infra platform in action infra platform in action

INFRA Platform in Action

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Outline

Countercyclical Stimulus SupportCountercyclical Stimulus Support

Development Policy OperationsDevelopment Policy Operations

Donor HarmonizationDonor Harmonization

INFRA DiagnosticsINFRA Diagnostics

Innovative InstrumentsInnovative Instruments

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Countercyclical Stimulus

Stimulus packages with significant infrastructure component have been used in response to the Global Financial Crisis

• Effective tool to create jobs and provide the foundation for economic recovery• Transformational opportunity to invest in “green” Infrastructure

Under INFRA, the Bank has helped client countries by providing more than $20 billion for infrastructure sectors

• This represents 29% increase from FY2008 and 66% increase from FY2007.

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Impact of Crisis WBG Response

Bank helped countries in the region prioritize infrastructure investments by approving $3.1 billion of infrastructure lending in FY09. Stimulus plans of China, Vietnam, Indonesia supported.

Africa largely shielded from the initial impacts; falling commodity

prices, reduced private flows and a shrinking fiscal space created difficult environment for infrastructure investments in Africa

WB approved $4.9 billion for infrastructure sectors in the region in FY2009 including $2.1 billion Kazakhstan South West Roads Project

Bank has supported governments in the region by committing $2.9 billion for infrastructure in FY09, including $450 million loan for Third Sustainable Development DPL

WB infrastructure lending increased from $2.5billion in FY2008 to $3.6 billion in FY2009

East Asia and Pacific Better prepared for the crisis due to structural and institutional

reforms undertaken following Asian Crisis; many countries adopted stimulus packages with significant infrastructure component.

Eastern Europe and Central Asia experienced a ‘sudden stop’ in capital inflows; unable to

implement countercyclical macroeconomic policies

Latin America Countries relying greatly on infrastructure stimulus

packages to respond to the crisis

SIAP Progress

Middle East and North Africa Countries face lower oil revenues, tourism revenues,

remittances, and foreign direct investment as a result of the global crisis--all of which is likely to weaken economic performance

Bank committed $1.3 billion for infrastructure sectors in the region in FY2009, including $600 million for the Egypt Ain Sokhna Power Project

South Asia Tightening of credit markets as seen in portfolio

outflows, decline in external commercial borrowing, and an increase in credit spreads. This has created difficult conditions for undertaking large infrastructure investments

the Bank approved $1.9 billion for infrastructure in the region in FY2009, including $149 million for the Dhaka Water Supply and Sanitation Project. Stimulus support in India.

Countercyclical StimulusWBG Actions in the Regions

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SIAP Progress

Countercyclical StimulusProjects

China NanGuang Railway Project

•$300 million in Bank Financing approved in June 2009•To provide additional transport capacity and reduce transport time between the less developed western region of southwest China and the relatively more developed Pearl River Delta region.•Project will generate significant and continuing long term benefits and is also capable of rapid implementation.•One of the first projects implemented as part of stimulus package announced by the government in response to the global financial crisis.

Peru Safe and Sustainable

Transport Project•$150 million project approved in January 2010•Will improve passenger and freight transport conditions in an efficient and safe manner along national road corridors that are essential to Peru’s competitiveness•Project will improve the design o f the Government’s $3 billion stimulus package (two thirds of which is infrastructure) and help finance its implementation.•Project will generate employment opportunities for the poor,

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Outline






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Development Policy OperationsDevelopment Policy operations provide untied, direct budget support to governments for policy and institutional reforms aimed at achieving a set of specific results in the infrastructure sectors.

• At a time when the access to financial market was restricted• Have been instrumental in helping client countries preserve infrastructure spending• In parallel, cutting-edge expertise and policy advice have been provided to help middle-income

countries design and implement policy and institutional reforms for addressing the direct and indirect impact of the crisis

Lending for DPOs with infrastructure increased by more than two-fold from FY2008 to FY2009 while the number of DPOs increased by 23%

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Policy Matrix Provisions/Triggers for Infrastructure Sectors

• Access to modern, affordable and cleaner energy services;• Magnitude of transmission and distribution losses (both technical and

commercial losses);• Consumer energy tariffs towards being more cost-reflective, decrease in

subsidies or cross-subsidies, etc.• Share of renewable energy and energy efficiency/demand side

management projects and programs, including cogeneration;

Energy

• Introduction of competition for provision of transport services; • Open market access for transport services providers without

administrative restrictions on corporate ownership; • Provisions to distinguish public service obligations from regular

commercial activities and compensate them accordingly.

