Mobilizing Private Finance with IBRD/IDA Guarantees to Bridge the Infrastructure Funding Gap
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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| Format: | eBook |
| Language: | English |
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Washington, D.C
The World Bank
2007
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| Series: | Other Financial Sector Study
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| Collection: | World Bank E-Library Archive - Collection details see MPG.ReNa |
| Summary: | 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 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. 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. |
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