the use of SEA in Bank activities to

support transport, water and energy development is also picking up, particularly, in Eastern

Europe, Central and East Asia. Also, ongoing work on piloting SEA in a range of different

regions is producing a rich experience in applying institution-centered approaches to

development policy lending, sector structural reforms, technical assistance, economic

integration, development strategies and large and complex development plans. Of the 24 CEAs

completed so far, 13 CEA‘s have been completed since 2007, 16 more are currently underway

and several others being planned in all regions of the Bank. In several CEAs, environmental

issues linked with infrastructure sectors are priority areas (for example, transport and water

quality were priority sectors within the ongoing Jordan CEA. The India CEA (2007) focused on

9 ―Scaling Up Infrastructure: Building on Strengths, Learning from Mistakes,‖ Infrastructure Network, January

3, 2006.


30

mainstreaming environmental concerns into highways, medium-sized industrial firms and energy

production subsectors. Some CEAs have also contributed to identification of lending operations

in infrastructure sectors (for instance, solid waste management project in Tunisia). However,

there remain difficulties in systematically monitoring how and to what extent CEA analysis and

recommendations are actually used by infrastructure TTLs.

110. Special focus on environmental objectives in urban areas. An estimated 360 million

urban residents live in coastal areas, thus increasing their vulnerability to climate change-induced

storm surges and rising sea levels. Cities account for about two-thirds of total energy use.

Energy efficiency can offer practical solutions to budget-constrained cities in meeting their

energy needs without sacrificing their development priorities. A substantial program has been

developed in the past year on cities in climate change. The Urban Research Symposium was

held in Marseille in June 2009 with over 650 researchers and practitioners. The Symposium

included presentations from more than 150 authors with a number of side events on issues

related to cities and climate change. A follow up event is planned in the Bank for September.

The Eco2Cities: Ecological Cities as Economic Cities, a new program launched in FY09, aimed

at helping cities in developing countries achieve greater ecological and economic sustainability.

The program will provide practical and scalable, analytical and operational support to cities. The

program also aims to build a global partnership among forward-looking cities in developing

countries, global best-practice cities, academia, and international development communities.

111. Scaled up use of economic and financial tools such as payment for environmental

services and green accounting. The World Bank constructs genuine savings accounts for all

countries annually and wealth accounts approximately every five years. However, in FY09,

these tools were not systematically included in infrastructure projects. Measuring performance

of the SIAP with respect to this criterion is difficult for a number of reasons: (i) World Bank

project information systems do not automatically track project components dealing with the

criterion, (ii) opportunities for payments for environmental services (PES) schemes are quite

limited in the infrastructure sector, and (iii) ‗green accounting‘ is a tool that is usually applied at

the macro level rather than the project level. There are, nonetheless, two interesting examples of

work carried out in FY09:

In the Lao Republic the forthcoming Country Economic Memorandum uses green

accounting methods to value the underlying asset, the flow of water in the Mekong River,

which underpins the Nam Theun 2 hydropower project and discusses the issue of

managing the resource rents that will be generated by the export of hydropower.

In the Brazilian state of Espirito Santo the Additional Financing Espirito Santo Water &

Coastal Pollution Management project is linked to a PES scheme being implemented

under a GEF grant, Espirito Santo Biodiversity and Watershed Conservation and

Restoration. The water supply and sanitation institution receiving the finance under the

first project, CESAN, will pay landowners in the upper reaches of the watershed to carry

out land management practices that will preserve natural water regulation services and

reduce runoff of sediment into waterways. This has significant financial benefits for

CESAN.

112. With regard to the broader question of applying economic valuation to environmental

factors in the analysis of infrastructure projects, it is notable that OP10.04 on Economic

Evaluation of Investment Operations explicitly requires that all externalities be valued in the


31

project analysis. However there is no systematic way to identify the extent to which this aspect

of the OP is being applied in infrastructure projects, short of an extensive desk study.

2. Social

113. Systematizing social analysis and promoting inclusive community and stakeholder

participation. To enhance the inclusion of social dimensions in Bank-financed projects and to

promote knowledge sharing and dissemination of methodologies and good practices, the Social

Development Department launched a Thematic Group on Social Dimensions of Infrastructure.

Through this Thematic Group a booklet on Social Development and Infrastructure was prepared,

several meetings where specific cases were presented and discussed were conducted and a

website that includes case studies, methodologies, and different resources for each infrastructure

sector was designed.

114. Recent projects which have incorporated strong social components as part of a triple

bottom line approach include: the Dominican Republic Electricity Distribution Rehabilitation

Project, which includes a stand-alone social component, and the Azerbaijan Rural Investment

Project (AzRIP), which places community participation at the center of sub-project selection and

implementation (See Annex B).

115. Expanding benefit sharing beginning with Hydropower. Hydropower, as a renewable

source of energy, is increasingly recognized as a key player in climate change mitigation. For

that reason, investments in hydropower are being scaled up after a hiatus of roughly a decade.

However, hydropower projects face strong resistance due to past environmental and poor social

practices and legacies. Since hydropower projects could also play a key role in providing

multiple opportunities to enhance development benefits to local communities, the Water Anchor

and the Social Development Department prepared a joint work program to enable the

mainstreaming of an operational framework for benefits-sharing in order to enhance the

development benefits to local communities in World Bank-financed projects. The first activities

were conducted in FY08-09 and additional activities will continue this fiscal year, eventually

resulting in preparation of a guidance note and a toolkit.

116. WBG adopted a Gender Action Plan in 2006 that focuses on economic sectors,

especially infrastructure, and committed to operationalizing it under SIAP. The Social

Development Department (SDV) continued to support task teams and monitor the progress of

gender integration in infrastructure and an FY09 review indicates increasing trend of gender

integration and actions. In FY09 and FY08, nearly 39 percent of the World Bank infrastructure

projects have identified gender dimensions and 25 percent included actions to reduce disparity

and increase economic opportunities of women. These levels represent a significant increase of

gender equity actions compared to 15 percent in FY07, and 6 percent in FY06 (baseline).

117. Commitments to projects with gender targeted activities have improved; these increased

from 19% in FY08 to 26 percent in FY09 for all projects. For IDA projects, commitment to

projects with gender actions increased from 39 percent in FY08 to 49 percent in FY09. IBRD‘s

improvement in commitment to projects with gender action rose from 7 percent in FY08 to 21

percent in FY09. Out of 113 total projects in FY09, the most prevalent methods were gender and

social analyses and inclusive consultation, while 28 projects included gender actions; and 9

projects incorporated gender responsive monitoring and evaluation.


32

118. AFR had 45 percent of its projects using gender targeted activities, while 55 percent used

at least one gender method. MNA also scored well for gender activities – 67 percent of MNA‘s

IDA projects had gender targeted activities. In sectors, Water and Transport had the highest

number of projects with both gender activities and other gender methods. In Water, 57 percent

projects had at least one gender method and 33 percent had gender targeted activities. In

Transport, 44 percent projects had at least one gender method and 34 percent had gender targeted

activities. The Yemen Rural Energy Access Project, which was cited as best practice in gender

integration, includes participatory implementation and M&E process, with both men and women involved

throughout implementation. (See Annex B)

3. Governance

119. Support to ensure access to quality, affordable infrastructure services through

improved governance: Governance and institutional development has long been central to the

infrastructure agenda. According to IEG, the percentage of projects with substantial or higher

institutional development impact across energy and mining, Water and Transport climbed from

an average of 47 percent 1998-02 to 63 percent 2003-7, 8 percent higher than the Bank average.

Similarly, the recent Quality Assurance Group‘s (QAG) Governance and Anti-Corruption (GAC)

benchmarking exercise ranks two thirds of urban sector projects responsive to GAC concerns,

considerably ahead of the Bank average.

120. Sectoral translation. In the water and energy sectors, improving corporate governance at

the utility level has largely been undertaken through establishing regulatory frameworks,

improving the customer interface, benchmarking initiatives, or establishing revenue management

systems. In the transport sector, GAC focused measures have emphasized working with road

maintenance authorities to improve contract monitoring and oversight and strengthen budget

management. In the urban sector the strengthening of GAC has largely been approached through

municipal and budgetary reforms to improve delivery of key services.

121. As infrastructure projects scale up, GAC is increasingly being addressed through lending

that is characterized by long-term engagement and heightened attention to transparency,

participation and development outcomes that are supported by the development of sectoral

institutions. The value added of moving away from short-term engagements and budgeting

mechanisms based on the project cycle was affirmed in India, where a review of governance

approaches adopted under traditional highway projects highlighted the need to strengthen

country systems and oversight mechanisms for quality control and accountability frameworks.

Based on these recommendations the Bank has revised its model of engagement with India in the

transport sector.

122. The Governance and Anti-Corruption in Infrastructure Advisory Program („GAC

Squad‟) was established in FY09 to accelerate the mainstreaming of governance and anti-

corruption in infrastructure operations. Administered by the Energy, Transport, and Water

Department, the GAC Squad supports World Bank project teams by providing expertise to foster

‗learning-by-doing‘ and through knowledge dissemination. Three sourcebooks on Deterring

Corruption and Improving Governance in the electricity, water supply and sanitation and roads

construction and maintenance sectors were launched in FY09 with a series of learning events for

sector specialists and staff working on the GAC agenda.

123. Direct operational support is being provided to task teams across infrastructure sectors

and regions to strengthen governance within sector institutions by improving transparency,


33

accountability and participation: in the water sector in Brazil, Paraguay, Uzbekistan &

Tajikistan; in the transport sector in Kenya, Kazakhstan & Armenia, Bosnia & Herzegovina; and

in the energy sector in Haiti. Issues being addressed include (i) establishing third party

monitoring for road construction and maintenance; (ii) increasing accountability of water

utilities to their customers by enhancing outreach and complaint redressal mechanisms; (iii)

improving operational efficiency, transparency and accountability of power and water utilities

through improved performance monitoring; and introducing an innovative governance filter

which provides measurable and actionable indicators to address governance and anti-corruption

issues in transport sectors. ―Soft touch‖ advisory services are also provided to project teams, as

well as knowledge products and learning events.

124. The Construction Sector Transparency Initiative (CoST) and the Extractive Industries

Transparency Initiative (EITI) are global initiatives, which support WBG client countries to

improve governance through increased transparency. CoST aims to enhance the accountability

of procuring entities and construction companies for the cost and quality of public sector

construction projects, by improving transparency to a broad range of stakeholders. CoST is an

international multi-stakeholder initiative, which was launched in May 2008 and receives support

from the Department for International Development, private sector construction companies and

associations, civil society organizations and financial investors, as well as the Bank. Pilot and

implementing countries include Vietnam; Tanzania; Zambia; Philippines and the UK. Although

the starting point is for countries to recognize the value of transparency at all stages of the

construction project cycle, the initial focus of CoST is on the period from contract award through

to final build, to allow questions to be raised about outcomes and how the overall procurement

process is being managed.

125. The EITI promotes and supports improved governance in resource-rich countries through

the full publication and verification of company payments and government revenues from oil,

gas, and mining. As a voluntary association of stakeholders with shared goals, the structure of

the global EITI movement has been open and participatory with a broad range of stakeholders.