Transport

Water

•Number of service providers that are joint stock companies •Consumer tariff levels as % of properly accounted operating costs or maintenance budget as % of revenues.•Collection rates.•Number of service providers that have technically audited performance indicators and/or financially audited financial statements.•Transparency indicators, such as tariffs or other information made available to the public via publications in the mass-media; publication of annual report.

Development Policy Operations

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- $1.5 billion single tranche DPL approved in September 2009

-Supports stimulus of the economy while strengthening the

framework for long-term sustainable growth- The DPL aims to:

1. Implement a verifiable, targeted and cross-sectoral strategy for emission Program reductions;

2. Establish institutions, regulations and monitoring capacity to allow for the reduction of emissions in urban transport, energy' generation and

efficiency; and3. Institutionalize the appropriate financing mechanisms to allow for

the reduction of emissions in, urban transport, energy generation.

Indonesia Third Infrastructure DPL Mexico Framework for Green Growth

Development Policy OperationsExamples

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Outline






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Donor Harmonization

• Provides Platform for Development Partners to Work Together

More than 20 development partners participated in the INFRA Partners Forum in June 2009 and agreed to find ways to work together in support of critical infrastructure initiatives

• Projects of interest were discussed• Project pipelines were shared

Donor Harmonization

Kazakhstan South-West Roads Project

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EBRD,0.2bn

Asian Dev. Bank &

JICA, 0.9bn

Islamic Dev. Bank

0.5bn

IBRD, 2.5bn

Gov. of Kazakhsta

n 1.9bn

Guiding Principles: Synchronized parallel financing for

corridor; Uniform technical standards; Common framework for

environmental and social safeguards; and

Technical assistance and institutional strengthening to complement investments.

Coordinated Project Preparation: ADB took lead on social, land acquisition,

and economic analysis WB took lead on environmental analysis

and safeguards

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Donor Harmonization

Ethiopia Protection of Basic Services(PBS) Program Project Figure 1: Ethiopia PBS - II Donor Contributions and Project Components ($ billion)

- Project to expand access and improve the quality of basic services in education, health, agriculture, water supply and sanitation, and rural roads in Ethiopia

- Being jointly implemented by the World Bank and twelve other partners - African Development Bank, Austria, Canadian International Development Agency, Department for International Development, European Commission, Irish Aid, Italy, KfW, Netherlands, Spain, and Japan.

- World Bank’s IDA financing of $540 million is being supplemented by at least $0.8 billion from other development partners, for overall donor financing of $1.3 billion.

- Development partners will undertake joint missions and follow-up; conduct joint Program performance assessments; and align their disbursements to the Government’s budget cycle as much as possible.

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Donor Harmonization

Arab and Islamic Funds

Arab World Initiative

• Appreciation for Arab World Initiative (AWI) announced by the Bank President and continued interest in partnering with the World Bank to move the Arab World Initiative forward.

Energy for the Poor Initiative.

• A key area of focus for the OPEC Fund for International Development (OFID) and the Saudi Fund.

• Includes: (i) collaboration through co or parallel investment in energy projects and (ii) establishment of a dedicated fund to drive specific energy related studies, pre-investments and other strategic initiatives.

• Up to $3 billion in funds to be leveraged from OFID, Saudi Fund and IDB

Regional Initiatives.

