Global Infrastructure Forum “Delivering Inclusive and Sustainable Infrastructure”, Washington

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Global Infrastructure Forum “Delivering Inclusive and Sustainable Infrastructure”, Washington

CICA participated in the Global Infrastructure Forum 2017 in Washington on April 22, 2017. Below is a summary of the Opening Plenary “MDB Leadership in the Delivery of Sustainable Infrastructure”.

  • Luis Alberto MORENO, Inter-American Development Bank (IDB) President introduced the forum. To him to achieve the 2030 development agenda of Addis Ababa there is an urgent need to scale up the investments in infrastructure and to go from a one to one project approach to global planning and policies. It is also needed to strengthen the good preparation of the project (Well Prepared Project concept introduced by CICA). He also mentioned the need to engage the capital markets and to create an infrastructure asset class. He talked about the challenge of mobilizing the resources and about the usefulness of platforms such as: SOURCE platform, green platforms, the platform for meeting the Paris Agenda. He gave the example of the Juncker Plan. However he deplored the lack of coordination between portfolio managers of funds and Multilateral Development Banks (MDBs) (fear of currency risk for instance).

 

  • Werner HOYER, European Investment Bank (EIB) President also made some opening remarks. To him, this Global Infrastructure Forum (GIF) is a good example of how MDBs can achieve some collective work. The 2030 agenda is a commitment of all MDBs to work together. A significant progress is made on the Billions to Trillions Strategy. EIB President mentioned increasing the private sector participation and the deployment of policies to facilitate risk mitigation and access to finance. He also underlined the importance of delivering global responses to challenges and climate change. The collaboration of MDBs with development agencies and other development partners to have a holistic view is crucial. Werner Hoyer described the Juncker plan and said a better database on risk is needed. There is an urgent need for more clarity and for an infrastructure asset class. The notion of risk sharing is key. EIB calls for more harmonized due diligence. Finally, he hopes next year the private sector will be on the GIF podium.

 

  • Amina MOHAMMED, United Nations Deputy Secretary-General said bridging the infrastructure gap is central. Invest in the future for millions of jobs for the young people to be created. Governments are hesitant to announce new projects because they do not find the financing. The GIF was created in Addis Ababa to align the objectives of development. Now it is translated in credible and concrete actions in the countries. She welcomed the presence of national development banks in the GIF this year. She calls for co-financing including with the private sector and for innovative partnerships with the private sector. However she deplored the fact the speakers and audience are not representative of the population of the world.

 

  • Takehiko NAKAO, President of Asian Development Bank (AsDB) clarified that the role of the private sector is not new. He also underlined the need to work with the governments who must have a vision, a market oriented vision over the years. Better policies are needed for the private sector to participate in the projects. Better models need to be developed. To sum up, a focus should be made on catalyzing private sector financing and capacity building of the governments. He wishes that next year the private sector will be invited in the GIF meeting in Bali.

 

  • Akinwumi ADESINA, African Development Bank (AfDB) President spoke about leveraging the private sector and making infrastructure projects profitable. Africa has huge amounts of pension funds, insurance funds. He called for the creation of an infrastructure asset class for these funds to invest in infrastructure. AfDB is pushing strongly on that also with Africa 50. He also emphasized the need for more transparency and disclosure of contracts. He gave the example of the Africa Integrity Fund which finances investigations to clean up the corruption. He called for a Global Transparency Index. He mentioned the Africa Investment Forum and the need to bring investors and the projects together.

 

  • Suma CHAKRABARTI, European Bank for Reconstruction and Development (EBRD) President talked about the importance of working with municipalities (sub-sovereign level) to improve water supply, public transport, waste services and provide technical assistance. With green action plans, there is a true commitment of the cities. EBRD takes equity in companies investing in the markets. They de-risk both construction and operation for PPP. They did it with MIGA.

 

 

  • Jin LIQUN, Asian Infrastructure Investment Bank (AIIB) President said he represents 50% of the missing population on the podium. 75% of AIIB’s lending is co-financing. For infrastructure development MDBs can work together. AIIB do not have the “end of poverty mission” as the World Bank. They just focus on infrastructure, the rest is a consequence. AIIB is funded mainly by the developing countries to build infrastructure in the developing countries. No competition, only coordination between MDBs: « The youngest can learn from the eldest ».

 

  • Xian ZHU, New Development Bank (NDB) Vice President and Chief Operations Officer explained NDB decided to follow the countries systems in terms of procurement and safeguards. They want to provide local currency financing. They signed a MoU with other MDBs and are looking to do co-financing and knowledge sharing. They see themselves as gap filers. Their role is not to finance bankable projects but to mitigate other projects that are most needed.

 

  • Mansur MUHTAR, Islamic Development Bank (IsDB) Vice President, explained IsDB represents South-South investments. Shareholders of IsDB are only from the South. It consists mostly of infrastructure funds channeled to finance equity for infrastructure projects.

 

  • Jim Yong KIM, World Bank President: Principles of MDBs’ strategy for crowding-in Private Sector Finance for growth and sustainable development were expressed to the G20. It focuses a lot on maximizing an opportunity and go beyond the fact of setting a PPP here and there. Create the conditions for the private sector to invest but also listen to what the private sector says. Decide together when the private sector can do alone and when the MDBs are needed. Understand better to invest where the human and capital investments are most needed. Consider that many jobs will be lost with industrialization. However, he recognized that as of today our MDBs might not be ready for the vision expressed in this forum. Incentives for the individuals in the MDBs organizations are not there.

Read the MDBs Press Release: “Multilateral banks to open collaboration with private sector to boost inclusive, sustainable infrastructure”

CICA also participated in the sessions on “Infrastructure as an Asset Class” and “Building Quality Infrastructure”.

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