About 30 countries participate in EITI. In 2008 the report, Implementing the Extractive

Industries Transparency Initiative: Applying Early Lessons from the Field was launched.

126. Improved public finance and fiscal management of infrastructure. Improving the

efficiency of public spending and using it to better leverage private sources is an important for

improving services in the Bank‘s client countries. An important element in addressing this

challenge is scaling-up analytical work relating to fiscal policy and public finance. This requires

increasing the scope and quality of infrastructure analysis in country level economic sector work

as these products often form the foundation of policy based lending.

127. The Bank developed a program to examine public finance and fiscal management of

water infrastructure by undertaking in-depth public expenditure reviews while advising the

Africa region on rural water supply and sanitation. These in-depth case studies serve as tools to

track and evaluate the allocation of fiscal resources to the water sector as part of the larger Public

Finance agenda of the Water sector. It is expected that these tools can help to improve

governance by formulating and implementing better informed public sector reform measures in


34

general, improving the efficacy and efficiency of public expenditure and service delivery

mechanisms, and supporting specific water reform interventions.10

128. Improved results measurement of infrastructure services. The Bank‘s Water sector is

also working on different tracks to improve results measurement in the water sector, such as:

development of M&E Toolkits for Water and Sanitation Projects and for Agricultural

Water Management Projects in FY0911

;

organizing workshop in regions to undertake M&E in Bank projects;

development of the International Benchmarking Network for Water and Sanitation

Utilities (IBNET) in collaboration with WSP to assess performance of water utilities on

an annual basis to be able to report on trends;

leading the effort to define core indicators for the water and sanitation sector to improve

results measurement in Bank project reporting.

129. For transport, intermediate indicators for projects and programs are being mainstreamed

as a result of the dissemination of the Transport Business Strategy. The Transport Sector Board

will follow-up on operational implementation as part of regular portfolio monitoring activities.

Program impact evaluations for selected programs will follow. Comprehensive evaluation of

experience with SWAPs will be undertaken in FY10. As per the second long-term development

plan of SSATP, approved in November 2007, an independent strategic review of the program is

planned to be undertaken in 2010.

E. Leverage Finance

130. During the implementation of SIAP, WBG has continued to pursue opportunities to

maximize its financing through: (a) increased leveraging of private financing for infrastructure,

using a number of approaches and instruments that range from stepped-up increased technical

assistance to governments to structure private transaction, to innovative instruments and

pioneering transactions, indirect financing through infrastructure funds, and to strengthened local

banks and capital markets; (b) increased advocacy to mobilize additional donor financing; and

(c) increased efforts on aid harmonization among donors for infrastructure.

1. Public and private financing leverage through WBG financing

131. During FY09 the WBG exceeded the SIAP and INFRA targets for scaling-up finance

and advisory services for infrastructure. In FY09 the WBG committed $21.6 billion in the four

core infrastructure sectors. IBRD/IDA delivered $18.3 billion, above the INFRA target of $15

billion/year, and leveraged an additional $30.3 billion. IFC‘s lending and equity commitments

totaled $3.2 billion, leveraging $22.1 billion dollars from other sources. MIGA provided $108

million in guarantees. Infrastructure exposure remained high at 35 percent, illustrating that

investors clearly believe that the agency has a comparative advantage in supporting complex

infrastructure investments.

132. Expanded use of risk management/treasury products. IBRD‘ full array of financing and

risk management products, associated with technical assistance, are offered to better manage the

10

In FY09, a water sector PER was delivered for Tanzania by the Water Anchor that was presented and discussed

with water sector stakeholders in the country as well as with the Ministry of Finance as input to the development of

their budget guidelines. This Public Expenditure Review is available at http://go.worldbank.org/D672USW8A0 11

Water and Sanitation M&E Toolkit is available at http://go.worldbank.org/CMGC0I9ZX0

http://go.worldbank.org/D672USW8A0

http://go.worldbank.org/CMGC0I9ZX0


35

financial risks relating to currency, interest rate, roll-over and commodity price volatility.

IBRD‘s financial products and services are becoming increasingly streamlined within the World

Bank‘s country and project engagement, adding another important pillar to its broader

development agenda.

133. Catastrophe risk financing is an important part of the strategic framework for disaster risk

management advocated by the World Bank Group. A comprehensive disaster risk management

strategy, involving risk assessment, institutional capacity building, risk mitigation investments,

emergency preparedness and catastrophe risk financing, can be very effective in mitigating the

devastating effects of natural disasters. Thus, IBRD offers risk management products and

advisory services such as DPLs with a Catastrophe Deferred Drawdown Option (DPL DDO),

Sovereign Catastrophe Insurance Pools, Catastrophe Bonds and Weather Derivatives.

134. WBG also supported direct leveraging of private sector financing by supporting joint

ventures with Financial Intermediaries. The Bank supported a number of financial

intermediaries through technical assistance and its financial instruments, for example the

Indonesian Infrastructure Finance Facility (IIFF), the India Infrastructure Finance Company

Limited (IIFCL), and the Investment Promotion and Financing Facility (IPFF) of Bangladesh,

the Portfolio Approach to Distributed Generation Opportunity (PADGO) Sri Lanka and the

Renewable Energy Mezzanine Facility, an innovative pilot facility for supporting RE generation

through existing IFC client banks in the SECA and CEU regions (See Annex B).

135. In the Funds sector, the IFC‟s Global Infrastructure and Global Funds Department

have together partnered to undertake several initiatives, including equity investments to

leverage private funding for the China Environment Fund III dedicated specifically to climate

change, the Helios Fund III for investments in Africa for infrastructure-related projects, the

Macquarie India Infrastructure Opportunities Fund for investments in a portfolio of

infrastructure assets located in Europe and Central Asia, and the Asia Environment Partners

(AEP) for investments in renewable energy. In FY 2009, IFC InfraVentures signed four joint

development assignments (JDAs) for $10.5 million in Rwanda, Nicaragua, Tajikistan and

Madagascar. The deepening of local capital markets has been supported through IFC‘s Global

Financial Markets (See Annex B).

136. Exploring use of WBG risk mitigation products to create financially efficient asset

backed securities. In light of the links between securitization and the sub-prime crisis, it is clear

the WBG will need to very cautiously and strategically move forward with the use and

development of such financial products. The difficulty in valuing these securities also raises

many complexities. The American Securitization Forum expects $130 billion in US asset-

backed securities (which excludes mortgages) in 2009 compared with $140 billion in 2008 and

$750 billion in 2006. Thus, while the use of these products has been limited, the WBG will

continue to develop viable products that can be used in the developing world.

2. Donor Financing

137. Scaled up support on cross-cutting trust funds such as the Global Facility for Disaster

Reduction and Recovery (GFDRR), the Climate Investment Fund and GPOBA. The GFDRR

has supported disaster risk reduction in vulnerable developing countries through upstream

analytical work and evidence-based country policy dialogue, studies to assess disaster risks, the

adequacy of existing institutional mechanisms, and the capacity to manage those risks,

formulating and implementing risk-reducing sector development policies, policy changes in the


36

design and administration of social safety nets to protect vulnerable populations, and developing

unique risk financing instruments, amongst other support. Due to GFDRR‘s promising early

results, the World Bank decided to elevate its commitment to this partnership in FY09, including

its annual $5 million contribution in its long-term grant funding program. Other donors also took

notice of the accomplishments of this partnership on many fronts. To date, the GFDRR has

received $75.2 million in contributions from its donors, including Australia, Canada, Denmark,

European Commission, France, Italy, Japan, Luxembourg, Norway, Spain, Sweden, Switzerland,

the UK, and the World Bank.

138. Through the CIF, the WBG leveraged donor countries to pledge $6.2 billion over a

three-year period. Comprised of two distinct funds, the CIF will provide grants and

concessional financing additional to existing Official Development Assistance. A blend of

financial instruments – grants, soft loans, guarantees - will be used in a tailored approach to

achieve maximum impact of a given program in a given country. Similarly, GPOBA has also

scaled up its activities in FY09 throughout the WBG sector operations and has set a goal of

mainstreaming the OBA approach with development partners.

139. The ICF, launched by IFC as part of the WBG crisis response is leveraging funding

from DEG and the EIB. On October 5, 2009 DEG and EIB announced their intention to support

the ICF and have signed a Memorandum of Understanding (MOU) to that effect. The ICF has

three components: a Debt Component, an Equity Fund and an Advisory Component. The $4bn

Debt Component of the ICF has two windows: a Debt Pool and Parallel Co-financing Programs.

The Debt Pool is now ―open for business‖ and the review of several projects is in process. A

first approval has been given to SSIT, a Vietnamese Port project and other projects are under

Early Review consideration by the Debt Pool and Co-Financing Facilities.

3. Harmonization among Donors

140. The WBG contributed to global fora on aid harmonizing policies. In September 2008

the Bank organized the Accra High Level Forum along with the Government of Ghana and the

OECD-DAC. The resulting Accra Agenda for Action (AAA) includes government and donor

commitments related to improving ownership, partnership and managing for development

results. Based on the commitments made in the AAA, OPCS presented an Aid Effectiveness

Action Plan for the Bank to the Board in March 2009. A key thrust of the Bank's Action Plan is

to involve new and emerging donors, particularly non-DAC and global funds, in efforts to

improve aid effectiveness. One of the nine roundtables during the Accra High Level Forum also

discussed "Sectoral applications of the Paris Declaration in health, education, environment,

agriculture and infrastructure.‖

141. INFRA has facilitated collaboration amongst development partners on crisis response

in infrastructure. The First INFRA Forum, co-hosted by the Bank and the European

Commission, was held in Brussels in July 2009 with over 100 participants representing MDBs

and IFIs. Information was exchanged on project pipelines and diagnostics and opportunities

identified for greater collaboration on crisis response. INFRA has facilitated follow up

exchanges between Bank operations staff and development partners and has disseminated

guidance notes, information on crisis response initiatives, projects, diagnostics and interesting

developments through the INFRA website and e-mail bulletins.


37

142. The INFRA launch indicated that the WBG convening and mobilization role is highly

valued among development partners. In a sector that is of high demand and under acute stress

during the global financial crisis, the initiative provide a collaboration opportunity for

development partners to support growth and sustainability in development countries through

core, better designed and operated infrastructure services. While this role is not always

quantified in measurement terms, it will continue to remain an important role for the World Bank

Group and appreciated by development partners.


38

III. IMPROVED RESPONSIVENESS TO CLIENT AND STAKEHOLDER DEMANDS

143. Effectively delivering on the multifaceted infrastructure assistance priorities outlined

under SIAP requires a high degree of responsiveness and agility on the part of the WBG. The

WBG has continued to look for ways to improve the institution‘s flexibility and agility to

respond to the needs of our clients within its resources by: (i) reviewing and adjusting WBG

organizational responses, such as the SDN integration, to strengthen focus on financial,

environmental, and social sustainability; (ii) mainstreaming joint work by WBG institutions; (iii)

reducing the non-financial costs of doing business; and (v) enhancing monitoring of WBG

contributions to sustainable development in infrastructure.

