-- Related Links -- Infrastructure

Context

·         Access to basic infrastructure services remains a challenge for many developing countries. Over 1.3 billion people are without access to electricity. The lack of access to safe water also makes many women and children spend several hours per day gathering water. About 783 million people still live without safe drinking water and 2.5 billion people without access to basic sanitation. Lack of access to the nearest market or health center significantly constrains people’s economic and social opportunities. About 900 million rural dwellers worldwide live more than two kilometers―a 20 to 25 minute walk― from the nearest all-weather road. 

·         Infrastructure development is critical to delivering growth, reducing poverty and creating jobs.  Half of the recent acceleration of growth in Sub-Saharan Africa in 2001-05, for example, can be attributed to infrastructure investments.  Lessons learned from the recent global crisis also showed its significance as a powerful counter-cyclical instrument for the public sector.

·         Infrastructure is seen as critical agent to address the more systemic challenges of today’s world, from social stability to rapid urbanization, climate change, natural disasters, and food and energy security. Finding solutions to these challenges requires tackling the inter-connectivity of sectors. This realization―that infrastructure is more than the sum of actions by individual sectors―is shaping the global agenda, from the G-20 Summits in Korea, Cannes and Mexico to Rio+20.

·         Infrastructure, consisting of transport, water, energy and information and communications technology, is at the core of the World Bank Group (WBG) mandate on growth, poverty reduction and broader development.  It now represents the largest business line of the WBG, accounting for 43 percent of the total WBG assistance to client countries and the private sector.

·         The WBG played a strong countercyclical role throughout the global financial crisis by maintaining long-term infrastructure investment programs and by sustaining the potential for private sector-led economic growth and employment creation.  The WBG has emerged as one of the largest multilateral development financiers in infrastructure, with US$25 billion in new commitments in fiscal year 2011.

Strategy

·         In response to this evolving context, the WBG Board of Stakeholders endorsed a new World Bank Group Infrastructure Strategy Update: Transformation through Infrastructure in November 2011.

·         Under the new strategy, the bulk of the WBG’s engagement will continue to be mono-sector interventions in support of access to infrastructure services and growth. But the WBG will scale up its engagement in tackling the more systemic development challenges. This will require reaching out beyond the line ministries and traditional partners; repositioning the WBG in global forums to lead the infrastructure debate; and facilitating knowledge transfer between clients. It will also require new types of projects, called transformational projects, that optimize spatial, green, inclusive and co-benefits.  

·         In Sub-Saharan Africa, for instance, this will emphasize regional projects that connect countries with power grids, broadband, transportation corridors, and large-scale renewable energy. In East Asia, it will involve partnering with city mayors, the private sector, civil society, regional organizations, and other donors to seek solutions to urban resilience and optimize low-carbon growth. In addition, the WBG will look beyond its own capital and mobilize more systematically other sources of finance, including the private sector.

·         The new strategy’s vision is anchored in country realities, with six Bank Group regional action plans outlining how the strategy will be implemented over FY12-15.  The strategy also launches several new tools, including a Joint World Bank-International Finance Corporation Action Plan for Public-Private Partnership (PPP) Scale-Up, which will test a new approach to PPPs in a set of focus countries (Ghana, Kenya, Nigeria, Indonesia, Pakistan and the Caribbean).

Results

·         International Development Association (IDA) credits and grants have constructed or rehabilitated over 30,000 km of road and helped 8.8 million rural people gain access to an all season road.

·         The World Bank helped create almost 70,000 jobs through infrastructure projects across all regions in fiscal year 2010.

·         The World Bank helped over 20 countries adopt strategies for private participation in infrastructure from fiscal year 2008 to fiscal year 2010.

·         The World Bank mobilized an additional US$4 billion from other sources of financing, including the private sector, for International Bank for Reconstruction and Development (IBRD) and IDA infrastructure projects in fiscal year 2011.

Links

Water and Sanitation Program

Energy Sector Management Assistance Program

Global Partnership on Output-Based Aid

Public-Private Infrastructure Advisory Facility

Contact

Catherine Russell: (202) 458-8128, crussell@worldbank.org

Updated March 2012