Mobilizing Private Finance with IBRD/IDA Guarantees to Bridge the Infrastructure Funding Gap
Despite increasing private investments, public funding still accounts for the largest share of infrastructure finance in developing countries. The World Bank is improving its products and revising its business processes in order to mobilize more p...
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| Format: | Report |
| Language: | English en_US |
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Washington, DC : World Bank
2022
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| Online Access: | http://documents.worldbank.org/curated/en/357321468340467708/Mobilizing-private-finance-with-IBRD-IDA-guarantees-to-bridge-the-infrastructure-funding-gap http://hdl.handle.net/10986/37382 |
| Summary: | Despite increasing private investments,
public funding still accounts for the largest share of
infrastructure finance in developing countries. The World
Bank is improving its products and revising its business
processes in order to mobilize more private capital and
close the funding gaps that impede so many developing
economies. Public-private partnerships (PPPs) offer
alternatives to attract new sources of private financing and
management while maintaining a public presence in ownership
and strategic policy-setting. These partnerships can
leverage public funds and offer advantages of contracting
with well-qualified private enterprises to manage and
deliver infrastructure services. They are not panaceas and
they require clear goals and objectives, good public
leadership, and strong government institutional capacities
for effective implementation. Experience has demonstrated
that the best way to attract more private capital into
infrastructure is to provide a sustainable and credible
policy and regulatory framework. Where markets and
institutions are not sufficiently developed to attract
private participation, innovative risk mitigation
instruments and applications can help to bridge the
infrastructure funding gap. The World Bank provides
practical tools to help address specific market and policy
risks and leverage larger amounts of private- sector
investment. This paper describes the guarantees that the
International Bank for Reconstruction and Development (IBRD)
and the International Development Association (IDA) use to
catalyze private finance for infrastructure. The report is
organized in four sections. Section one provides background
on guarantees and their development within the World Bank
Group (WBG). Section two discusses the WBG's
constituent institutions and how they shape their
guarantees. Section three describes in more detail the
guarantees offered by the IBRD/IDA, while section four
addresses the extent to which those guarantees can cover key
project risks. |
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