| Title | Authors | Date |
| Output-Based Aid in Infrastructure: A Tool for Reducing the Impact of Corruption | Yogita Mumssen and Charles Kenny | 8/1/2007 |
| Global Partnership on Output-Based Aid Publication |
| Corruption in infrastructure leads to big losses. Estimates of the share of construction spending lost to bribe payments around the world range from 5 percent to more than 20 percent. It is important to reduce the financial cost of corruption by limiting bribe payments. But even more important is to ensure that corruption does not reduce the quantity and quality of infrastructure provision. Output-based aid (OBA) is a tool that can help achieve these goals. (Size 0.26MB) |
| Mobilizing Private Finance with IBRD/IDA Guarantees to Bridge the Infrastructure Funding Gap | Jeff Delmon | 6/26/2007 |
| World Bank Publication |
| Where markets and institutions are not sufficiently developed to attract private participation, innovative risk mitigation instruments and applications can help to bridge the infrastructure funding gap. This paper describes the guarantees that the World Bank uses to catalyze private finance for infrastructure. It seeks to demystify these products: partial risk guarantees (PRGs) and partial credit guarantees (PCGs), and help the reader to make a better assessment of when a guarantee would be a useful addition to a project and which product would be the most appropriate. (Size 0.45MB) |
| Helping a new breed of private water operators access infrastructure finance | Meera Mehta, Kameel Virjee, and Serah Njoroge | 5/01/2007 |
| PPIAF (Public-Private Infrastructure Advisory Facility) Gridlines Note No. 25 |
| Small-scale providers of water services are no longer seen as merely temporary substitutes for formal utilities. In many developing countries governments and donors increasingly view them as long-term partners in the work to extend and improve water services, particularly as governments accelerate efforts to meet water targets associated with the Millennium Development Goals. But a host of problems complicate efforts to make small-scale providers productive partners, including their lack of access to finance. In Kenya, a collaborative program is bringing together community-based organizations and microlenders to provide better water services to poor people-and generating lessons for similar initiatives.(Size 1.03MB) |
| Private Participation in Electricity: The challenge of achieving commercial viability and improving services | Bernard Tenenbaum and Ada Karina Izaguirre | 5/01/2007 |
| PPIAF (Public-Private Infrastructure Advisory Facility) Gridlines Note No. 21 |
| Private activity in electricity in developing countries has stabilized at modest levels since 2001. The main focus remains greenfield power plants, particularly those with contractual arrangements that protect investors from sector risks. Long-term guarantees of regulatory performance and leases and management contracts have encouraged some private activity in distribution. Attracting significantly more investment will require greater commercial viability, including cost-reflective tariffs, better collection ratios, well-targeted and sustainable subsidies, and improved quality and reliability of service. In most countries, a move toward cost-reflective tariffs will not be politically feasible unless it goes hand in hand with visible improvements in quality of service. (Size 1.01MB) |
| Cross-Border Infrastructure Toolkit | Rita Nangia and Evangeline Sucgang | 5/01/2007 |
| Joint ADB and PPIAF Publication |
| A new product is available from Asian Development Bank to help governments design cross-border infrastructure projects. Created as part of the Phnom Penh Plan for Development Management’s capacity building program for the Greater Mekong Region, this guide will be useful for all governments developing regional infrastructure programs. |
| Review of Risk Mitigation Instruments for Infrastructure Financing and Recent Trends and Development | Tomoko Matsukawa and Odo Habeck | 5/01/2007 |
| World Bank Publication |
| The paper reviews risk mitigation instruments (i.e. guarantees and insurance) used in the financing of public and private infrastructure projects in developing countries. The objective of the paper is to provide a concise yet comprehensive guide as well as reference information for practitioners of infrastructure financing, including government officials and private sector financiers. The paper summarizes the characteristics of major instruments and providers, discusses recent trends and development in meeting risk mitigation needs, and presents 18 transaction cases (Appendix A) and the instruments offered by 30 multilateral/bilateral institutions including World Bank, MIGA and IFC (Appendix B). |
| Government Guarantees Allocating and Valuing Risk in Privately Financed Infrastructure Projects | Timothy C. Irwin | 4/15/2007 |
| World Bank Publication |
| This book aims to help governments respond to such requests. As well as seeking to make precise the oft-invoked principle that risks should be allocated to those best placed to manage them, it explains how governments can value the guarantees they are thinking of granting and how they can modify aspects of public-sector management to improve the likely quality of their decisions about guarantees. |
| Will Markets Direct Investments Under the Kyoto Protocol ? | Breustedt, Gunnar and Larson, Donald F. | 2 /1/2007 |
| World Bank Policy Research Working Paper 4131 |
