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Guarantees light the way for clean energy through renewable auctions

Arnaud Braud's picture

Photo: Scaling Solar project in Zambia

What is a common thread between Argentina, Maldives, and Zambia? In each of these countries, the World Bank provided guarantees to support transparent auctions for renewable energy. Through these, I have seen how the Bank’s involvement helped increase private investors’ confidence, attract world-class developers, and ultimately reduce tariffs.

Drawing on 10 years of diverse experience in the power sector in both public and private organizations, my role is to help bridge the divide between public and private parties and help each side better understand the other. The World Bank is ideally positioned for this. Both sides understand the World Bank carries out a detailed due diligence and ensures the auction meets international standards. Both sides appreciate the World Bank will be an honest broker if issues arise. Because of its long term and continuous involvement in our client countries, the World Bank can help identify and solve issues early on. As such, no World Bank project-based guarantee has ever been called.

Transforming Transportation 2018: To Craft a Digital Future for All, We Need Transport for All

Jose Luis Irigoyen's picture

Exponential progress in how we collect, process and use data is fundamentally changing our societies and economies. But the new digital economy depends fundamentally on a very physical enabler. Amazon and Alibaba would not exist without efficient ways to deliver products worldwide, be it by road or ship or drone. The job you applied for through Skype may require travel to London or Dubai, where you’ll expect to get around easily.

In fact, as the backbone of globalization, digitization is increasing the need to move people and goods around the planet. Mounting pressure on transportation as economies grow is leading to unsustainable environmental and safety trends. Transport needs are increasingly being met at the cost of future generations.

Can the digital revolution, which depends so much on efficient global and local mobility, also help us rethink transportation itself? To be a part of the solution to issues such as climate change, poverty, health, public safety, and the empowerment of women, the answer must be yes. Transport must go beyond being an enabler of the digital economy to itself harnessing the power of technology.

A critical piece of the infrastructure puzzle: good governance

Chris Heathcote's picture

A major factor hindering infrastructure implementation and delivery is the absence of good governance, according to the 130 delegates from 27 countries who came together for the first Regional Roundtable on Infrastructure Governance in Cape Town in November.
There’s no denying infrastructure is crucial to Africa’s growth prospects. Nor can one ignore the ever-growing need for infrastructure on the continent—in Sub-Saharan Africa, only 35% of the population has access to electricity, and 23% still lack access to safe water and sanitation. Despite an estimated shortfall of nearly $100 billion in infrastructure investment in Africa, lack of financing is not the biggest problem.
The landmark Roundtable brought together representatives from African governments, the global private sector, multilateral and international organizations, civil society organizations and other development partners, for a discussion on the challenges and practical solutions to the governance impeding successful infrastructure delivery in Africa.

Why 2018 global growth will be strong, and why there is still cause for concern, in 10 charts

Carlos Arteta's picture
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Download the January 2018 Global Economic Prospects report.

Global growth accelerated to 3 percent in 2017, supported by a broad-based cyclical recovery encompassing more than half of the world’s economies, and is expected to edge up to 3.1 percent in 2018. Global trade regained significant momentum, supported by an upturn in investment.

As headwinds ease for commodity exporters, growth across emerging and developing economies is expected to pick up. However, risks to the outlook remain titled to the downside, such as the possibility of disorderly financial market adjustment or rising geopolitical tensions.

A major concern in the subdued pace of potential growth across emerging market and developing economies, which is expected to further decline in the next decade. Structural reforms will be essential to stem this decline, and counter the negative effects of any future crisis that could materialize.

The broad-based recovery should continue

Global growth accelerated markedly in 2017, supported by a broad-based recovery across advanced economies and emerging market and developing economies (EMDEs), and it is expected to edge up in 2018.

Energy and raw materials prices gained in December, beverages and fertilizer prices fell – Pink Sheet

John Baffes's picture
Energy commodity prices gained 2 percent in December—the sixth consecutive monthly gain—led by a 6 percent increase in coal prices, the World Bank’s Pink Sheet reported.

Agriculture prices declined marginally, as a 5 percent decline in beverages, led by cocoa (down 10 percent) outweighed a 2 percent increase in raw materials prices, led by cotton (up 6 percent) and natural rubber (up 5 percent). Fertilizer prices declined 5 percent, led by a 11 percent drop in urea.

Metals and mineral prices gained less than 1 percent. A large gain in iron ore (up 12 percent) was offset by declines in zinc and nickel. Precious metals prices declined 2 percent, led by a 1 percent decline in gold.

The pink sheet is a monthly report that monitors commodity price movements.
Energy and raw material price indexes increased in December while beverage and fertilizer prices declined sharply.


The New ASEAN Green Bonds Standards

Ashraf Arshad's picture
The ASEAN Green Bonds Standards are a big step forward towards more green investments in the region. Photo: bigstock/jamesteoh

Climate change poses a significant threat to the economic development of countries around the world. The World Bank estimates that up to a 100 million poor people could be pushed back into poverty by 2030 as a result of climate changein part due to a combination of higher agricultural prices and threats to food security and health – especially in the poorer parts of the world. The Paris Agreement and the 2030 Sustainable Development Goals (SDGs) have provided commitments to tackle the most urgent of these environmental challenges.