• MENA regional CSP and cross-border transmission (IDB, SFD, Kuwait Fund, OFID, Abu Dhabi Fund for Development, Arab Fund) as well as Cross Border Transport and Trade Facilitation

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Donor Harmonization

Arab and Islamic Funds

Initial interest expressed in collaboration in some 14 projects across Africa with preliminary commitments made totaling well over $200 million

Congo Inga III Hydropower Station ($8000 million)

East Africa Transport Link ($600 million)

Tanzania Energy Development and Access Expansion Project ($135 million)

Senegal Sustainable and Participatory Energy Management Project ($20 million)

Cameroon Lom Pangar Hydropower Project ($430 million)

Mozambique Regional Transmission Backbone ($90 million)

Ethiopia Gibe III Hydropower Station ($700 million)

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Outline






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Innovative Instruments

Direct Finance

•Development Policy Operations•Additional financing•Guarantees•Sub-national financing•IBRD enclave financing in IDA countries•Risk management products for IBRD countries

Parallel Finance

•Financing from different bilaterals and IFIs for infrastructure projects

INFRA is using the full range of WBG instruments

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Innovative InstrumentProjects

-Project involves use of Clean Technology Fund

(CTF) - Under the project, $500 million of IBRD financing and $100 million of CTF

financing will be provided to two Turkish private

sector banks - These Bank will provide

financing to support (a) renewable energy sources through the

acceleration of small hydro, wind energy and

geothermal projects, and through support for the use

of emerging renewable technologies such as solar

and biomass(b) supporting the

development of energy efficiency investments.

- Project involves use of Deferred Drawdown Option

(DDO)

- The operation provides $100 million to help the government weather the current global economic

turbulence without jeopardizing successful reform implementation.

- Reforms supported by operation include parastatal reform action plans, by the

Central Water Authority, Wastewater Management

Authority, Central Electricity Board, and Sugar Planters

Mechanical Pool Corporation, to improve

operational efficiency and service delivery.

- Project involves the use of Guarantees

- $242 million partial credit guarantee and $136 million

IBRD loan

- The project consists of (1) a 600 MW coal-fired power station, related transmission

lines, substation, and backup water supply

system, (2) low-carbon strategy and alternative

energy projects preparation, and (3) institutional and

capacity building technical assistance to the

Government

Turkey Renewable Energy and Energy Efficiency

Botswana Morulpule B Generation and Transmission

Mauritius Trade and Competitiveness DPL DDO

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Outline






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How can countries absorb

fiscal stimulus resources and

within what sectors?

Fiscal and financial

constraints assessment

Infrastructure needs and

spending assessments

Policy, regulatory framework

assessment

What are the

key sub-

sector and

program/proje

ct entry points

for INFRA support

?

Detailed sub-

sector analyses

Sub-sector Portfolio

Performance Reviews

1. Strategic Country Reviews 2. Infrastructure Portfolio Assessments

INFRA Diagnostics Diagnostic Tools and Guidance Notes

A. Diagnostic Tools

Region Country Sector Status

East Asia and Pacific Indonesia, Philippines, Vietnam

Power Complete

Indonesia, Philippines, Vietnam

Transport, Water and Sanitation

Ongoing

Mongolia All Infrastructure Ongoing

Eastern Europe and Central Asia

Armenia, Romania, Ukraine, Kyrgyz Republic

Power Ongoing

Latin America and Caribbean

Peru All Infrastructure Complete

Colombia, Jamaica, Mexico, Peru

Power Ongoing

Middle East and North Africa

Tunisia, Egypt, Jordon, Morocco

Power Complete

South Asia Bangladesh, India Power Ongoing; India Pending GOI approval.

INFRA DiagnosticsStatus of Diagnostics

Vietnam • Large financing gaps

in infrastructure sectors, ranging from US$200 m a year in water & sanitation to US$1 billion a year in expressways

• Challenges in raising finance; GOV plans to access local bond markets but has received very little response

Philippines • Indication of lags

between planned and actual infrastructure spending, with low disbursements expected from principal infrastructure agencies

• Tightening of credit with foreign banks unwilling to participate at levels above US$100 million. There has been flight to quality and cost of capital has increased.

Indonesia • The national energy utility,

PLN, is facing a funding gap of US$ 5 bn; its debt capacity has been impacted by the 17% depreciation of the IDR vs. the US$

• Of the 62 IPPs representing 8,658 MW of capacity, 31 projects in preparation are still trying to reach financial close

INFRA DiagnosticsResults of Diagnostics

Thank You!

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