| Under the Kyoto Protocol, countries can meet treaty obligations by investing in projects that reduce or sequester greenhouse gases elsewhere. Prior to ratification, treaty participants agreed to launch country-based pilot projects, referred to collectively as Activities Implemented Jointly (AIJ), to test novel aspects of the project-related provisions. Relying on a 10-year history of projects, the authors investigate the determinants of AIJ investment. Their findings suggest that national political objectives and possibly deeper cultural ties influenced project selection. This characterization differs from the market-based assumptions that underlie well-known estimates of cost-savings related to the Protocol's flexibility mechanisms. |
| Output-based Aid and Carbon Finance | Veronique Bishop, Lars Johannes | 12 /1/2006 |
| GPOBA Publication |
| Carbon finance is an output-based approach to mitigating climate change. Under the Kyoto Protocol’s project-based mechanisms—the Clean Development Mechanism and Joint Implementation— projects in developing and transition economies that reduce greenhouse gas emissions can receive "carbon credits." Carbon revenues can help project sponsors close the financing gap between climate-friendly projects and conventional projects, and can help industrial countries reduce their cost of compliance with the Kyoto Protocol. |
| The fiscal framework and urban infrastructure finance in China | Ming Su and Quanhou Zhao | 11 /1/2006 |
| World Bank Policy Research Working Paper 4051 |
| China has experienced more than 25 years of extraordinary economic growth. Underlying this growth has been a decentralized fiscal system, in which provinces and large cities are given the freedom to make infrastructure investments to stimulate local development, and are allowed to retain a large part of the fiscal revenues that are generated from economic activity. Although successful as a growth strategy, this policy created problems for national fiscal management.The authors recommend greater use of the revenue streams from infrastructure assets as a financing source, and gradual relaxation of central political control over subnational debt. One step in this direction would permit leading cities to issue municipal bonds based on objective financial standards. (Size: 0.35 MB) |
| Urban infrastructure finance from private operators : what have we learned from recent experience ? | Patricia Clarke Annez | 11 /1/2006 |
| World Bank Policy Research Working Paper 4045 |
| The author examines the role of private participation in infrastructure (PPI) in mobilizing finance for key urban services, that is, urban roads, municipal solid waste management, and water and sanitation since the early 1990s when private participation came to be seen as a key element in infrastructure development. Her review indicates that for financing urban services, PPI has disappointed-playing a far less significant role than was hoped for, and which might be expected given the attention it has received and continues to receive in strategies to mobilize financing for infrastructure. The author's findings suggest a more pragmatic and selective approach to the focus on PPI as a source of finance, and more focus on the array of some of the fundamental steps, among them strengthening the public finances of cities to improve both the capacity to deliver services and to reduce the risks that private investors must take when they invest in urban infrastructure. (Size: 0.28 MB) |
| Land leasing and land sale as an infrastructure-financing option | George E. Peterson | 11 /1/2006 |
| World Bank Policy Research Working Paper 4043 |
| Municipal land sales provide one option for financing urban infrastructure investment. In countries where land is owned by the public sector, land is by far the most valuable asset on the municipal balance sheet. This paper shows that in China many municipalities have financed more than half of their high rates of infrastructure investment from land sales, for periods of 10 to 15 years. Much of the remaining investment has been financed by municipal borrowing against the collateral of land values. Other countries also have turned to land sales and leasing for infrastructure finance. However, financing municipal infrastructure investment through land sales creates special risks that are not recognized in most intergovernmental fiscal frameworks. Sound intergovernmental fiscal management will require tighter regulation of municipalities' financial leveraging of land assets to avoid excessive risk taking by local governments. ( Size: 0.25 MB) |
| Mobilizing urban infrastructure finance within a responsible fiscal framework : South African case | Philip van Ryneveld | 11 /1/2006 |
| World Bank Policy Research Working Paper 4042 |
| Since South Africa held its first democratic elections in 1994, it has given significant attention to building an effective system of decentralization including provincial and local government. While provincial governments are responsible mainly for the implementation of social services such as health and education, the provision of much of the urban infrastructure is the responsibility of local government. The system of financing local government seeks to place accountability firmly at the local level, with most revenues in the larger urban centers raised locally through a combination of local taxes and fees for services, while poorer regions are predominantly grant funded. The paper concludes by recommending that the existing division between provinces as providers of social services and local governments as the key locus of responsibility for services related to the built environment should be strengthened, particularly through the devolution of more urban transport related functions. A number of key risks are also highlighted, including issues related to the reform of local business taxes. (Size: 0.25 MB) |
