IFC Reaffirms Strategic Focus on Infrastructure, Establishes Infrastructure Advisory for South Asia
IFC, a member of the World Bank Group, together with multilateral and bilateral donors, has established an infrastructure advisory facility to help the South Asia region develop bankable infrastructure projects, largely through public-private partnerships. This reaffirms IFC’s strategic focus on infrastructure, one of the sectors where IFC is needed most.
The new facility will begin operations with an initial $20 million pool, of which IFC’s contribution is $5 million. It will work closely with government agencies at the national, state and municipal levels to help create model public-private partnerships in newer subsectors and increase access to infrastructure services across the South Asia region.
Dhanendra Kumar, World Bank Group Executive Director and India’s representative on IFC’s Board of Directors, said, “I am delighted that IFC has followed up on the 2007 conference in New Delhi on public private partnerships in infrastructure which identified a felt need for a shelf of bankable projects. The new infrastructure facility can generate such projects with the benefit of IFC’s experience in infrastructure, its ability to balance investor requirements with public policy considerations, and its reputation for transparency.”
Kumar explained that despite a multiplicity of public and private initiatives, compared to other emerging markets, South Asian countries including Bangladesh, Bhutan, India, Nepal, Maldives and Sri Lanka seem to be still falling behind other emerging markets in terms of investment in and delivery of infrastructure services, the lack of which disproportionately affects the poor and inhibits economic growth. This facility is an important step toward correcting this imbalance.
Farida Khambata, IFC Vice President for Asia, Latin America, Middle East and North Africa, said, “Infrastructure is a priority in the region, where the problem includes a shortage of bankable projects. Successful examples worldwide indicate that public-private partnerships are useful in opening up markets and for mobilizing public and private sources. We believe that IFC’s infrastructure facility will achieve similar outcomes.”
Bernard Sheahan, IFC Director for Infrastructure Advisory, added, “A significant part of our infrastructure strategy in South Asia is providing advisory services to help identify, design, and launch sustainable projects that leverage private sector expertise and capital to achieve public policy objectives. The new facility will help us do this.” He noted that this approach in South Asia follows IFC’s success to combine local delivery capacity with global expertise in other regions.
As part of its early outreach efforts in India, IFC signed a memorandum of understanding with the Infrastructure Corporation of Andhra Pradesh Ltd, a state government entity, to help develop infrastructure projects through public-private partnerships. In addition, the Indian government has empaneled IFC as transaction advisor for public private partnership transactions in India. IFC is advising the Bangladeshi government in structuring a deal for a 400-megawatt, gas-based power generation project. In Bhutan, Nepal, and elsewhere in South Asia, IFC is initiating discussions to identify areas where it can provide advisory services to support infrastructure development. The infrastructure facility for South Asia is led by Vipul Bhagat, who is based in New Delhi.
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