The World Bank
Strategy
Closing the infrastructure gap is a key element of the World Bank’s strategy in SSA and a central pillar of the Bank’s Africa Action Plan. The World Bank has substantially scaled-up its financing for SSA infrastructure from $600 million in the year 2000 to approximately $1.7 billion in new commitments in 2006 and a projected scale up to $2.4 billion in new lending by fiscal year 2008 (the end of the IDA-14 period).
At the same time, IFC and MIGA are committed to doubling their support to SSA infrastructure during the IDA-14 period. Due to the lags created by the project cycle, disbursements rise at a slower pace than commitments, but are projected to reach US$1 billion by 2007. This increase in the volume of lending has also been accompanied by improvements across a range of portfolio quality indicators as well as ex post project evaluations of outcomes.
Focus
The World Bank’s new approach places increasing emphasis on regional integration projects. Many of the infrastructure development goals of SSA require coordinated multi-country action at the regional level. Given the relatively small size of many SSA economies, as well as the geographical isolation of land-locked countries, only regional initiatives can create economic spaces large enough to reap scale economies in infrastructure development and create adequate markets for products. In recognition of this reality, the World Bank has established a new Department of Regional Integration, and a target has been set to dedicate 10% of IDA resources to regional projects. In fiscal year 2006, over $400 million of regional infrastructure projects in power, water resources management, and trade and transport facilitation were delivered to the Board, with an FY07-08 pipeline of over $1.5 billion. Priority areas include integration of power and transport networks, as well as coordinated river basin management.
There are also clear strategic directions on each of the infrastructure sectors.
Energy. The bulk of IDA lending will continue to be on the power sector. The three main lines of activity are on sector reform projects to improve performance of electric utilities, regional integration projects to connect transmission networks and support the development of trading systems, and service expansion projects to promote access in rural and peri-urban areas. Furthermore, given that biomass continues to meet most of the region’s energy supply needs, there will also be projects aimed at reversing deteriorating security of supply for these more traditional fuels.
Transport. The central focus is on rehabilitation of road networks in the context of institutional reform programs that establish independent financing and management mechanisms. About 20% of investments go on rural roads. IDA is also playing a growing role in facilitating private sector participation in rail, port and airport concessions based on public-private co-financing of investments, as well as supporting trade facilitation projects that combine investments in multi-modal transport hardware with institutional and administrative reforms.
Urban Development. The program supports strengthening of the institutional and financial capacity of municipal governments to meet the new challenges posed by growing decentralization. Thereafter, investments resources are provided to ensure that service delivery systems keep pace with the demands posed by unprecedented urban growth rates of 4-6% per year. These include slum upgrading, and urban waste management, as well as water supply and sanitation.
Water Supply and Sanitation. The main priority is on service expansion to meet the MDGs, concentrating on 19 focus countries that have the greatest potential for reaching the target with some additional financial support. The associated institutional model varies according to context, ranging from community management in rural areas to autonomous water boards in towns, and a combination of mainstream utilities and peri-urban small scale providers for urban centers.
Water Resources. The emphasis is on supporting coordinated development of international river basins, with a combination of institutional strengthening and direct investment in major hydraulic infrastructure. The successful Nile Basin Initiative provides a model that is now being replicated in Niger, Senegal, and SADC. Similar initiatives are also being supported at the national level in Kenya and Zambia.
Finally, the World Bank – in collaboration with other donors – is undertaking a major Regional Flagship Report on SSA Infrastructure as the focal point for a major analytical program of work including thematic studies on all major topics of strategic importance. This will be combined with a massive data collection exercise to set the baseline against which the renewed efforts to address the infrastructure challenge can eventually be assessed.