| State and Trends of the Carbon Market 2006 Update: (January 1- September 30, 2006) | Karan Capoor and Philippe Ambrosi | 10/26/2006 |
| World Bank publication |
| In the first nine months of 2006, the carbon market grew to nearly $22 billion, more than doubling in value over the almost $11 billion recorded in 2005. This and other current statistics are revealed in the State of the Carbon Market Report update released on October 26 at Carbon Expo Asia in Beijing by the World Bank and the International Emissions Trading Association. As the carbon market continues to grow, there is much concern over what will happen beyond the Kyoto Protocol's first commitment period (2008-2012). (Size: 0.12 MB) |
| Infrastructure at the Crossroads: Lessons from 20 Years of World Bank Experience | World Bank | 9 /1/2006 |
| World Bank publication |
| This publication brings together lessons from the last two decades of World Bank engagement in infrastructure. It analyzes trends in the Bank's infrastructure lending, describes the evolution of the external environment and the Bank's own strategic priorities, and presents lessons about project design and appraisal, poverty focus, private sector participation, environmental and social sustainability, the issue of corruption, and stakeholder communications. (Size: 0.62 MB) |
| Sub-national development program | The World Bank | 6/30/2006 |
| World Bank Board Paper 36934 |
| This paper seeks endorsement of the Boards of Directors for a pilot Sub-National Development (SND) Program using a joint Bank/IFC business model to support the development of sub-national entities - local governments, public utilities, and development finance institutions, although the primary focus of the program will be local governments and local utilities. The goal of the Program is to help these entities to expand and improve infrastructure and other public services. The Program will accomplish this by using two instruments to improve their financial and operational management and corporate governance: technical assistance and financial support. (Size: 0.75 MB) |
| Subnational fiscal sustainability analysis: what can we learn from Tamil Nadu? | Elena Ianchovichina, Lili Liu, and Mohan Nagarajan | 6/1/2006 |
| World Bank Policy Research Working Paper 3947 |
| In the late 1990s the Indian state of Tamil Nadu experienced an unprecedented fiscal deterioration: current expenditure outgrew total revenue, leaving little fiscal space for infrastructure spending. The paper presents a framework for subnational fiscal sustainability analysis and applies it to Tamil Nadu where subsequent fiscal adjustment has been ambitious and politically challenging, but has promised to put state finance on a sustainable path and create fiscal space for infrastructure investment. Decentralization has given subnational governments in developing countries significant spending and taxation responsibilities, and the capacity to incur debt. The fiscal stress of the Indian states echoed the fiscal crises of subnational governments in several other major emerging economies. (Size: 0.37 MB) |
| Is cost recovery a feasible objective for water and electricity? The Latin American experience | Vivien Foster and Tito Yepes | 6/1/2006 |
| World Bank Policy Research Working Paper 3943 |
| Given the relatively small segment of the population that faces genuine affordability problems in Latin America, there appears to be a promising case for using targeted subsidies to reconcile the cost recovery objective with social protection concerns. Social tariff schemes of various kinds are already widespread in Latin America, but they suffer from a number of design flaws. Increasing block tariff (IBT) structures are the most prevalent form of social tariffs in the region. These are likely to be more successful in the electricity sector than in the water sector because the correlation between consumption and income is much stronger in the case of electricity than water. Moreover, IBT structures in electricity tend to be much better designed than in the case of water, with lower fixed charges, lower subsistence blocks, and steeper gradients. A number of more sophisticated social tariff schemes are also being applied that combine consumption criteria with some form of socioeconomic screening. These are generally found to perform better than IBTs, although they also present significant room for improvement. (Size: 0.43 MB) |
| State and Trends of the Carbon Market 2006 | Karan Capoor and Philippe Ambrosi | 5 /1/2006 |
| World Bank publication |
| The overall value of the global aggregated carbon markets was over US$10 billion in 2005. In the first quarter of 2006, overall transactions worth US$7.5 billion had led some to predict that this new financial market would be valued at between US$25-30 billion in 2006. This study explores the project-based market in particular. The objective of this study is to get a representative sense of the activity of the carbon markets, their evolution over time up to April 2006, and sketch the likely trends in the future. (Size: 0.2 MB) |
| Reform, private capital needed to develop infrastructure in Africa | James Leigland and William Butterfield | 5 /1/2006 |
| PPIAF (Public-Private Infrastructure Advisory Facility) Gridlines Note No.8 |