1. SDN Integration

144. The SDN integration has strengthened the WBG capacity to support its clients in

addressing cross-cutting issues and themes that affect infrastructure service delivery. SIAP

recognized the necessity for strengthening staffing levels and skills in core sectoral disciplines

and for addressing cross cutting priorities through a combination of approaches throughout the

WBG, including (a) focusing management attention and incentives on building multi disciplinary

and multi-sectoral teams (b) providing cross network support/exchanges and expanding joint

learning programs; and (c) augmenting existing staffing through external recruitment, staff

exchange programs and secondments.

145. To date, almost 300 SDN staff have participated in the Sustainable Development

Leadership Program (SDLP), which was created to ensure that Management and senior staff are

grasping the breadth of what integrated structure is meant to achieve. There are now over 90

cross-sectoral tasks involving two or more SDN Departments. On some topics, like climate

change and, increasingly, water, there is strong collaboration. There are also many other areas

where two or more departments are working more closely together (e.g. urban and social

development, agriculture with water, and energy with transport), but this could be further

enhanced in selective areas. Sector and Program Managers have endorsed using Results

Agreements and OPEs to highlight these integrated tasks and encourage time recording against

them.

2. Mainstreaming joint WBG work

146. SIAP called for a continued increase in joint work across the WBG, with strengthening

and systemization of coordination at the project and transaction level (sub-national business,

PPPs, and advisory services. The IDA/IFC Secretariat was expected to be strengthened to

increasingly leverage private investment in IDA countries, particularly through PPPs in

infrastructure; scale up of regional and sub-regional projects; expansion of the menu of

financing and risk management options; and piloting and ramp up of innovative financing

options for the private sector, including OBA and guarantees.

147. There has been an increase in joint WBG engagements. Coordination between regional

teams is now occurring more frequently in all the regions. In addition, there has been an increase

in the number of projects that combine Bank and IFC instruments: in FY09, sixteen joint

investment projects were committed. Alongside these investment projects, there were also 125

active joint advisory projects in IDA countries in FY09, combining instruments in ways that


39

deliver better outcomes for member countries. One example of such collaboration is support to

the Uganda Umeme electricity distribution company, supported by IFC, MIGA and an IDA

Partial Risk Guarantee. (See Annex B). Box 3.1 below highlights Lighting Africa, another

significant joint WB-IFC initiative.

148. Reviews have been undertaken of the sub-national business, PPPs, and advisory services

to identify how different parts of the WBG can engage more efficiently with clients on common

product lines and provide options to address any potential conflicts of interest. A joint Bank,

IFC, and MIGA task force addressed the issue of potential conflicts of interest in joint work and,

based on the recommendations, the three WBG institutions agreed to expand the mandate of the

WBG Conflicts of Interest Office to cover all inter-institutional WBG business conflicts. Interim

staff guidelines for managing non-global product group business conflicts of interest were also

issued. A WBG working group is assessing the experience with the range of Bank guarantees

and another review has made recommendations about use of the IBRD enclave guarantee in IDA

countries.

149. The IDA-IFC Secretariat has been addressing the main constraints to joint activity at

three levels: the institutional policy and systems level, the strategy formulation level, and the

project level. Joint teams have worked to address these constraints, and progress on all three

levels has been encouraging and systematic. A WBG working group developed guidelines on

how to apply differing WB and IFC institutional policies and procedures in jointly financed

projects. These guidelines are now operational and are incorporated into ongoing training. For

example, two distinct environment and social safeguard systems previously created confusion

and delay in jointly financed projects.

150. At the project and product level, progress has been made over the last 12 months to

increase joint activities for PPP scale up. PPIAF has prepared a preliminary assessment of the

use of PPPs in IDA countries over the last decade and how the Bank and IFC might best

collaborate. Increasingly IFC‘s infrastructure advisory services and the World Bank‘s advisory

services through PPIAF are coordinated; PPIAF finances assistance with non-transaction,

Box 3.1: Lighting Africa – a joint WB-IFC Initiative

Lighting Africa is a joint WB - IFC initiative that supports the private sector to develop, accelerate, and sustain

the market for modern off-grid lighting technologies tailored to the needs of African consumers. During recent

months, the program published the results of its Market Research on consumer preferences and willingness to pay

for low cost CFL and LED lighting in non-electrified areas in five African countries. In June 2009, the program

delivered on its Solar Lantern Testing and Certification work, which tested 10 different solar lanterns with the

goal of improving product quality and increase consumer awareness and confidence in new-to-market lighting

products and services. The Lighting Africa Development Marketplace grant competition awarded about $3

million in seed capital for 16 innovative off-grid lighting projects in 11 Africa countries in May 2008, and

implementation is underway.

Under the Lighting Africa initiative, the following studies have been delivered by the Energy Anchor during

FY2009: Recharging fees for Lamps, Lights for Life in Sub-Saharan Africa, Village Lighting Solutions to

Improve Education, Health and Safety, One Child One Solar Light, Power to the Poor Off-grid listing from

Cassava Waste, Lighting the Way, Family Pedal Power and Lighting Project in East Africa, and Providing

Affordable and Reliable Solar Systems.


40

upstream activities such as feasibility and option studies, contingent liability diagnostics, legal

and regulatory reform, and policy change, while IFC infrastructure advisory services provide the

downstream transaction assistance needed to close or restructure deals. The establishment of the

IFC InfraVentures fund has provided an additional tool for developing PPPs and private

infrastructure projects in IDA countries. IFC and IDA have joined together to support OBA

schemes, with IDA financing subsidies to mobilize private sector involvement to bring efficiency

and market discipline while serving poor areas and IFC advisory services taking the lead in

designing the business transactions and selecting the contractors to run the businesses for

governments in IDA countries. IFC investments can also play a large role by supporting the

businesses with capital.

151. In August 2006, the Board approved a 3-year pilot to test the viability of joint

Bank/IFC delivery of sub-national finance without a sovereign guarantee. The indicative

investment target was $800 million over the three years, while actual investments reached $745

million. A Board Technical Briefing in March 2009 reported positively on overall progress, but

also identified barriers that need to be addressed in order to enhance the program‘s ability to

grow. Management decided to continue the pilot while exploring options for scaling up.

3. Reducing non-financial costs of doing business

152. SIAP recognized the need for reducing non-financial costs of doing business and called

for specific action on (a) streamlining internal procedures, (b) supporting expansion of country

systems pilot and reform for rationalization of lending policies, (c) systematically increasing the

usage of the Bank‘s financial and structuring capacity and products for transactions packaging

for priority sectors, and (d) mitigating sovereign and natural catastrophic risks through risk

instruments such as weather derivatives.

153. High priority sub-sectors in infrastructure have partnered with OPCS to streamline

internal procedures. Investment Lending reform proposed a stronger focus on results: (1)

adoption of a risk-based approach for processing IL; (2) a consolidated and rationalized menu of

IL; (3) greater emphasis on supervision and implementation support (IS); (4) actions to provide

an enabling environment for supporting and reinforcing the implementation of the reforms; and

(5) policy framework simplification and revision. Going forward, in FY10, the WBG will roll

out the new risk framework and governance system. During the roll-out, existing risk framework

definitions, guidance questions, and illustrative examples will be further developed and tested.

In addition, the expedited process for low-risk operations will be further developed, through a

comprehensive review of existing process steps for consolidation or elimination.

154. The World Bank is increasingly utilizing its financial and structuring capacity to

support client countries hedging against major risks related to interest rates, currency risks,

commodity price fluctuations or even catastrophic events. As explained earlier, the World

Bank has provided support to countries on management of their sovereign debt portfolios‘

management strategies or linked to a specific sovereign debt transaction. World Bank Treasury

has continued to enhance the assistance to client countries in this field but these financial

transactions are not specifically or necessarily linked to sectoral investment lending.

Complementarily, IFC has been actively supporting both client countries and private sector

developers advising both on the financial aspects of infrastructure development and the

structuring of its funding as well as lending and/or apportioning equity.


41

155. The WBG operations on catastrophe risk financing are part of a broader proactive and

strategic framework for Disaster Risk Management to help mitigate sovereign and natural

catastrophic risks through risk instruments such as weather derivatives. The underlying

principles of the strategic framework are that the economic impact of disasters can be reduced by

advance planning and cost-effective investment. The disaster risk management framework

includes risk assessment, institutional capacity building, risk mitigation investments, emergency

preparedness, and catastrophe risk financing. The WBG has promoted three complementary

business models to assist member countries in the financing of natural disasters. Through

Market Facilitation, the WBG provides technical assistance and capacity building to member

countries to facilitate access to catastrophe reinsurance and capital markets. Through Market

Intermediation, the WBG allows member countries to place sovereign catastrophe risk on capital

markets. Through Capital Provision, the WBG offers contingent lending products to the IBRD

countries and provides equity in private insurance and reinsurance companies in developing

countries. Climate risk management products include the Caribbean Catastrophe Reinsurance

Facility and Weather hedges. The World Bank completed the inaugural sale of CERs for the UN

Adaptation Fund in May and June 2009 raising $20.2 million.

4. Enhancing Monitoring of WBG Contributions to Sustainable Development in

Infrastructure

156. Increase WB-IFC-MIGA joint engagements for monitoring. SIAP and INFRA were

initiatives launched in FY09 that seek not only to leverage additional infrastructure financing,

but also to monitor the WBG‘s contribution to development through sustainable development.

Through INFRA, the Bank monitors the extent and effectiveness of its response to the crisis by

reviewing and reporting on several parameters including (i) information on infrastructure lending

approved by the Bank and the size of the Bank‘s infrastructure pipeline; (ii) co-financing and

parallel financing provided by partners; (iii) quantitative and qualitative information on

additional lending resulting from INFRA; (iv) concessional finance mobilized to support project

preparation, diagnostic work and cross learning on crisis response; (v) crisis related diagnostic

work underway or planned; (vi) implementation support materials and activities; and (vii)

information on impact on infrastructure spending in client countries and on partners‘ crisis

response programs/stimulus packages related to infrastructure.

157. Formulate pilots of innovative methods of data collection conducted; emerging lessons

reviewed and disseminated; scale-up strategy. A review of the use of sensing methods for

collecting results on infrastructure and other sustainable development areas has been carried out.

On-going pilots in the Bank have been identified and reviewed. Lessons have been disseminated

in several training events for staff. Driven by progress in information technology, the

capabilities to analyze sensing data efficiently and to link it with other data through geo-

referencing have rapidly been improving. Hence, the use of satellite data has become

increasingly feasible for large geographical areas in matters like water resources management

and road access. Other sensing techniques are successfully used to measure project-level results

like water leakage or road condition.

158. In order to improve the ability to capture, aggregate, and report on the results achieved

through IDA‟s support, the Bank is adopting core sector indicators. This information would

complement more detailed project-specific results data, as well as country and sector results data.


42

On July 1, 2009, standardized Core Sector Indicators were launched to be applied to relevant

investment operations for the education, health, road transport, and water supply sectors.

