WASHINGTON, Oct. 10 (Xinhua): The World Bank launched on Thursday an initiative to meet the private sector's need in developing countries and emerging markets in the area of infrastructure construction.
"Today I will be launching a new partnership initiative, the Global Infrastructure Facility (GIF), which is aimed at mobilising the private sector to help tackle the massive infrastructure deficit now facing developing countries and emerging markets," World Bank President Jim Yong Kim said in his opening press briefing at the IMF-World Bank Annual Meetings 2014.
According to the data of the World Bank, developing countries and emerging markets need one trillion U.S. dollars a year in extra investment for infrastructure through 2020.
Institutional investors like insurance and pension funds have some 80 trillion in assets but less than 1 percent of pension funds are allocated directly to infrastructure projects and the bulk of that is in advanced countries.
"The real challenge is not a matter of money but a lack of bankable projects, a sufficient supply of commercially viable and sustainable infrastructure investments," said Kim.
The GIF will represent "a unique collaboration among the private sector, especially institutional investors, donor nations, multilateral development banks," said Kim.
According to a report on the WB website, developing countries now spend about US$1 trillion a year on infrastructure, but maintaining current growth rates and meeting future demands would require investment of at least an estimated additional US$1 trillion a year through to 2020.
Kim said the GIF was being designed to tap into expertise from within and outside of the Bank Group to deliver complex public-private infrastructure projects that no single institution could address on its own.
"The GIF is also being created to complement existing project preparation facilities in partner institutions across the globe. The multilateral development banks here represent that commitment to work together on behalf of our shared client countries, to bring together our resources, experience and our financing instruments." He said
Australian Treasurer and Chair of the G20 Finance Track Joe Hockey welcomed the launch of the GIF saying it complemented the work the G20 is doing to boost infrastructure investment.
