Global Infrastructure Forum: Opening plenary
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The resources required to close the infrastructure gap are enormous. While this will require increasing investment, including from the private sector, bridging the infrastructure gap can only be achieved by improving governance, building capacity, and allocating and spending resources more efficiently. This opening plenary brings together for the first time the heads of the MDBs, as well as the representatives of the G20 and G-24 for a moderated discussion on the major issues facing infrastructure in the 21st century. This discussion will focus on some of the key steps these MDBs and development partners can take to leverage more public and private investment in infrastructure.
Moderator
Zeinab Badawi, International Broadcaster/Chair of the Royal African Society
Panelists
Ban Ki-moon, Secretary-General of the UN
Lou Jiwei, Minister of Finance, People’s Republic of China, and Chair of 2016 G20 FMCBG Meeting
Mauricio Cárdenas, Minister of Finance & Public Credit, Colombia, and Chair of G-24
Akinwumi Adesina, President, AfDB
Takehiko Nakao, President, ADB
Jin Liqun, President, AIIB
Sir Suma Chakrabarti, President, EBRD
Werner Hoyer, President, EIB
Luis Alberto Moreno, President, IADB
Ahmad Mohamed Ali Al Madani, President, IsDB
Kundapur V. Kamath, President, NDB
Jim Yong Kim, President, WBG
Philippe H. Le Houérou, EVP and CEO of IFC, WBG
Closing remarks
Wu Hongbo, Under-Secretary-General for UN DESA
Chulamanee Chartsuwan, Ambassador and Deputy Permanent Representative of the Permanent Mission of Thailand to the UN, on behalf of Chair of G-77
Zeinab Badawi
- first global forum on infrastructure, first time all the presidents of the MDBs have come together on one stage
- it’s about spending more and spending better
Jim Yong Kim, World Bank
- focus on infrastructure, execute large scale projects, tackling poverty inequality, etc
- SDGs, COP21, both requires huge amount of financing, how to turn billions into trillions
- Committed to supporting the infra agenda, low carbon development, etc, key to boosting twin goals
- AIIB and NDB new institutions, important regional perspectives
- Would like to hear ideas on how to leverage more public and private investment
- Questions about how funding for infrastructure is spent, inefficiency in use – can improve governance, etc
- Reduce transaction costs critical, setting new standards for transparency and disclosure
- GIF will be an annual event, will be reported to FfD next week
- Must raise our ambitions, commit to bold and concrete action
Ban Ki-moon, UN
- outcome of Addis Ababa action agenda, together with Paris Agreement and SDGs, for a healthier planet for future generations, leaving no one behind, can’t leave infrastructure gap
- crucial opportunity to take first step towards shared commitments
- alignment and coordination between established and new infra initiatives
- allow for greater range of voices to be heard, developing countries most vulnerable
- should also work towards all infra investment are socially environmentally and economically sustainable
- 2015 unprecedented collaboration, MDGs, WB and UN – will continue to strengthen this close collaboration
Lou Jiwei, G20
- China saying infrastructure needed to reduce poverty, if you want to reduce poverty build a road first
- Power grid now extended to all rural villages
- Help farmers living in inhospitable areas
- Have made great strides in poverty reduction, now universal access to internet in rural areas, people can buy products online, best delivery service online
- But aware of shortcomings, hope to address this
- China presidency of G20 this year, host of finance track of G20
- One of the agenda is infrastructure, G20 members have reached consensus that we need to encourage MDBs to invest more in infra, optimise their balance sheets, support infra investments
- Also asking MDBs to take joint actions to formulate quantitative ambitions for qualitative investments
- Mobilise resources from private sector, and enhance co-financing from MDBs
- G20 ork with all sort of development partners, established Global Infra Hub, emphasis on PPPs
- MDBs short of capital , need to work with local collaborators, eg Asia PPP resource centre
- MDBs undergoing reforms, setting up plan to encourage participation of private sector make up for MDB shortfall
- Sometimes about organisation, not money
- G20 countries have high expectations, will give strong support to MDBs to move forward in infra investments, also motivate MDBs and other dev partners as core agenda
- Outcomes of two tracks should complement and echo new resources and new vision and the SDGs
Mauricio Cárdenas, G24
- there are huge infrastructure gaps
- a number of countries are implementing ambitious infra programmes, eg Colombia, through PPPs
- development community is prioritising infrastructure, double dividend, long term productivity, aggregate demand
- more than access to finance also about governance, having the right institutions, way to enforce contracts with private sector
Akinwumi Adesina, AfDB
- Africa infrastructure deficit, 50bn gap
- Electricity access a big issue, need to light up and power Africa
- 20bn in next five years in the sector, hope to leverage this
- have to optimise how it gets used efficiently
- partial risk guarantees can help leverage a lot of money
- we do blended finance, the money in the capital markets exceeds what we can do together – Africa 50, PE platform, need to mobilise resources
Takehiko Nakao, ADB
- quantity matter, have large financing gap for infra
- unless we combine new technologies, cc, urbanisations, we can make our infra investments sustainable, greener and cleaner, good for the lives of the people
- must have partnerships, co-finance with AIIB
Jin Liqun, AIIB
- conceptualisation based on experience of China an other developing countries
