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Accelerating Infrastructure Delivery

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Accelerating Infrastructure Delivery

New Evidence from International Financial Institutions

World Economic Forum,

15 min read
10 take-aways
Audio & text

What's inside?

International financial institutions offer the world important lessons in funding needed infrastructure.

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Editorial Rating

8

Qualities

  • Comprehensive
  • Applicable

Recommendation

To explain the impact that continuing urbanization has on infrastructure, the World Economic Forum imparts the lessons that international financial institutions (IFIs), such as the European Bank for Reconstruction and Development, have learned in carrying out municipal projects in various service sectors. The report identifies the traits common to successful initiatives, and it describes various project finance and funding models. The most promising funding strategy is “value capture,” which a number of cities already use adroitly. Of course, these ideas are proven and not new or unknown, but getAbstract finds that this text explains them in depth and with context. Project investors, bankers and public officials who want to improve their municipalities’ infrastructure but may lack the necessary know-how will find this report a valuable resource.

Summary

Funding and Financing

As the world’s population increasingly migrates toward cities and as local and national budgets shrink, the need for new and improved urban infrastructure – roads, public transportation, electricity, water, and the like – grows more acute. These services and utilities not only provide the basics for modern life but also spur regional economic growth and prosperity, particularly within emerging markets.

Two major shortcomings create a “chronic shortage of funding” for needed infrastructure projects: First, governments often don’t require those who use infrastructure to pay for the related services, so money becomes an issue. Second, projects fall victim to faulty planning and preparation. International financial institutions (IFIs) – such as the European Bank for Reconstruction and Development (EBRD), the Asian Development Bank (ADB) and the International Finance Corporation (IFC) – seek to address these weaknesses in the ways they structure the contracts underlying the major development initiatives that they support.

The difference between “funding” and “financing” an infrastructure project is pivotal. Infrastructure funding refers to the...

About the Author

The World Economic Forum is an independent global organization that engages leaders of business, politics, academia and society to improve the state of the world.


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