| In Sub-Saharan Africa the story of private participation in infrastructure has been largely one of telecommunications. With other sectors taken into account, the levels of private activity have been low for the past 15 years. Still, the overwhelming need for infrastructure has motivated regional economic organizations to push for an ambitious agenda of private participation. But to begin solving Africa’s infrastructure investment problems will also require broad institutional reform along with greater financial commitments by governments and donors. The private sector appears capable of supplying only a fraction of the estimated US$5–12 billion a year in additional infrastructure finance that Africa needs to meet its Millennium Development Goals for infrastructure. (Size: 1.7 MB) |
| Lifting constraints to public-private partnerships | Bhavna Bhatia and Neeraj Gupta | 5 /1/2006 |
| PPIAF (Public-Private Infrastructure Advisory Facility) Gridlines Note No.6 |
| For countries in South Asia, bridging gaps in infrastructure is key to achieving goals for growth and poverty reduction. Over the years governments have underinvested in infrastructure assets and especially in maintaining them. Private investment has also been limited. Today policymakers increasingly recognize that public-private partnerships in infrastructure offer the most promise for developing infrastructure and improving services. How to ensure that such partnerships can succeed? Act on critical policy, regulatory, and institutional reforms, pay close attention to the design of transactions, and tackle key constraints to private participation. (Size: 1.8 MB) |
| Expanding the frontiers of telecom markets through PPP and reforms | Robert Stephens, Jorge Bossio, and Jean-Christophe Ngo | 5 /1/2006 |
| PPIAF (Public-Private Infrastructure Advisory Facility) Gridlines Note No.5 |
| Peru introduced private participation in telecommunications in the early 1990s, along with wide-ranging reforms fostering competition and independent regulation. These efforts attracted some US$8.3 billion in private investment in the sector in 1990–2004. To help bring telephone service closer to Peru’s poorest and most isolated areas, a pioneering fund offered subsidies to attract investment by private operators. Initial efforts led to impressive achievements, though slow implementation left room for improvement. A PPIAF-funded assessment of the first projects helped design the next generation of initiatives— and pointed to lessons for other developing countries. (Size: 1.6 MB) |
| The role of developing country firms in infrastructure | Michael Schur, Stephan von Klaudy, and Georgina Dellacha | 4/1/2006 |
| PPIAF (the Public-Private Infrastructure Advisory Facility) Gridlines Note No.3 |
| Developing country investors have emerged as a major source of investment finance for infrastructure projects with private participation. Indeed, in 1998–2004 these investors accounted for more of this finance in transport across developing regions—and for more in South Asia and Sub-Saharan Africa—than did investors from developed countries. For policymakers this development suggests a need to rethink the criteria used in selecting investors in schemes for private participation, which have been biased toward large international operators. (Size: 1.7 MB) |
| Will consolidation improve sub-national governments? | William F. Fox, Tami Gurley | 5/5/2006 |
| World Bank Policy Research Working Paper 3913 |
| Local government size varies dramatically around the world. In Sudan, Cote d'Ivoire, and the United Kingdom, municipalities average more than 125,000 people. Those in many European countries have less than 10,000 people. Countries often consider consolidation of local governments as a means to lower service delivery costs, improve service quality, enhance accountability, improve equity, or expand participation in government. The authors review a number of theoretical arguments and empirical findings concerning the size of sub-national governments. (Size 0.33 MB) |
| Connecting Residential Households to Natural Gas: An Economic & Financial Analysis | Franz Gerner and Scott Sinclair, | 4/1/2006 |
| GPOBA Working Paper Series No. 7 |
| The natural gas market has changed considerably in Egypt. The country has evolved as a major international gas exporter. Industrial customers in the domestic market are increasingly relying on natural gas to meet their energy needs. Natural gas is already used as a major source of energy and feedstock in the power, fertilizer, and petrochemicals sectors. The country now has a well-developed high-pressure transmission network in Nile Delta to supply industrial load. This paper aims to analyze the overall macro- and micro-economic costs and benefits of switching residential households to natural gas. (Size 1.4 MB) |
| The distributional incidence of residential water and electricity subsidies | Kristin Komives, Jonathan Halpern, Vivien Foster, Quentin Wodon and Roohi Abdullah | 4/1/2006 |
| World Bank Policy Research Working Paper 3878 |
| Subsidies to residential utility customers are popular among policymakers, utility managers, and utility customers alike, but they are nonetheless the subject of much controversy. Both the affordability and redistributive arguments for subsidies are based on the presumption that poor households benefit disproportionately from water and electricity subsidies, that they are well-targeted to the poor. The authors test this assumption by examining the extent to which the poor benefit from consumption and connection subsidies for water and electricity services. (Size 0.35 MB) |
| Postconflict Infrastructure: Trends in Aid and Investment Flows | Jordan Schwartz and Pablo Halkyard | 3/17/2006 |