Systems changes were made to facilitate the collection and aggregation of data through the

Implementation Status and Results Report (ISR) template. Since July 1, 2009, an effort has been

made to apply the core indicators to IDA-supported operations approved under IDA14 (FY06-

FY08) and IDA15 (FY09). Of the 261 operations in the IDA14-15 active portfolio, task teams

have found that the core indicators in these four key sectors apply to 184 operations. The data

collected so far is based on readily available information and these indicators have not yet been

incorporated into country monitoring and evaluations systems. It must also be noted that many

projects have only recently started implementation. Nevertheless, these early results are

encouraging, and show that IDA has already contributed to the achievement of significant results

in both road transport, where 2,480 kms of rural roads and 1,790 kms of non-rural roads have

been constructed or rehabilitated, and water supply, where about 8,500 community water points

have been constructed or rehabilitated, about 60,500 new piped household water connections

have been established and another 146,500 have been rehabilitated, and 1,360 water utilities and

water service providers are being supported.

Additional sectors and themes are preparing core indicators for adoption to the IDA investment

lending portfolio. It is also expected that the core indicators will be expanded to capture results

under IBRD-financed operations. Guidance on capturing results under development policy and

technical assistance operations is also being prepared.

Box 3.2. Outputs and Outcomes in IAP infrastructure Implementation Completion and

Results Reports (ICRs)

A first compilation of outputs and outcomes in ICRs of IAP projects has been completed. By

September 2009, of all the projects approved in FY04-07, 18 have submitted ICRs. They

show that these completed IAP projects have achieved important results:

A railways project in China built/rehabilitated a 109 bridges, 900 km of lines, and 28

tunnels, which contributed to reducing transit time per trip freight, passenger, and

express passenger trains by 41, 32, and 49%, respectively, and increase traffic volume

for freight from 40 billion ton-m to 51.6 billion between 2003 and 2007;

A project in Bangladesh helped increase passenger traffic from 4164 to 4590 million

passenger-km, and container freight traffic from 71,481 to 76,572 TEUs in two years;

A project to upgrade urban transport services in Santiago de Chile resulted in a 10%

drop in transport costs;

A project in Poland contributed to raising the share of roads in good and fair condition

from 46 to 53% in four years;

A project in Timor-Leste distributed 27,600 compact florescent lamps;.

The Emergency Water project in West Bank and Gaza built 11 km of transmission

pipeline and built or rehabilitated 1,400 household connections;

The project in Nairobi helped reduce the water billing delays from 6 to 0 months,

increase collection efficiency from 65 to 74%, reduce the unaccounted-for water from

50 to 43%, and increase the billed water volume from 75 to 94 million m3 p.a. over 3

years.


43

159. Deepen implementation of IFC‟s Development Outcome Tracking System (DOTS) to

infrastructure sectors. In FY 2009, IFC continued to strengthen the process for capturing and

reporting its development impact reach for new commitments as well as for its existing

committed portfolio. The identification of key infrastructure development impact indicators such

as number of customers reached, employment generated (including women employed) and taxes

paid are mandatory indicators for tracking purposes for all projects based on information

reported directly from its clients. IFC works with outside auditors Ernst & Young who provide

quality assurance on the reach indicators as well as on the overall process of capturing and

reporting impact on a project-by-project basis. In addition to reporting its new commitment and

portfolio reach figures, IFC‘s Annual Report 2009 will report in aggregate the success rates of its

projects approved between FY 2000 and FY 2005.

160. Review existing MIGA M&E framework to improve tracking of development impacts

and investment facilitation results. In FY09, MIGA initiated a program of work to systematize

ex-post evaluation of investment guarantee projects. A core team comprised of MIGA and IEG

specialists developed detailed guidelines for evaluation of infrastructure, oil/gas/mining, and

agribusiness projects, sponsored workshops and other learning events to increase skills for

applying a comprehensive evaluation frame endorsed by IEG for various kinds of guarantees

(non financial sector and SIPs), and began piloting this new approach to evaluations. In FY10,

additional pilots will be conducted. Based on experience gained, the guidelines will be finalized

and applied to a representative sample of MIGA projects every year. Going forward, similar

guidelines are under development for financial sector guarantees and a series of learning events

will support their dissemination this fiscal year.

161. In addition, MIGA is preparing to roll out development effectiveness indicators during

the course of FY10. The goal of these indicators is not to substitute for the qualitative and

quantitative analysis on development impact which is currently done at MIGA during the time of

underwriting. Rather, it is to be able to have indicators which summarize MIGA‘s overall

development impact across all projects. Therefore, these indicators should be simple to

understand, easy to collect and monitor, and subject to aggregation. There will be portfolio-wide

indicators which will be applicable to all projects; in addition, there will be a sub-set of sector-

specific indicators that will take into account each sector‘s specificity. The goal is to have

relatively few indicators (8-12) which meet these characteristics.


44

ANNEX A: SIAP ACTION MATRIX

Objectives/Action Areas Actions/Targets Ref Para WBG Accountability

Core sector strategies to guide action to meet the access gap in infrastructure sectors (Transport, Water, Energy, and Information and Communications Technology)

Transport business strategy (FY08-11) fully implemented Transport Business Strategy 2008-2012 was published and launched on May 21, 2008. o Diversification from roads to all transport modes and removal of bottlenecks for international

trade through increased regional projects and AAA; Freight Transport for Development The roads subsector came below 50% of the overall transport portfolio in FY09. o Cross sectoral linkages to energy security Assistance to Brazil, China, India, Indonesia, Mexico, Poland, and South Africa to

identify low-carbon development paths. Clean Technology Funds (CTF) operations are seeking the deployment and transfer of

low carbon programs and projects with a significant potential for long-term green house gas emissions.

40 45 42 43

Regions, SDN, IFC, MIGA

Water Sector Board integration mainstreamed by FY09 The integration of the water practice across Bank sectors is well underway. o More equitable and efficient delivery of water services (water supply and sanitation, irrigation,

hydropower and environmental services) with special emphasis on services to the poor Ensuring that scarce water resources are appropriately managed, while supporting the

provision of a range of water services necessary for development has been at the core of the WBG assistance for water

The Water Strategy Implementation Progress Review was launched in FY09. WBG Directions in Hydropower: Scaling up for Development was approved in FY09. o IFC Water Strategy to catalyze private investment As part of its draft Water Sector Business plan, IFC has identified five key investment

focus areas

47 46 48 50 49

Energy The Concept Note of the Energy Strategy was discussed by the Committee of

Development Effectiveness in July 2009. o Scaling-up the access program in SSA through sector-wide programmatic approaches launched

in FY08 An Energy SWAp Memorandum of Understanding was signed in July 2008 with the

Government of Rwanda.

52 54

Information and Communications Technology (ICT) WBG agenda revamped by FY09 in response to new industry trends: o Shift from traditional technical assistance to APL, and integrated projects (infrastructure, e-

government, Information Technology industry) and reimbursable Technical Assistance Executing second and third phases of the Regional Communication Infrastructure

Program, an APL focusing on connectivity in Eastern and Southern Africa. o Continued growth in frontier markets. IFC continued to focus on frontier markets with 14 out of 23 projects and 80% of

commitments in IDA countries.

55 56


45

89Objectives/Action

Areas

Actions/Targets Ref Para WBG

Accountability

Maximize effectiveness through cross sectoral synergies: Infrastructure

response for climate change mitigation and adaptation, underpinned by WBG Strategic Framework on Climate Change and Development (SFCCD)

Infrastructure response for climate change mitigation and adaptation, underpinned by WBG Strategic Framework on Climate Change and Development (SFCCD)

SFDCC adopted in October 2008.

64


Transport: Supporting response to climate change through increased support to planning, investment, and strategy for urban transportation; Transport and Climate Change

Report delivered in FY09.

65

Water: Enhanced focus on sustainable management of the water resource base The Water Anchor has completed a major AAA on Water and Climate Change:

Understanding the Risks and Making Climate Smart Investment Decisions.

66

Energy: scaled up actions in CEIF Clean Energy Technology Acceleration Plan was presented at a Board Technical

Briefing on January 27, 2009. The GEF was identified as the agency to lead the proposed new vehicles.

o Transition to low carbon economies – studies completed in +5 countries in FY09 and continuing to largest GHG emitters and expansion of methodology to other large GHG emitters; Clean Energy Technology Acceleration Initiative Implementation Plan

The Bank has provided assistance to seven countries: Brazil, China, India, Indonesia, Mexico, Poland, and South Africa to identify low-carbon development paths.

o Continued progress in low carbon energy lending from the base of 40 percent of low carbon projects in FY07 and the WBG Bonn targets of 20 percent annual increase in investment in renewables and energy efficiency

Over the last five years period portfolio rose by more than 350% constituting around 40% of the entire WBG energy portfolio in FY09.

67 68

69

Development, testing, and improvement of methodologies for carbon foot-printing and climate risk screening, with first methodologies by FY09, and full roll-out by FY11

Both the energy and transport sectors have started developing draft methodologies and tools.

70

Launch of the Climate Investment Fund, including a clean technology fund in FY09 with robust programs committed in at least 5 countries by FY11

The CIF was approved by the Board on July 2008. Under the Clean Technology Fund (CTF), the first 3 investment plans with the total

commitment of about $1 billion were endorsed for Egypt, Mexico and Turkey. Eight investment plans are currently under preparation as well as a regional program in MNA for scaling up concentrating solar power.

As the first program of the Strategic Climate Fund (SCF), the Pilot Program for Climate Resilience (PPCR) selected 9 pilot countries and 2 regions.

WB Treasury supports the flow of innovative financing for “climate smart” investments, including through “WB Cool Bonds”, CERs, Green Bonds and Eco-Notes.

74 75 76 77


46

89Objectives/Action

Areas


Accountability

Expand PPPs and strengthen market conditions to crowd-in the private sector.

Support government‘s action to strengthen enabling environment for PPPs through technical assistance and leveraging facilities: o Establish legal and regulatory frameworks that provide clarity and predictability to private

investors and consumers Ongoing work progressing in various countries. o Strengthen agencies responsible for PPP design, implementation, and oversight, including

sound approaches for selecting between the PPP and public routes, and integrating government support into the budget framework

Ongoing work progressing in various countries. Worth remarking some regional initiatives in MNA and ECA supported by PPIAF.

o Scale up OBA Ongoing work progressing in numerous countries. "Output Based Aid - A Compilation

of Lessons Learned and Best Practice Guidance" issued in September 2009. o Mobilize local long-term currency funding for infrastructure The World Bank has been providing technical assistance and funding for the creation of

market intermediaries to mobilize local currency financing for PPP projects: IIFCL, IIFF.

o Provide transaction preparation support through scaled up IFC Investment and Advisory assistance

Ongoing work across WBG. FIAS at MIGA/IFC. o Design and structure transactions through credit enhancements, partial guarantee facilities

(PRG), and matching sector loans Ongoing work across WBG. Nigeria and Albania PRGs were approved at WB. IDA

mainstreaming its PRGs in FY10.

78 79 80 82 83 85 89


Direct leveraging facilities implemented through IFC The Infrastructure Crisis Facility (ICF) launched on April 25, 2009.

Incorporate spatial dimension of development (Regional development, sub-national finance, and rural-urban integration)

WDR 2009 operationalized by FY11 o Focused treatment of spatial issues in CASs, AAA, and projects, including ―Shared

opportunity: geographically inclusive development in the Middle East and North Africa‖ The WDR 2009 has been widely disseminated in all Regions. Regional-level analytical

and strategic work, and in country-specific studies and operational work in process. o Dissemination and Bank staff learning on spatial analysis to inform regional policy

decisions by client countries, including Climate Change in metropolitan cities in Asia

91 93

Regions, Development Economics DEC/SDN

Increased number of regional infrastructure projects, such as regional water resources management, regional energy trade and transport projects

The WBG increased its overall portfolio of regional integration projects by over 60% since FY08, committing a total of over $370 million for infrastructure projects in FY09.

