Economic and financial crisis imperils …
The economic and financial crisis imperils the preservation of existing assets and the continuation of financing of good infrastructure projects.
Previous crises have demonstrated the impacts on sustainable economic growth of the lack of finances to infrastructure, with severe consequences for countries’ development agendas.
Preliminary research by the Bank Group indicates that roughly US$110 billion worth of new projects risk delay or postponement and about US$70 billion worth of existing projects face financing or refinancing risk.
Poorer developing countries are being crowded out as private investors focus on the largest emerging markets.
The MDGs will not be met in the absence of continuous advancement in the provision of infrastructure services, particularly in Africa and the LDCs.
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OUR CRISIS RESPONSE FOR INFRASTRUCTURE
The World Bank Group is establishing a platform to bridge infrastructure financing, project preparation, and capacity gaps in developing countries that are facing financial distress as a result of the crisis.
The INFRA platform comprises a rapid diagnostic tool to identify at-risk infrastructure projects, a concessional financing window to support the preparation and financing of such projects, initiatives for parallel and donor-financing, and a common reporting system.
Participation in INFRA allows donors to coordinate infrastructure sector efforts more efficiently and quickly reach the poor.
INFRA is one of the three pillars of the Vulnerability Framework: safety nets to the poorest and most vulnerable, support to infrastructure, and support to the private sector. Developed countries are invited to allocate 0.7% of their stimulus packages to support developing countries under distress.
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WORLD BANK GROUP AND INFRASTRUCTURE
The WBG has also taken measures to preserve the infrastructure portfolio and is allocating extra funding for infrastructure expenditure to support countercyclical measures to generate employment and growth.
As of June 2008, the Bank Group’s total active infrastructure portfolio was US$49 Billion.
Infrastructure commitments for FY2008 were US$12 Billion.