| World Bank Public Policy Journal Issue 305. |
| As war and civil strife subside, can governments turn to the private sector to restore basic services? Postconflict countries suffer from disproportionately low levels of private investment in infrastructure, with only small-scale service providers likely to emerge during and right after conflict. Larger investors are slow to enter, and when they do they focus almost exclusively on the easily secured and most profitable subsectors. Yet some countries have been able to couple aggressive reform and liberalized policies to attract infrastructure investments soon after conflict abates. What does their experience tell us? (Size 0.2 MB) |
| Do current water subsidies reach the poor? | Vivien Foster, Subhrendu Pattanayak and Stalker Prokopy | 1/1/2006 |
| WSP Water Tariffs and Subsidies in South Asia Paper 4 |
| There has been no hard empirical evidence to confirm or reject the hypothesis that water subsidies may be failing to reach the poor. This paper summarizes the results of some new survey-based research that estimates that estimates the value of the water subsidy received by individual households in two South Asian cities, and also estimates the income levels of these households. Using both pieces of information together, it is possible to evaluate the extent to which subsidies are actually reaching the poor. The analysis shows that about three quarters of the subsidies available to water utilities in the cities of Bangalore and Katmandu are delivered in a way which completely fails to reach the poor. (Size 0.46 MB) |
| Regional subsidies and industrial prospects of lagging regions | Alexandre Carvalho, Somik V. Lall and Christopher Timmins | 2/1/2006 |
| World Bank Policy Research Working Paper 3843. |
| Large and sustained differences in economic performance across regions of developing countries have long provided motivation for fiscal incentives designed to encourage firm entry in lagging areas, but empirical evidence in support of these policies has been weak at best. The authors undertake a direct evaluation of the most prominent fiscal incentive policy in Brazil, the Fundos Constitucionais de Financiamento (Constitutional Funds. ) (Size 0.39 MB) |
| Water, Electricity, and the Poor: Who Benefits from Utility Subsidies? | Kristin Komives , Vivien Foster, Jonathan Halpern and Quentin Wodon | 11/29/2005 |
| World Bank publication. |
While consumer utility subsidies are widespread in both the water and electricity sectors, their effectiveness in reaching and distributing resources to the poor is the subject of much debate. Water, Electricity, and the Poor brings together empirical evidence on subsidy performance across a wide range of countries. It documents the prevalence of consumer subsidies, provides a typology of the many variants found in the developing world, and presents a number of indicators useful in assessing the degree to which such subsidies benefit the poor, focusing on three key concepts: beneficiary incidence, benefit incidence, and materiality. The findings on subsidy performance will be useful to policy makers, utility regulators, and sector practitioners who are contemplating introducing, eliminating, or modifying utility subsidies, and to those who view consumer utility subsidies as a social protection instrument. (Size 2.4MB)
Also available in Spanish: Agua, electricidad y pobreza: Quién se beneficia de los subsidios a los servicios públicos (Size 3.4MB) |
| Good Practice Note for Development Policy Lending –Subnational Development Policy Lending | Egbert Gerken and Adriana Weisman | 6/27/2005 |
| World Bank, Operations Policy and Country Services. |
| The objective of the 2005 review of Bank conditionality is to document the evolution in the Bank's approach to conditionality, take stock of recent experience, and take a fresh look at the Bank's practice. The review focused on the conditionality associated with the Bank's policy-based lending. The 2005 Conditionality survey represents the first survey by the Bank to directly assess client opinions about working with the Bank on policy-based operations. In interpreting these survey findings, it is important to view them as establishing a baseline of client opinions. Future surveys will be ideally positioned to compare directly the effects of future policy modifications. The three areas where clients rate the Bank's involvement as most effective in their country include: economic management, human development, and financial and private sector development. (Size 0.12MB) |
| Emerging Infrastructure Policy Issues in Developing Countries: A Survey of the Recent Economic Literature | Antonio Estache | 10/1/2004 |
| World Bank Paper Series 3442. |
| Estache reviews the recent economic research on emerging issues for infrastructure policies affecting poor people in developing countries and addresses six main issues: (1) the necessity of infrastructure in achieving the MDG; (2) the various dimensions of financing challenges for infrastructure; (3) the debate on the relative importance of urban and rural infrastructure needs; (4) the debate on the effectiveness of infrastructure decentralization; (5) what works and what does not when trying to target the needs of the poor; and (6) the importance of governance and corruption in the sector. The author concludes by showing how the challenges identified define a relatively well integrated agenda for both researchers and the international infrastructure community. (Size 0.29MB) |
| Finance and Infrastructure |