Several African joint WBG projects have already been approved in FY09.


47

89Objectives/Action

Areas


Accountability

Base case of 10 joint WB-IFC transactions with sub-national public entities without sovereign guarantees in FY09 growing to 16 by FY11 in all regions, focusing on middle-income countries

In FY09, the program committed 6 transactions totalling $596 million globally.

97 98 99 102 105

Develop and operationalize urban strategies, including: Building Liveable Cities in Africa; Collaborative Capacity Building Program in Urban Management; slum upgrading through urban infrastructure funds

The new strategy – Systems of Cities: Harnessing the Potential of Urbanization for Growth and Poverty Alleviation was released in October 2009.

Developing with the OECD and other partners an Urbanization Review. The SSA region is preparing national level urbanization studies for 12 countries. Collaborative Capacity Building Program in Urban Management: the Singapore Urban

Hub under implementation.

Mainstream Sustainability: Environment

Build on IAP experience to mainstream environmental issues in infrastructure projects: o Scaled-up and systematize use of SEAs and CEAs as key tools for sustainability by FY11 Of the 24 CEAs completed so far, 13 CEA‟s have been completed since 2007, 16 more are

currently underway. o Special focus on infrastructure interventions for environmental objectives in urban

environment (wastewater, solid waste and air quality management), household environment (improved sanitation and indoor air), and regional environment (sustainable water resources, hydropower and energy generation infrastructure)

The Eco2 Cities initiative in East Asia and the Urban Research Symposium held in Marseille in June 2009 delivered.

o Scaled-up use of economic/financial tools such as payment for environmental services and green accounting

On-going work in various countries

109 110 111

Regions, Social Development (SDV)

Social

Build on IAP experience to mainstream social benefit sharing in infrastructure approaches by FY11 o Systematizing social analysis A Thematic Group on Social Dimensions of Infrastructure was launched. A booklet on

Social Development and Infrastructure was prepared. o Promoting inclusive community and stakeholder participation Ongoing work as in the Azerbaijan Rural Investment Project. o Expanding benefit sharing (beginning with hydropower projects) The Water Anchor and SDD prepared a joint work program. o Operationalizing Gender Action Plan: i) systematize analysis for operations and AAA; ii)

design operations for reducing gender disparity; iii) start up gender disaggregated M&E and Impact Evaluation.

Gender Review of Infrastructure Portfolio 1995-2008 deliver in FY09 indicates increasing trend of gender integration and actions.

113 114 115 116

Regions, Social Development (SDV)


48

89Objectives/Action

Areas


Accountability

Governance Support to ensure access to quality, affordable infrastructure services through improved governance through sector support to the WBG Governance and Anti-Corruption Implementation Plan (GAC) beginning in FY08 o Sectoral translation of WBG GAC launched in FY08 Ongoing work across WBG supported by the GAC Squad. The Construction Sector Transparency Initiative (CoST) and the Extractive Industries

Transparency Initiative (EITI) are supporting clients to improve governance through transparency

o Improved public finance and fiscal management of infrastructure Work in process. Water Anchor developing in dept public expenditures reviews. o Improved results measurement of infrastructure services Water and Transport Anchors pursuing improving results measurement.

122 124 127

128, 129


Leverage private and public financing for infrastructure

Private and public financing leverage through WBG financing between US$109 - US$149 billion based on WBG financing of US$59 -US$72 billion (FY08-11) o Increased WB lending commitments to US$45 to US$53 billion o Increased IFC equity & lending commitments for infrastructure to US$10.7 - US$14.6

billion o Increased MIGA insurance coverage for infrastructure to US$2.6 -US$3.5 billion In FY09, the WBG remained on track to meeting these targets financing $21.6 billion.

131

WBG o WB o IFC o MIGA o Regions,

Treasury

(TRE), SDN WBG

Expand percentage of operations that use the Bank‘s risk management/ treasury products (IBRD/IFC) to support client‘s management of financial risks for public finance and reduce overall project costs: on interest rate, currency, liquidity and commodity price volatility

Progressing across the various products. IBRD offers risk management products and advisory services such as DPLs with a Catastrophe Deferred Drawdown Option, Sovereign Catastrophe Insurance Pools, Catastrophe Bonds and Weather Derivatives.

132

Direct leveraging of private sector financing through: o Infrastructure financing joint ventures with Financial Intermediaries (FIs) to reach US$1

billion by FY11 Progressing in various milestone transactions: IIFF, IIFCL, and IPFF. In the Funds sector, the Global Infrastructure and Global Funds Department have

together partnered to undertake several initiatives. o Implementation of IFC‘s Infra-Ventures Fund In FY 2009, IFC InfraVentures signed 4 Joint Development Assignments. o Deepening local capital markets through IFC‘s Global Financial Markets In FY09, IFC‟s infrastructure department undertook 3 joint venture projects with the

IFC global financial markets department. o Exploring use of WBG risk mitigation products to create financially efficient asset backed

securities that can raise new funding in global and local capital markets Progress was not technically possible conditioned by the negative environment created by

the Sub-Prime Crisis in 2008 and 2009.

134 135

135

134

136


49

89Objectives/Action

Areas


Accountability

Scaled up support on key cross-cutting trust funds and partnerships, including: o Climate Investment Facility Through the CIF, the WBG leveraged donor countries to pledge $6.2 billion o GFDRR: Global Fund for Disaster Reduction and Recovery To date, the GFDRR has received $75.2 million in contributions from its donors. o GPOBA: Global Partnership of Output Based Aid Work in progress at GPOBA.

138 137 138

SDN,

Concessional

Finance and

Global

Partnerships

OPCS

Contribute to global fora on harmonizing aid policies, including Infrastructure Consortium for Africa; High Level Forum (HLF) on Aid Effectiveness in Accra, Ghana; support to new and emerging donors for infrastructure

In September 2008 the Bank organized the Accra High Level Forum along with the Government of Ghana and the OECD-DAC. It crystallized in the Accra Agenda for Action (AAA). OPCS presented an Aid Effectiveness Action Plan for the Bank to the Board in March 2009 addressing commitments set by the AAA.

140

SDN Integration Develop and scale-up training to Bank staff and clients on Sustainable Development Sustainable Development Leadership Program created: Almost 200 SDN staff has

participated.

145

Regions, SDN

Mainstreaming WBG joint work

Increase WB-IFC-MIGA joint engagements (includes co-financing, parallel financing, advisory services, upstream AAA)

Coordination between regional teams is now occurring more frequently. There have been sixteen joint investment projects committed in FY09 and also 125 active joint advisory projects in IDA countries combining instruments.

147 Error! Reference source not found. 151

148, 149


Increase PPIAF-like scale up activities Various activities have been undertaken to support private sector investments combining

PPIAF, IFC infrastructure advisory, GPOBA and WBG Guarantees.

Complete WBG Sub-national business review by FY09 Actual investments reached $745 million versus a target of $800 million. A Board

Technical Briefing in March 2009 reported on the progress of the pilot program.

Implement WBG interaction plan for common product lines by FY11 WBG institutions are scaling up cooperation and alignment with each other.


50

89Objectives/Action

Areas


Accountability

Reducing Non-Financial Costs of Doing Business

High priority sub-sectors in infrastructure partner with OPCS to streamline internal procedures Support OPCS to expand country systems pilot and reform and rationalization of lending policies

“Investment Lending Reform” proposed a stronger focus on results

153

154 155

OPCS, SDN

Systematically increase usage of Bank‘s financial and structuring capacity and products for

transactions packaging for priority sectors

WBG significantly enhanced its financial and structuring capacity in FY09.

Mitigate sovereign and natural catastrophic risks through risk instruments such as weather derivatives

Climate risk management products include the Caribbean Catastrophe Reinsurance Facility and Weather hedges. The World Bank completed the inaugural sale of CERs for the UN Adaptation Fund in May and June 2009 raising $20.2 million.

Enhancing monitoring of WBG contribution to development through sustainable infrastructure

Increase WB-IFC-MIGA joint engagements (includes co-financing, parallel financing, advisory services, upstream AAA)

SIAP & INFRA monitor the WBG‟s contribution to development as well.

156 157 158 159 161

SDN, IFC, MIGA

Formulate pilots of innovative methods of data collection conducted; emerging lessons reviewed and disseminated; scale up strategy (WB)

A review of the use of sensing methods for collecting results on infrastructure and other sustainable development areas has been carried out. In addition, the Bank has reviewed the potential for non-traditional interview surveys to improve the availability of results data.

Report on expanded set of good practice project and country results indicators (WB) The Bank is adopting standardized core sector indicators. Work in progress.

Compile outputs and outcomes in IAP infrastructure Implementation Completion and Results Report (ICRs) (WB)

A first compilation of outputs and outcomes in ICRs of IAP projects has been completed.

Deepen implementation of DOTS to infrastructure sectors (IFC) In FY 2009, IFC continued to strengthen the process for capturing and reporting its

development impact reach.

Review existing M&E framework to improve tracking of development impacts and investment facilitation results (MIGA)

In FY09, MIGA initiated a program to systematize ex-post evaluation of investment guarantee projects. In addition, MIGA is preparing to roll out (8 to 10) development effectiveness indicators during the course of FY10.


51

ANNEX B: HIGHLIGHTS OF RECENT WORLD BANK GROUP PROJECTS AND ADVISORY SERVICES

I. Transport Projects Ref Para

AFR - Cameroon

and Central African

Republic: CEMAC

Transport Transit

Facilitation Project

Additional financing of $67

million IDA grant + $150

million IDA credit

To facilitate regional trade among the CEMAC member states and improve the Central

African Republic (CAR), the Republic of Cameroon's, and the Republic of Chad's access to

world markets by scaling up the road rehabilitation activities on the key international

transit corridors linking the port of Douala in Cameroon with N'Djamena in Chad and

strengthening corridor maintenance and hence sustainability in CAR

45

AFR - Ethiopia

Roads Sector

Development

Program –APL IV

$245 million IDA Credit To assist the government in strengthening and increasing its road transport infrastructure

and its reliability to reduce poverty and increase employment by promoting growth and

mobility in a socially and environmentally sustainable manner. The APL also supports

GOE in increasing the efficiency of the road sector through sector reform, especially

through capacity building and modernization of ERA as a commercially oriented entity

45

Governance and Anti Corruption: Throughout the Association‘s support to GOE‘ s Road

Sector Development Program (RSDP), including Adaptable Program Lending (APL) stages

I, 11, I11 and the proposed APU, GOE has given importance to addressing a number of key

governance issues in the transport sector a governance assessment and measurement

initiative has been established. At the outset, the Bank conducted a sector-level corruption

diagnostic assessment focused on the construction sector, with emphasis on roads. The

results of this assessment led the Prime Minister to agree Ethiopia become a pilot country

in the World Bank/DFID Construction Sector Transparency (CoST) Initiative. The

expected benefits of the CoST process are: improved transparency in the sector, enhanced

M&E capacity on governance, improved demand-side accountability mechanisms around

construction sector industry, and improved transparency in public financial management

(PF‘M) .