- cooperation amongst the MDBs, towards shared standard, cooperation signed with WB, will do the same with other institutions
- need combined concerted effort, need to work together and mobilise private sector resources
Suma Chakrabarti, EBRD
- no way from billions to trillions without private capital, create conditions for more capital market transactions
- must also work on the policy, regulatory and capability side
- working with Kazakhstan on first ever PPP law, resulting in first PPP
Werner Hoyer, EIB
- instruments developed in EU is getting more and more useful
- we always do lending and blending, to make more out of the money
- projects must get better, advisory services is key
Luis Alberto Moreno, EBRD
- in the next 20 yrs all countries in Lat Am need to ramp up investments in infra
- bulk of emissions will be from this new infrastructure, so have a chance today to do something that also is good for the environment
- financing mechanisms are at the heart of this, eg blending, to pay for the difficult needs
Ahmad Mohamed Ali Al Madani, IDB
- infra financing important, issues bond, which has been approved 50bn
- cofinancing with public and private sector to attract them to invest in infra projects
- also good number of sovereign wealth funds
- investment guarantees, to encourage investors to invest in our member countries
- special IDB infrastructure funds, have opened a second
Kundapur V. Kamath, NDB
- focus on BRICS countries and on infrastructure, also on green
- global cooperation, started engaging with board of governors regarding increasing memberships – will have clarity next year on this
- stabilising operations and explore what we do
- would like to access local currency markets
Philippe H. Le Houérou, IFC
- fiscal space is reducing, we need private sector, as not to accumulate public debt
- one of the keys to leverage, we now have interest from commercial entities, insurance companies seeing infrastructure as an asset class – important standardise so you have scale
- FCAS, issue with bankable projects, not that easy, and the risk – if you have no guarantee from the government you are on your own
- Will invest more upstream to generate more bankable projects
- Financial side, working with IDA on derisking mechanism
Kim
- potential bankable projects are plenty, need tough reforms in terms of private participation, eg re energy access
- MDBs created as leveraging machines, to go out into capital markets to create loans for our clients
- On responding to refugee crisis, will leverage even more, even concessional financing blending, private sector
- SDGs, etc, need to have leveraging, not going to happen with grant based financing
- Need flexibility, concessional lending also to middle income countries
- Invest, and invest often in the MDBs
Adesina
- the African situation, eg the pension funds, sovereign wealth funds, PE – if we develop our own instruments to leverage that goes a long way
- from billions to trillions, leverage both public and private sector money
Al Madani
- in this environment of low interest rates, requires for us to get more money
- for those shareholders that have invested a lot, should find others ready to invest to do it
Chakrabarti
- need to up our performance on equity, need to get more out of equity – need more work on this
- project preparation facilities are important
Badawi
- infra investment can be lost through mismanagement, corruption, etc – how to address
Nakao
- shouldn’t waste our money, we have anti-corruption and integrity office
- capacity building, how we are doing things can be replicated in countries
Badawi
- impact on climate change etc
Adesina
- importance of good governance, have set up fund to support capacity, disclosure
- if the wrong guys get the contract you have wasted everything, transparency is important
- CEO Africa 50 ex IFC
- Problem is not capital, not enough good bankable projects
Hoyer
- will be forced on transparency, not just in the Panama papers case
- can discredit PPPs unless you talk about good well developed PPPs
- we have seen great projects wrongly calculated lead to increased state debt, must get the quality of the project
Badawi
- suspicion about the private sector, must be the right kind, as when we talk about essential services
Le Houérou
- not all infra is created equal
- to invest in telecom people know you need to pay, airport the same
- when you get to water it becomes more difficult, you have to convince people to pay to get clean water, progress in sanitation and health
- how to do it when the government has no money
- how to reconcile the whole, you have safeguards, you have to do a lot of due diligence – reputational risk is there
Kamath
- risk of contracts, can be damaging to projects and reputation
- need to see how we work with governments that adhering to contracts is ensured
Badawi
- taxation as resource mobilisation
Kamath
- out of our mandate, but how do you increase tax
Chakrabarti
- infrastructure is one of the fastest way to growth
- important for governance with long term policies, frameworks
- not a short term issue, but profits are available
Nakao
- PPPs are important, transaction advisory services
- But PPPs are not panacea, private sector needs assurance re income, they are risky – need combination projects
Liqun
- PPPs should not be a forced marriage between public and private sector, should understand each other well first
- Our banks can help support the integrated markets
Wu Hongbo, UN DESA
- infra core element of Addis agenda, achieving the SDGs
- create stronger incentives for long term investments, investment guidelines, PPPs to share risks
- must ensure the forum is inclusive, rotating the hosting among MDBs is encouraging
Chulamanee Chartsuwan, G77
- AA Action Plan and Agenda 2030 about infra, particularly for G77 – urge cooperation
- MDB must be dominant more than before in financing infrastructure, forum a light in the sea of darkness
- Call for capacity building programmes
- Establish a new infrastructure facility through FfD
