Transcript Infrastructure VP BIG PRESENTATION Presentation to

Infrastructure Action Plan:
An Update
Presentation to the
Advisors of the Executive Directors
Unmet Infrastructure Needs are Tremendous
Access and Quality Challenges
Financing Needs
 Infrastructure access is insufficient
in most developing countries
Total annual financing needs for all
developing countries:
• Rural LIC electricity access is ~ 20%
• Rural LIC water access is ~ 53%,
sanitation 42%
• Even in MICs, access rates are still low
• Rural MIC electricity access is ~ 67%
• Rural MIC water access is ~ 75%,
sanitation 60%
• Rural infrastructure access is roughly 30%
lower than urban
 Access challenge compounded by
issues of low infrastructure quality
• e.g. frequent power interruptions and
outages
~ 7% of developing country GDP
Total Financing Needs & Gaps, 2000-10:
Country Income
Category
Expenditure
Needs*
(% of GDP)
Total Fin.
Gaps*
(% of GDP)
LDC Average
6.5-7.7%
3.1-4.3%
Lower-income
7.5-9.0%
3.5-5.0%
Middle-Income
5.7-7.0%
2.9-4.3%
* Includes investment and O&M expenditures (each about 50% of total)
Infrastructure Impacts on the MDGs, Poverty, and Growth
Economic Rates of Return
Economic Rates of Return (ERR) on
World Bank Infrastructure Projects
40
35%
35
“Back of the envelope calculation”
 Traditional impact of infrastructure
investments on poverty reduction
around 1.5-2%
 Filling financing gaps in infrastructure
could double poverty reduction rates
30
ERR at Evaluation (%)
Poverty & MDG Impact
• In LICs, filling investment gaps could raise
the poverty reduction impact to 3.9-4.8%
25
20%
20
Infrastructure impact on poverty reduction rates:
15
10
5
0
FY64-FY99
FY99 - FY03
Country Income
Category
Historical
rate
Potential
rate
Lower-income
2.1%
3.9-4.8%
Low-middle
income
1.5%
2.9-3.7%
Significant Progress on Implementing the Infrastructure Action Plan

Action Plan introduced to revitalize the Bank Group’s infrastructure
business – July 2003

The Board’s and Senior Management’s consistent communication on
the importance of infrastructure enabled the successful
implementation of the Action Plan

Regional management teams have also swiftly responded to
increased client demand for infrastructure
 e.g. South Asia regional strategy
 e.g. some key new CASs (Indonesia)
Change in the Paradigm: Provided Guidance on Roles of the
Private and Public Sectors
Key Messages from the Power Sector Guidance Note
The Guidance Note on Public and Private Sector Roles in the Supply of Electricity Services addresses the range of options, from purely
private to purely public, that most Bank client countries will face as they work with Bank Staff to reform their power sectors and improve
efficiency and growth. The Guidance Note offers the following key messages:
Example: Power Sector
Generation:
Private financing, whether from local, regional or international investors, is preferred. Most governments can
create a substantial role for private generators within their sector development strategies. Nonetheless, public
support, in the form of IDA/IBRD guarantees and other forms of credit enhancement, will be a critical
component of many private financings in the generation, along with IFC and MIGA products.
 Generation: domestic or international private
financing preferred
Transmission:
Depending on country policy and sector circumstances, there are substantial lending, guarantee, and insurance
 Transmission:
substantial Bank Group
opportunities for the Bank, IFC, and MIGA. The Bank could commit lending to state-owned transmission
opportunities
(lending/
guarantees)
companies, as a exist
key component
of an overall
sector development program, provided that minimum corporate
governance standards are met.
Distribution:
Distribution:
lending
onlyorto
well performing
Where public provision
is working,
improvements
in performance in a public utility are underway, the Bank
can
consider
providing
financial
support.
Where
it
is
not, some form of public private partnership should be
public utilities; otherwise public-private
considered, such as concession and OBA projects that can attract private investment, focusing on
partnerships
toservice
be considered
improvements in
quality and service expansion. If private investment still cannot be attracted, then
Guidance Notes also
prepared for the Water &
Governments should provide for long-term capacity building but should fix, to the extent possible, provisions
for prices and technical and customer service standards in the key regulatory instruments, such as licenses or
Sanitation, Gas, Transport,
contracts, for a medium-term period. Regulatory frameworks should be designed bearing in mind local
capacities and institutional approaches.
and ICT sectors –
management contracts/leases, accompanied by public investment in part financed by the Bank, can be
considered as an interim step.
Regulation:
ready in April 2004
Strengthened Infrastructure Lending Pipeline for FY04 & FY05
Bank Infrastructure Lending - FY02-FY05*
Pre-Action Plan
Action Plan
Potential FY04
Lending:
up to $6 billion
IBRD
Commitment $m
6,000
$5.3b
IDA
$5.4b
4,000
Potential FY05
Lending:
~ $6.5-$7 billion
2,000
0
FY02
FY03
FY04
FY05
IFC also projected to increase infrastructure activities;
MIGA projected to be stable
* The results of FY04 and FY05 infrastructure deliverables will depend heavily on the allocation of the remaining IDA 13 envelope
Strengthened Infrastructure Diagnostic Work
Recent Economic Developments in
Infrastructure (REDIs)
 The REDI: Standardized diagnostic of
the infrastructure sectors
WB-EBRD
Europe and
Central Asia
Regional Study
 REDIs can be:
 an infrastructure snapshot
 a partial infrastructure diagnostic
 a full infrastructure diagnostic
 Can help develop new business and
policy based operations for a given
country
 Include assessments of access,
affordability, quality, efficiency, financial
autonomy, fiscal costs, institutional
development, and governance
Latin America &
Caribbean- REDIs:
Colombia
Peru
Europe and
Central AsiaREDIs:
Bosnia
Bulgaria
Middle East and
North Africa- REDIs:
West Bank/Gaza
Morocco
Africa REDIs:
Madagascar
Mauritania
Senegal
WB-IDB
Latin America
Regional Study
WB-JBIC-ADB
East Asia Regional
Infrastructure Study
South AsiaREDIs:
India
East Asia and
Pacific- REDIs:
Vietnam
Indonesia
Philippines
Mongolia
Invested in Infrastructure Performance Indicators
Monitoring Sector Performance
at the global level
Core Infrastructure
Indicators in All Sectors
 Tracking progress toward MDGs
 Contributing to corporate reporting (e.g.
Global Monitoring)
 Supporting IDA 14 indicators
 Access
 Quality
 Affordability
 Cost Efficiency/
Financial Sustainability
Improving Resource Allocations
at the country level



