WASHINGTON, April 25, 2009 — World Bank Group President Robert B. Zoellick today launched two multi-billion infrastructure investment initiatives to help developing countries withstand the global financial and economic crisis.
The World Bank’s Infrastructure Recovery and Assets (INFRA) platform and the Infrastructure Crisis Facility (ICF), set-up by IFC, the World Bank Group’s member focused on private sector investments, will together mobilize more than US$55 billion over the next three years to infrastructure projects in developing countries. Out of this total, US$45 billion is available in lending from the World Bank and US$10 billion is available via IFC. The two initiatives will help to create jobs and lay the foundations for future economic growth and poverty reduction.
As founding partners in the ICF, the German and French governments today were the first to sign a Memorandum of Understanding with the World Bank Group with the intention to contribute€500 million (about US$660 million) through Germany’s development bank KfW and €1 billion (around US$1.3 billion) through France’s development bank Proparco.
“As developing countries are facing the trials of the global economic crisis, it is vitally important that economic stimulus packages in the developed world are accompanied by support to those that cannot afford multi-billion bailouts,” said Zoellick, in launching the new initiatives. “A decline in infrastructure leaves weaker foundations for long-term economic growth that hits the poorest the hardest. We have a chance to avoid the errors of the past and scale up financing and help countries identify critical investments.”
INFRA is designed to assist partner country governments respond to the negative effects of the global financial crisis on their infrastructure services and investment programs. The World Bank’s financing and technical assistance to developing countries is expected to reach US$45 billion over the next three years, and more as development partners join and support the platform. Assistance will be global, but Africa is expected to see a large proportion of investments, given large identified needs on the continent.
The ICF is expected to attract more than US$10 billion to help bridge the gap in available financing for viable, privately-funded or public-private partnership infrastructure projects in emerging markets. IFC will contribute up to US$300 million in equity and may provide as much as US$2 billion in loan co-financing.
Germany’s Development Minister Heidemarie Wieczorek-Zeul said:"As sources of funding dried up, infrastructure projects in developing countries have been left high and dry. And yet, they are needed as key elements of development in order to achieve the Millennium Development Goals. Services such as water and sanitation, energy, transport and telecommunications are vital in the fight against poverty. For this reason our government has included infrastructure financing in developing countries in its second economic stimulus package."
France’s Finance Minister Christine Lagarde said:"These private-public partnerships in the infrastructure sector are a key component not only of the immediate response to the crisis but also of long-term economic growth. Through the signing of this agreement, France is actively taking part in this effort by providing a €1 billion contribution as well as its longstanding expertise in the sector. "
The global financial crisis has depressed investments in infrastructure projects, particularly in developing countries. The total yearly financing gap for infrastructure investments (including maintenance) in developing countries could range from US$140-270 billion, depending on GDP growth scenarios.
Infrastructure projects are widely recognized as key to job creation and laying the ground work for future productivity and growth. Because of its labor intensity, infrastructure is an important element in most government stimulus packages around the globe. The catalytic role of infrastructure in poverty reduction has also been recognized in the Millennium Development Goals (MDGs), which single out access to water supply and sanitation service targets to be achieved by 2015.
The INFRA platform and the ICF will have a particular focus on green investments and will support governments that want to use infrastructure investments to advance the “green agenda” and not lose the momentum on environmental achievements in developing countries. This will be done by leveraging financing for the pipeline of investments from new facilities, such as the Carbon Partnership Facility, Clean Technology Fund, green bonds, and from similar programs managed by other donors.
About the World Bank
The World Bank is a multilateral development institution and one of the world’s largest sources of financial and technical assistance to developing countries around the world. Comprised of 185 member governments, its primary focus is to help the world’s poorest people and the poorest countries. The World Bank uses its financial resources, its staff, and extensive experience to help developing countries reduce poverty, increase economic growth, and improve their quality of life. For more information, visit www.worldbank.org. For more information about the World Bank’s crisis response, visit
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled US$16.2 billion in fiscal 2008, a 34 percent increase over the previous year. For more information, visit www.ifc.org. For more information about IFC’s crisis response, visit www.ifc.org/financialcrisis.