120

EAP – China:

NanGuang Railway

Project

$300 million IBRD loan 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. 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.

45

Crisis response: To counteract the effects of the crisis, China has announced a massive

stimulus package of $586 billion, of which more than 70% is for infrastructure. This

emphasis has been deliberately designed to focus on those sectors in which projects will

generate significant and continuing long-term benefits as well as being capable of rapid

implementation. The Bank‘s infrastructure lending to China was 2.1$ billion in

FY2009This is one of the first projects approved to support China‘s stimulus plan.

61

EAP – China: $300 million IBRD loan To construct new double track electrified railway line of about 857 km and railway stations 45


52

Guiguang Railway

Project

between Guiyang in Guizhou province and Guangzhou in Guangdong province.

Crisis response: This project also supports China‘s stimulus plan. 61

ECA - Kazakhstan

South West Roads

Project

$2.1 billion IBRD loan To increase transport efficiency on the road sections along the Western Europe to Western

China (WE-WC) Corridor, and to improve road management and traffic safety in

Kazakhstan by upgrading 1,062 km of road sections, strengthening the capacity of the

implementing agencies, assisting Kazakhstan in articulating strategies on increasing road

safety and road services. The project will greatly improve regional transport linkages. The

project is being jointly implemented ADB, EBRD, JICA, and IsDB.

45

LAC - Argentina:

Exolgan $40 million IFC loan To support operator of the second largest container port terminal in Buenos Aires which

handled about 500,000 TEUs in 2007 in order to strengthen the Argentine port sector by

helping expand a key container handling facility to better serve Argentine exports and

imports

45

LAC - Brazil: Second

Rio de Janeiro Mass

Transit Project

$211.7 million IBRD loan To improve the level-of-service provided to the urban (commuter) rail transport users in the

Rio de Janeiro Metropolitan Region a safe and cost-efficient manner and to continue the

strengthening of the region‘s transport management and policy framework by financing

rolling stock, critical for increasing the peak-hour carrying capacity of the rail-based

system, and designing urban transport strategies and actions to mitigate the impact of rising

transport costs on the mobility of the poor

45

LAC - Panama:

Panama Canal

Authority

$300 million IFC loan To increase the Panama Canal‘s capacity and efficiency. In 2005, Canal operations

generated, either directly or through multiplier effects, some 18.6% of Panamanian GDP,

41.2% of its export volume, and 28% of fiscal revenue. Preliminary estimates suggest a

permanent 0.6 to 0.8 percent boost to real GDP growth after expansion.

45

MNA - Egypt:

Airport Development

Project

$335 IBRD loan + $40

million in Additional

Financing

To finance Cairo International Airport's new Terminal 3 (opened Dec 2008) and to finance

a new terminal at Sharm El Sheikh Airport (opened June 2007), benefiting an estimated 11

million passengers and providing over 21,000 jobs. A new project is in preparation for the

renovation of Terminal 2 of Cairo International Airport to be financed with an IBRD loan

of $280 million

45

MNA - Jordan: CTI

Group II $16 million IFC loan To support one of the largest specialized cement carrier fleet owners in the world to

facilitate cement exports from countries with excess supply (like Pakistan, China and India)

to countries where there is a shortage of cement production capacity (like the US and the

Middle East).

45

MNA - Tunisia: TAV

Airport

$39.5 million IFC equity

investment

To help further private sector participation in infrastructure in Tunisia and the MNA region 45

II. Water Projects Ref Para

AFR - Congo Urban To increase sustainable access to water in selected urban areas and the efficiency of the

responsible agency, increasing access in the targeted project cities from 42 percent in 2008

45


53

Water Supply Project to 55 percent by 2013, providing 1.2 million urban residents access to safe water, while

enabling the local agency to fully cover operation and maintenance costs through revenues

by 2012

EAP - China:

Chongqing Water

Project

To help address serious wastewater issues following rapid urbanization and industrial

growth in the municipality by supporting expansion of the existing Chongqing Tangjiatuo

Wastewater Treatment Plant and installation of sludge dryers

49

EAP - Philippines

Participatory

Irrigation

Development Project

$70 million IBRD loan To improve irrigation service delivery on a financially and technically sustainable basis

that will contribute to increased agricultural production and productivity among beneficiary

farmers in irrigated areas

49

ECA - Belarus Water

Supply and

Sanitation Project

$60 million IBRD loan To improve the quality, efficiency and sustainability of water supply and wastewater

treatment services in six participating Oblasts covering about 1.7 million consumers

through rehabilitation and reconstruction of water supply and sanitation facilities and

networks, with adoption of advanced technologies for water treatment

49

LAC - Argentina

Matanza-Riachuelo

Basin Sustainable

Development APL

$840 million IBRD loan To improve sewerage services in the M-R river basin and other parts of the province and

city of Buenos Aires by expanding transport and treatment capacity through an integrated

basin-wide approach. The project is the largest sanitation project the Bank has financed to

date in Latin America

49

LAC - Paraguay

Water and Sanitation

Sector

Modernization

Project

$64 million IBRD loan To increase the efficiency, coverage, and sustainability of water supply and sanitation

services in Paraguay by improving the governance of the sector, improving water services

and increasing access to sewerage services in the Asunción metropolitan area, and

increasing access to sustainable water and sanitation services in rural areas.

49

Governance and Anti-Corruption: The project will support institutional strengthening to

sector agencies and improved overall sector governance. As a guiding theme in all

components, the project will seek to promote: (i) transparency, through planning and

programming all interventions based on objective and quantifiable criteria; (ii)

performance, through the identification of targets for each intervention to be monitored and

whose attainment will be the indication of success; and (iii) accountability, through the

participation in and publication and presentation of the programmed activities and results to

the stakeholders.

122

MNA - Yemen

Groundwater and

Soil Conservation

Additional

Financing

$15 million IDA credit To "scale up" the ongoing project for which the objective is to conserve water in farming

areas, especially groundwater, improve recharge and protect watersheds

49

MNA - Yemen Water

Sector Support

$90 million IDA grant To support the Recipient‘s implementation o f the NWSSIP to strengthen institutions for

sustainable water resources management; improve community based water resource

management; increase access to water supply and sanitation services; increase returns to

49


54

Project water use in agriculture; and stabilize and reduce groundwater abstraction for agricultural

use in critical water basins.

The project is jointly financed by KfW ($60.7 million) and the Netherlands ($48.75

million)

Gender: A gender review of FY09 infrastructure portfolio found the Yemen Rural Energy

Access Project (FY2009) as best practice in gender integration. Five methods of gender

integration are included – social and gender analysis for identifying needs and constraints

of women and men; consultations with women and men for in-depth understanding of

ground realities and identifying solutions; activities in the design to reduce gender disparity

and enhancing women‘s opportunities in participation, economic opportunities and safety;

budget for gender targeted activities; and gender responsive M&E for monitoring progress.

The Project conducted an Economic and Social Impact Assessment (ESIA) prepared in a

participatory manner, by consultations with community men and women, community

leaders, relevant Governmental agencies, NGOs and the Cooperatives. The design includes

a participatory implementation and M&E process and both men and women will be

involved throughout the implementation.

118

Governance and Anti Corruption: With increased harmonization of efforts and aligning

behind governments WSS implementation plan. From this involvement, donors expect that

this approach, relying more on national systems with appropriate improvements in

transparent instruments and accountability, will help resolve the key governance issues

affecting the water sector. In addition, specific anti-corruption measures will accompany

the Project: an Anticorruption Action Plan (ACAP) has been prepared and will be

implemented as part of the WSSP financing.

116

SAR - India:

Andhra Pradesh

Rural Water Supply

and Sanitation

Project

$150 million IDA/IBRD To improve water supply and sanitation services in 2,600 villages across 6 districts of the

state. The project aims to provide piped water to 2.1 million people and extend sanitation

services to 1 million people who currently do not have access.

49

SAR - India:

WaterHealth

International

15 million IFC loan +

GPOBA grant

To increase affordable, clean drinking water to about 3 million people in India through

installation of more than 600 systems in villages in the Indian states of Uttar Pradesh,

Madhya Pradesh, Chhattisgarh, Andhra Pradesh, Gujarat and Maharashtra.

49

Joint financing: WaterHealth India has benefited from grant financing from GPOBA

program to ensure sustainability in Andhra Pradesh by requiring that that tariffs cover the

costs of operation and maintenance, user-fee collection, and education and communication

activities with key stakeholders and vulnerable groups such as young mothers, infants, and

families living below the poverty line

147

SAR - India: Jain

Irrigation Systems

$45 million IFC financing To increase agricultural productivity from the adoption of high-tech micro irrigation

systems, which will reduce water and inputs support sustainable water irrigation and

49


55

Ltd., India distribution systems pivotal for agricultural economies

III. Energy Projects Ref

Para

AFR: Mali

Household Energy

and Universal Access

Project Additional

Financing

$35 million IDA credit To increase the access of isolated low income populations to basic energy services to help

achieve economic growth and poverty reduction targets, including those linked with the

Millennium Development Goals (MDGs) through expanded use of renewable electricity in

rural and peri-urban areas in order to increase productivity of small and medium

enterprises, to enhance the quality and efficiency of health and education centers, and to

improve living standards

51

AFR: Nigeria

Energy and Gas

Improvement Project

$200 million IDA credit +

$400 million IDA Partial

Risk Guarantee

To improve the availability and reliability of gas supply to increase power generation in

existing public sector power plants; and improve the power network‘s capacity and

efficiency to transmit and distribute quality electricity to the consumers, thereby

underpining the Government‘s gas sector policy and reform program and helping to

develop a sustainable gas market for the country.

51

Guarantees: The PRGs are designed to backstop the Power Holding Company of

Nigeria‘s gas supply payment obligations to international and domestic oil companies

which will help to unblock gas supplies to the power sector, which had hitherto seriously

constrained power generation in the country. The PRGs are expected to leverage around $4

billion of private sector investments towards boosting domestic gas supplies and will help

to create an enabling environment for private investments in the power and industrial

sectors. (The largest Bank Guarantee operation to date)

85

Governance and Anti-Corruption: The project is supporting development and

implementation of a stakeholder communications and participation process that includes

ongoing dialogue with Government and civil society at the national level. Transparency

will be provided through disclosing key documents at strategic locations in Nigeria and on

Bank and FGN websites, and consultations with local governments, traditional leaders,

affected communities and NGOs; and (ii) building on this process, establishing a

stakeholder forum led by the Government to continue the stakeholder dialogue as

suggested during the earlier workshop consultations.

120

AFR - Rwanda

Electricity Access

Scale-up and Sector-

wide Approach

(SWAp)

Development Project

$70 million IDA credit To improve access to reliable and cost-effective electricity services for households and

priority public institutions The SWAp approach is designed to increase aid effectiveness in

the sector by reducing fragmentation of donor aid flows in the energy sector, i.e., too many

small projects using different institutional frameworks and procedures and few results on

the ground. In working alongside the development partners, the Bank has been central to

identifying and facilitating progress along the roadmap for making the SWAp concept

operational. By moving toward more predictability and sustainability of aid flow to the

sector in a programmatic manner consistent with the basic tenets of the Paris Declaration

51

54


56

(ownership, alignment, harmonization, managing for results, and mutual accountability),

the GoR seeks to ―crowd in‖ increased resource flows from development partners.