Identifying priority sectors/ interventions
Contributing to results-based CASs
Providing input into analytical work
Improving Performance Mgmt.
at the project level


Benchmarking key performance indicators
(e.g. utilities)
Demonstrating impact and results of
specific projects
Strengthening the Bank Group’s Instruments and Approaches
Strengthening Bank
Group risk mitigation
instruments
 increased CAS
envelopes for IBRD
guarantees
Developing a systematic
cross-sectoral policy
research program
 in collaboration with other units
Expanding work at
the regional/ crosscountry level
 especially in the Africa
Region
Bank Group
instruments &
approaches
Exploring subsovereign Bank Group
engagement
 the Municipal Fund
Improving World
Bank Group
collaboration
 expanded
IFC/IDA blend
financing in Africa
Staffing and Budget Constraints
Staffing/Human Resources
 Staffing levels
• 30% decrease in infrastructure sector
staff from FY99-03
 Staffing plans-FY04
• About 115 gross new staff (55 net) to be
recruited in FY04
• Anchor “incubated” for the regions about
20 staff
• Anchor provided high levels of crosssupport
 Staffing skills
• Balanced technical/ sectoral depth and
cross-sectoral/ integrative skills
Continued hiring will depend on
medium-term budget planning
certainty
Budget ($)
 Infrastructure budgets decreased
• Regional budgets down 10% from FY00-03
 Credit line use in infrastructure
• $8m allocation in FY04 for infrastructure
• Infrastructure one of three sectors to receive
credit line funding
• Credit line will finance about 15% of the
increased delivery in FY04 and FY05
 Credit line contingent liabilities
• $8 million credit line allocated in FY04
implies appraisal/supervision costs of up to
$16 million for subsequent years
Credit line has been very useful for
infrastructure, but must remain truly
additional to country base budgets
Key Challenges Going Forward
Revitalizing the Bank Group’s
infrastructure business is a
medium-term challenge
Ensuring better Bank
Group collaboration on
infrastructure
Addressing fiscal
constraints to
public investments
Ensuring infrastructure
retains its high quality
ratings - currently the
highest of any network
Improving Bank
Group services in
Middle-Income
Countries
Engaging the public
on infrastructure’s
impact on poverty
reduction
Infrastructure Action Plan Website
For more information on the Infrastructure Action Plan,
please visit our website:
http://fpd-int.worldbank.org/plan.nsf