Building benchmarks for infrastructure investors: a long but worthwhile journey

Sarah Tame's picture

Photo: User 377053 | Pixabay

The Argentinian presidency of the G20 opens this month and will be marked by a focus on infrastructure investment. The G20 and Organisation for Economic Co-operation and Development (OECD) have already announced a widescale data collection initiative to create benchmarks to monitor the risk-adjusted financial performance of private infrastructure debt and equity investments.

It’s about time.

Investors have hit a roadblock when investing in infrastructure. Until now, none of the metrics needed by investors were documented in a robust manner, if at all, for privately held infrastructure equity or debt. This has left investors frustrated and wary. In a 2016 survey of major asset owners by the EDHEC Infrastructure Institute (EDHECinfra) and the Global Infrastructure Hub, more than half declared they did not trust the valuations reported by infrastructure asset managers. How, under such conditions, can the vast increases in long-term investment in infrastructure by institutional players envisaged by the G20 take place?

Africa is paving the way to a climate-resilient future

Tara Shirvani's picture

Since the presentation of the World Bank’s first Africa Climate Business Plan at the COP 21 in Paris in 2015 and the Transport Chapter in Marrakech in 2016, a lot of progress has been made on integrating climate adaptation and mitigation into our transport projects.

The World Bank initially committed about $3.2 billion toward mainstreaming climate action into transport programs in Sub-Saharan Africa in the form of infrastructure investments and technical assistance. Following the Paris Agreement, and building on African countries’ Nationally Determined Contributions (NDCs), the size of this portfolio grew to $5 billion for 2016 to 2020.  In 2017, the institution added another $1.9 billion to that amount, bringing the total to $6.9 billion in projects with climate co-benefits— more than twice the size of the original portfolio. These investments will help improve the resilience of transport infrastructure to climate change and improve the carbon footprint of transport systems.
Climate change has already started to affect African countries’ efforts to provide better transport services to their citizens.  African transport systems are vulnerable to multiple types of climate impact: sea level rise and storm surge, higher frequency and intensity of extreme wind and storm events, increased precipitation intensity, extreme heat and fire hazard, overall warming, and change in average precipitation patterns. The increased frequency and intensity of extreme climate event challenges the year-round availability of critical transport services: roads are damaged more often or are more costly to maintain; expensive infrastructure assets such as ports, railways or airports can be damaged by storms and storm surges, resulting in a short  life cycle and capacity than they were originally designed for. Critical infrastructure such as bridges continue to be built based on data and disaster risk patterns from decades ago, ignoring the current trend of increased climate risk. For Sub-Saharan Africa alone, it is estimated that climate change will threaten to increase road maintenance costs by 270% if no action is taken.

Powering up Africa through innovation

Simon Bell's picture
Recent World Bank investment climate surveys find that the top two constraints for small and medium enterprises (SMEs) in Africa are access to finance and access to energy. Given that SMEs contribute disproportionately to boosting job creation, GDP, and exports, addressing these two constraints is critical to promoting economic development on the continent.
A new project combining skills across the World Bank Group and IFC is taking advantage of disruptive advances in the energy and finance sectors to address these longstanding challenges for SMEs.
Current access to electricity remains woefully low and is a major impediment to economic growth. More than half of Africa’s population isn’t connected to the energy grid and has no access to reliable power. At the same time, fewer than 50% of adults have an account with a formal financial institution.
In recent years, however, two important developments have made it possible to begin addressing these challenges:
  1. Off-grid energy solutions—notably solar power—have fallen dramatically in price with new business models working to scale them
  2. New digital-based financing mechanisms, such as crowdfunding, cryptocurrencies, peer-to-peer lending, psychometric testing, big data, and blockchain have emerged as tools for under-served finance markets.

There are strong parallels in these advances for both sectors. Whereas both energy and finance are traditionally provided by large-scale, centralized service providers—state-owned electricity utilities and large commercial banks, respectively—new solutions have effectively decentralized and democratized the provision of these services. Now a range of smaller, innovative companies can provide these services and consumers can go “off-the-grid” for both their energy and financial needs.

Anne Mwaniki, CEO of Solimpexs Africa, a Kenyan company producing solar-powered heating systems.
Photo © infoDev / World Bank

Farewell 2017; Hello to More and Better Infrastructure in 2018

Jordan Z. Schwartz's picture

Photo: auphoto /

As Washington, D.C.’s infrastructure braces for its first winter freeze and 2017 draws to a close, this feels like the right moment for a recap on what the year has brought us in terms of closing the infrastructure gap across emerging markets and developing economies; policy directions within and outside of the World Bank Group; new instruments, tools, and resources; and—the proof in the pudding—actual investment levels.

There may not be one blog that can capture all of those themes in detail, but here is a brief overview of what 2017 has meant and what is on the docket for 2018 and beyond.