AFR - Uganda:

Umeme electricity

distribution company

$25 million IFC loan, MIGA

insurance, IDA Partial Risk

Guarantee

To improve the quality of service and connect up to 20,000 new customers annually in a

country where many people still lack electricity.

51

Joint financing: In 2005, IDA provided $5 million support to the privatization of the

power distribution sector and MIGA also provided about $45 million guarantee to Umeme.

In 2008, Umeme approached IFC for debt and equity financing for its capital expenditure.

In FY09, IFC committed $25million in debt financing. Related to this investment, Umeme

would like to access limited amounts of funds structure in OBA to subsidize connections to

the poor which could be financed by the Bank. The amount of OBA available is likely to be

relatively limited, no more than US$10 million. In addition, Actis has discussed with IFC

the possibility of expanding the Umeme concession area beyond its current agreed footprint

(subject to GOU agreement), in order to connect customers who currently have no access

to electricity

147

EAP - China ENN

Solar Energy

$60 million in IFC financing To support implementation of China‘s first large-scale, thin-film-based solar module

manufacturing facility, helping to drive down production costs and stimulate the

development of the local solar photovoltaic market

51

EAP - China: Eco-

Farming Project

Biogas

$120 million IBRD loan To deliver direct environmental and economic benefits from the integration of biogas in

farming and cooking in rural households. In addition, the project aims to reduce

greenhouse gas emissions through methane combustion and reduced burning of coal and

firewood in the project by installing an additional 30,000 new bio-gas digesters to enable

nearly half a million rural households to use biogas from their small farms to cook food,

reducing the use of fossil fuels to heat homes and fertilize farms, and leading to 60,000

fewer tons of carbon dioxide emissions per year.

51

ECA - Albanian

OSSH Power

Distribution

Company

Privatization

EUR 60 million World Bank

Partial Risk Guarantee and

Advisory Services

Supports the privatization of OSSH to a major regional investor CEZ of the Czech

Republic.

51

Guarantee: The PRG was designed to mitigate regulatory risk in the context of a new and

untested regulatory framework by backstopping an innovative Letter of Credit (L/C)

structure. The L/C can be drawn in certain pre-specified circumstances of regulatory breach

to help sustain an appropriate regulatory environment. In this way, the PRG helped to the

secure the interest of the selected bidder CEZ who is expected to facilitate the viability of

the sector through substantial investments and service improvements. Also, the successful

privatization of OSSH will help to alleviate the fiscal burden on the sector and on the

Government‘s budgetary resources, thereby releasing resources for other high priority

social sector expenditure.

85

ECA: Turkey

Private Sector

Renewable Energy

$500 million IBRD loan To help increase privately owned and operated energy production from indigenous

renewable sources within the market-based framework of the Turkish electricity market

law, enhance energy efficiency, and thereby help reduce greenhouse gas emissions. A

51


57

and Energy

Efficiency Project

component of the project involves the use of CTF resources with lower interest rates and

significantly longer tenor to increase the incentive to undertake RE and EE projects.

Crisis Response: Turkey‘s faces a major challenge in finding financing for its

infrastructure sectors. Financing of suitable medium to long-term tenor is scarce in

Turkey, particularly for investments for renewable energy and energy efficiency. Against

this backdrop, the Bank committed $1.1 billion of infrastructure lending to Turkey in

FY09.

61

ECA: Turkey

Programmatic

Electricity Sector

DPL

$500 million IBRD loan To support the implementation of the Government's program for the electricity sector,

including pricing, market and energy efficiency reforms that are vital or the sector and for

the economy as a whole.

51

Crisis Response: The DPL will help mitigate the impact of the crisis, protect the

composition of public spending and channel adequate resources to crisis mitigation

measures, including employment intensive public investment in the electricity sectors.

61

ECA -Bulgaria AES

Kavarna

$52 million IFC loan For the construction and operation of the 156 MW St. Nikola Wind Farm, which will

increase the country‘s electricity output from renewable energy by approx 330 GWh per

annum

51

Turkey Rotor

Elektrik

$71.5 million IFC loan To finance the construction of a 135 MW wind farm in the province Osmaniye in Southern

Turkey, which is expected to increase Turkey‘s electricity output from wind energy

51

Brazil Serra da Mesa

Transmissora de

Energia S.A.

EUR20.9 million MIGA

Guarantee

Guarantee: Supports the construction, operation, and maintenance of a total of 675

kilometers of 500 kV transmission lines along the north-south axis of Brazil

51

LAC - Chile Norvind $30.7 million IFC loan For construction and operation of the 46 MW Totoral Wind Farm in Chile‘s IV region,

which will add approximately 110 GWh per annum of wind power to the grid and

supporting capacity building in Chile‘s nascent wind market

51

LAC - Dominican

Republic Electricity

Distribution

Rehabilitation

Project

$37 million IBRD loan To finance rehabilitation and upgrading of medium and low voltage circuits; part of a

larger $122 million investment program that envisages the rehabilitation of distribution

networks in selected areas to reduce electricity losses and improve the quality of power

supply; lower amounts of generated electricity, mostly based on imported oil products will

have positive impacts for the country, but also globally (reduction of GHG emissions).

51

Social component: A stand-alone social component in the project aims at re-establishing

the trust between the distribution companies and the consumers, establishing adequate and

permanent relationships between consumers and companies, promoting safe and efficient

use of electricity, increasing the cash recovery, and decreasing electricity losses with the

"24 Hours Program" for neighborhoods with high levels of electricity losses and low levels

of cash recovery. Social Management Plans (SMPs) for dissemination of information and

community organization, "Social Agreements" (Pacto Social) between distribution

companies and communities to improve the quality of the electricity service in the country

114


58

in a financially and socially sustainable manner.

LAC - Honduras:

Power Sector

Efficiency

Enhancement

Project (PROMEF)

$30 million IDA credit A management-oriented initiative which seeks to professionalize commercial and

distribution operations of the state owned vertically integrated electricity utility of

Honduras (ENEE), and to improve the quality of energy services to its clients through three

components.

51

MNA - Jordan KEC $40 million IFC loan To facilitate the complete privatization of the electricity distribution sub-sector in Jordan

by selling the government stake in two Jordanian power distribution companies, thereby

significantly contributing to the sector‘s liberalization and efficient management

51

SAR - Bangladesh

Rural Electrification

and Renewable

Energy Development

(RERED) Project

Additional

Financing

$130 million IDA credit To expand the scope and scale of the project, in order to support the electrification of 1.25

million households using solar photovoltaics and other renewable energy sources by 2012

51

SAR - India:

Haryana Power

System Improvement

Project

$330 million IBRD loan To improve reliability and efficiency of power supply and expand access through

strengthening transmission system, improving and expanding the urban distribution system

and providing technical assistance and capacity building to transmission and distribution

companies .

51

Governance and Anti Corruption: Some of the specific governance aspects of the project

include: development of an institutional strengthening action plan to improve

accountability systems through establishment of a system of performance indicators across

organizations, repeated consumer surveys in select project towns to measure improvements

in service delivery and corporate governance and financial management practices,

enhancement of the quality of MIS to arrive at a robust measurement of agricultural

consumption and improvement of the regulatory effectiveness and enhancing consumer

voice in decision making. A Governance and Accountability Action Plan summarizes

measures for risk mitigation.

120

SAR - India: Fifth

Power System

Development Project

$1 billion IBRD loan To help address India‘s acute deficit of power. The loan will help strengthen five

transmission systems in the northern, western and southern regions of the country to

facilitate the transfer of power from energy surplus regions to towns and villages in under-

served regions of the country.

51

Crisis response: This project is part of the Bank‘s response to GoI‘s request for a crisis

response package of US$5.2 billion, which comprises additional financing for

infrastructure investment and financial sector strengthening.

61


59

SAR - India: Chillers $6.3 million GEF grant + $1

million Multi-lateral Fund for

Implementation of the

Montreal Protocol (MLF)

grant + $5.85 million Clean

Develop-ment Mechanism

(CDM) grant

To reduce greenhouse gas emissions while simultaneously supporting the phase-out of

consumption of Ozone Depleting Substances required under the Montreal Protocol. The

project will accelerate the replacement of centrifugal chillers with efficient non-CFC-based

centrihgal chillers in order to promote deployment of energy efficient technologies and

products to reduce GHG emissions, and support the phase-out of CFC demand in India,

helping India meet its goal of a 20% improvement in energy efficiency by 2016-2017.

51

IV. Information, Communications and Technology (ICT) Projects Ref

Para

SSA Regional

Communication

Infrastructure

Program (APL)

Burundi, Kenya,

Madagascar

Rwanda : RCIP

2

Tanzania,

Malawil and

Mozambique:

RCIP 3

IDA and IFC financing

$164.5 million

$24 million

$151 million

Establishment of a 'virtual landing station' for international undersea fiber optic cables,

construction of regional backhaul infrastructure and financing of capacity purchase

schemes on the cables for targeted users, including rural and underserved areas,

governments, universities, and hospitals. The project is expected to allow up to twenty-five

countries in Eastern and Southern Africa to leverage the new submarine cables being laid

along the East African Coast for high-speed affordable connectivity and is expected to

stimulate regional trade by $250m. Supports connectivity in Eastern and Southern Africa

to link participating countries link to the IFC co-financed EASSy submarine cable and

other private sector sea cable initiatives. These WB and IFC operations as well as the

threat of forthcoming infrastructure competition have already caused satellite prices to

come down to 10% of what they were in 1998.

56

93

Uganda: Celtel IFC investment with Celtel

and a local bank

To create a risk-sharing facility that gives loans to small-scale entrepreneurs who distribute

Celtel phones and accessories across the country. This successful pilot for distributors'

facilities is now being replicated in other African countries and regions.

56

Pacific Islands:

Digicel

IFC investment To grow the portfolio in the Pacific Islands with investments in Kiribati, Samoa, Tonga,

and Vanuatu, building on a successful experience in the Caribbean.

56

Afghanistan: MTN IFC $65 million loan and a

$10 million equity invest-ment

To meet the growing need for affordable mobile phone services. 56

West Bank:

Wataniya

$85 million IFC loan To meet the growing need for affordable mobile phone services. 56

Mexico: IT/ITES $ 80 million IBRD loan To support in the development of Mexico‘s local IT/ITES industry, a critical driver of

growth and job creation.

56


60

V. Urban and Rural Development Projects Ref

Para

EAP - China

Wenchuan

Earthquake

Recovery Project

Supports the Government in restoring essential services, building capacity of local

governments to manage the recovery program, and supporting the Government to build a

recovery and reconstruction strategy

106

ECA: Azerbaijan

Rural Investment

Project (AzRIP)

$15 million IDA Credit

Additional Financing + $3.3

million PHRD grant

To improve living standards and increase the use of infrastructure services for households

in rural communities by facilitating participatory development planning and providing and

rehabilitating priority rural infrastructure identified by communities (e.g., roads, water

supply, schools, health posts). The Additional Financing Credit helps expand the ongoing

AzRIP project to new areas, increasing the number of beneficiaries, ensuring greater cost

efficiency, and extending the life of the project by three years.

114

Social: The project facilitates participation of rural families in planning and providing and

rehabilitating priority rural infrastructure identified by communities. The project has also

established institutional capacity to promote community development within the State

Agency on Agricultural Credits under the Ministry of Agriculture.

LAC - Guatemala:

Expanding

Opportunities for

Vulnerable Groups

Project

$115 million IBRD loan For improving key rural roads in 46 municipalities to services and markets and promoting

productive infrastructure through irrigation and water subprojects, enhancing the

management capacity of FONADES (National Development Fund - Fondo Nacional de

Desarrollo), and enhancing municipal capacity to implement and maintain rural

infrastructure.

61

Crisis response: The global financial instability and crisis has had a substantial impact on

poverty and social indicators in Guatemala. Guatemala‘s GDP is projected to contract by

0.5 percent in 2009 and remittances are expected to fall. Extreme poverty is expected to

increase by 2.6 percent in 2009 and the overall poverty increase for the same year was

estimated at 4.2 percent in 2008. Social indicators in education and chronic malnutrition,

already among the worst in Latin America are likely to be negatively affected by the

economic slowdown.

LAC - Brazil: Ceara

Regional Economic

Development -

Cidades do Ceara

project

$46 million IBRD loan Promotes economic development, improves urban infrastructure, and enhances regional

management capacity in the region

106

MNA - Morocco

Solid Waste Sector

Development Policy

Loan

$133 million Supports the Government in implementing reforms aimed at improving the performance of

the municipal solid waste sector

106


61

I. Regional Integration Projects Ref

Para

AFR - Southern

Africa Power Market

APL - Additional

Financing

For Construction/Rehabilitation of 800 MW transmission lines and supporting

infrastructure linking the Inga hydropower site in DRC to the Southern Africa Power Pool

and Kinshasa, with an additional component installing modern ICT backbone infrastructure

along transmission lines at low marginal cost

93

AFR - Regional

Communications

Infrastructure

Program APL

See above – ICT Projects See above – ICT Projects 93

AFR - West &

Central Africa Air

Transport Safety and

Security Program

APL

Strengthening of Civil Aviation Authorities' safety and security oversight capacities and

improvements in airport security and safety standards and infrastructure.

93

II. Private Sector Participation Projects and Advisory Engagements Ref

Para

AFR - Tanzania

Financial Sector

Support Project

IDA credit Supports development of a gap analysis of current legislation and a draft law and set of

regulations to create a conducive legal and regulatory framework. This involves working

with the private sector to identify key constraints to increasing investment flows in PPP and

proposing possible solutions through legal and regulatory instruments

83

ECA Region PPIAF Grants Support to the Balkan states and regional initiatives, including to the Caspian Development

Corporation to help to create a new gas transmission corridor from the Caspian Sea to

Eastern Europe; to support the development of a wholesale electricity market in

Southeastern Europe in order to open up greater economies of scale.

79

ECA - Russia: City

of St. Petersburg

World Bank Reimbursable

TA

Supports private sector investment of EUR 1 billion light rail (the Nadziemny Express) to

create new links across the southern part of the City, connected with the City metro system,

to reduce congestion and road usage

83

Supports private sector investment of some EUR 1.2 billion to expand the airport

Supports private investment for an $8 billion toll road (the Western High-Speed Diameter)

and a $1 billion tunnel (the Orlovsky Tunnel)

ECA - Kazakhstan

PPP Program

World Bank Reimbursable

TA

Part of the Joint Economic Support Program to develop procedures and methodologies in

the processing of PPP projects from inception to implementation

83

MNA Region PPIAF Grants Support to capacity building to governments looking to build infrastructure and take 79


62

advantage of public- private partnerships,. Earlier capacity building activities in the region

are starting to pay dividends, with support to the government of Egypt producing important

outcomes in the tendering of new projects in that country

III. Support to Financial Intermediaries / Leveraging Finance Ref

Para

AFR - Madagascar:

Sandrandrano

Water

Partial funding by IFC

InfraVentures

IFC is partnering with Sandandrano Exploitation, a private Malagasy company, and

Infraco, a project development company, to develop a private water company which will

produce potable water and distribute it to populations outside of the capital. The project is

being structured as a PPP with the Government of Madagascar

135

AFR - Rwanda:

Lake Kivo Methane

to Power Project


InfraVentures

If the innovative Rwanda Methane-to-Gas Power project proceeds, the cost of power is

projected to substantially reduce the cost of power generation in Rwanda. It would

significantly increase generation capacity in a country where only 6 percent of population

has access to electricity. The project will extract methane—a renewable energy source—

from deep in Rwanda‘s Lake Kivu and sell the output to the state-owned power company.

135

Joint financing: The project is a Bank-IFC joint project . IFC committed $4 million of

project development costs through its early stage project development fund IFC

InfraVentures, and is expected to provide debt financing at a later stage. The Bank team is

expected to provide an IDA political risk guarantee, if and when the project matures to the

bank financing stage

147

AFR - Africa Helios

Fund II,

Lesser of $60 million or 20%

of the Fund in IFC financing

To support the Fund to make 8-10 investments per annum in Africa. 70 % of the capital is

expected to be invested in IDA countries in Africa with an average investment size of $50

million and 50 percent of the Fund‘s commitments will be invested in infrastructure-related

projects including the power, utilities and transportation sectors. The Fund is expected to

have a strong impact for private sector development by adding value to its investee

companies by providing managerial, operational and strategic support to improve their

competitiveness and sustainability.

135

EAP & SAR - Asia

Environment

Partners (AEP)

$25 million in IFC equity

financing

To support a $250 million fund which will make equity investments in renewable energy

and environmental services companies mostly in China and India.

135

EAP - China

Environment Fund

III

Up to $15 million IFC equity

investment

To finance the $250 million China-focused private equity fund dedicated specifically to

climate change and an integral component of IFCs approach to help the country cope with

its environmental challenges. The Fund allows IFC to provide risk capital to innovative

clean tech companies which would be too small and not otherwise accessible through direct

IFC financing

135


63

EAP - Indonesia

Infrastructure

Finance Facility

(IIFF)

$100 million IBRD loan, $44

million IFC equity investment

and technical assistance

To support creation of a new, private non-bank financial institution with the expertise

needed to assess PPP projects and arrange financing for them (not currently available from

local banks). The IIFF will leverage local currency financing by borrowing from the local

capital markets and by providing the project assessment and debt arranging expertise into

the financial market, co-financing projects with local commercial banks.

134

Joint financing: This is a joint IBRD/IFC effort, with IFC, ADB and DEG as shareholders

in the IIFF. NBFI established the IIFF with the support of several development institutions

led by the World Bank, including IFC, AUSaid, ADB and DEG to assist in the

development of, and provision of long-term local currency financing to commercially

viable infrastructure projects. The WBG‘s loan and equity participation in IIFF will serve

both as a signal to other investors on the viability of this initiative and as a source of

technical guidance and commercial experience for this specialized venture

147

ECA - Tajikistan:

Lake Sarez Project


InfraVentures

For construction of a hydropower plant in the Southeastern part of the country. 135

ECA - Macquarie

Renaissance

Infrastructure Fund

(MRIF)

$100 million IFC equity

investment

To support the $1 to $1.5 billion closed-end infrastructure fund that will, subject to

Macquarie Group and Renaissance Group approvals, seek to make equity and equity

related investments in a portfolio of infrastructure assets located in Europe and Central

Asia. MRIF will seek to generate stable and long-term returns by investing in a diversified

portfolio of infrastructure projects. Target assets will include, but not be limited to roads,

airports, ports, electricity and gas transmission and distribution networks, heating networks

communication infrastructure, rail networks, water and sewerage utilities and social

infrastructure.

135

ECA - Renewable

Energy Mezzanine

Facility

Up to EUR25 million in IFC

investment

Financing for innovative pilot facility for supporting up to 150 MW of RE generation

through existing IFC client banks in the SECA and CEU regions. The transaction is a pilot

facility for supporting renewable energy projects via banks. Lack of equity for small- and

medium-sized project developers has been identified as a key obstacle to investment in

small- and medium-sized renewable energy opportunities. IFC‘s proposed investment

consists of three separate loan facilities to three partner banks for up to EUR 25 million in

total. The three partner banks will on-lend the funds received as subordinated loans

(mezzanine) to eligible renewable energy projects. These sub-loans substitute for scarce

equity. IFC will bear the credit risk of the respective subordinated loans and sub-projects.

The proposed approach of providing mezzanine financing through financial intermediaries

is an innovative concept and, if the proposed pilot project is successful, such mezzanine

facilities could be used as a wholesaling mechanism for financing small-scale renewable

energy projects. The project operates in, Lithuania, Czech Republic and Bosnia and

Herzegovina.

135

LAC: Central

Mezzanine

Infrastructure Fund

$40 million IFC investment The fund will focus on making investments in medium sized infrastructure

projects/companies in Central America, Dominican Republic, Mexico and Colombia. The

Fund is designed to invest mainly in one or more of the energy, transportation, utilities and

telecom sectors. This is the first dedicated regional infrastructure mezzanine fund for

135


64

(CAMIF) Central America.

LAC - Nicaragua:

El Salto

Hydroelectric Plant


InfraVentures

One of the first larger-scale, private sector-led renewable energy projects in over 30 years –

a hydroelectric plant, El Salto, under development in Northeastern part of the country

135

SAR - Bangladesh

IPFF Project

$55 million IDA credit The IPFF project has turned $55 million of IDA funding into a 5 percent addition to the

total power generation capacity in Bangladesh, adding 178MW to the power grid in a rapid,

privately-funded and more efficient manner. In the past 18 months, five small power plants

have been financed and four of them have become operational, with an aggregate new

power capacity of 99MW, at the cost of $36.2 million. Two more plants with combined

capacity of 79MW are in the process of approval, at a cost of $29.08 million. In the

process of adding much-needed electrical capacity to the power-starved country, the PPPs

have been structured according to a high environment and procurement standards

134

India Infrastructure

Finance Company

Limited (IIFCL)

$1.195 billion IBRD loan and

technical assistance

To finance PPPs in infrastructure through an existing and operational institution that

mobilizes financing for PPP projects, by co-financing with commercial banks/financial

institutions that have expertise in assessing and arranging debt for PPP projects. The

Bank‘s loan will be used as capital for the co-financing of such projects.

134

Crisis response: This project is part of the Bank‘s response to GoI‘s request for a crisis

response package of US$5.2 billion, which comprises additional financing for

infrastructure investment and financial sector strengthening.

61

Sri Lanka: PADGO $13.5 million IFC financing of

a $30 million (guarantee) risk

sharing facility plus $3.6

million GEF funding

Supports an existing FI to support adding power generation capacity through renewable

energy sources. A PADGO is a joint venture between the Global Financial Markets and

Global Infrastructure Departments of IFC that addresses the impediments to wider

proliferation of DG technologies and provides support and innovative financing models to

promote the growth of this new market.

134

Joint financing: The project will continue the market development activities initiated by

the IDA and GEF-financed Renewable Energy for Rural Economic Development (RERED)

initiative, and build on the good understanding and working relationship developed with

the government in the Renewable Energy sector.

147

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