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I have make this report on role of world bank in infrastructure development . and I gather
the relevant information of this topic that how world bank play different different role in
infrastructure development in defferent areas like transport , water and sewerage , energy
,power etc and I show some data in this report how world bank play important role in
infrastructure development in developing countries
A BRIEF HISTORY OF THE WORLD BANK
It is difficult to cover in this introduction every event in the history of the World Bank
because from the outset its development followed international political and economic
events, of which where there were many. Moreover, the Bank’s history consists of a lot of
so-called “firsts”, such as the first time a loan was made to a country, the first time a report
was issued and so on, which are not terribly important for this report. Therefore, below is
only a few key events are outlined, which we thought were important to note.
The World Bank formally began operations on 26th June 1946. The initial authorized capital
of the bank was $12 million. The primary purpose of the Bank was to provide loans for
reconstruction and rebuilding of Western European countries after World War 2. Another
purpose of the Bank was to invest in the developing world. The lending for reconstruction
ended in 1967, and into the present the Bank remains the largest source of development
assistance. This assistance is intended primarily for projects that were unable to attract
private investment.
In 1947 the first ever loan was approved to Credit National of France for $250 million,
which was the largest loan in real terms made by the Bank i
In 1962 the first loan for education was given to Tunisia. In 1966 the International Centre for
the Settlement of Investment Disputes (ICSID) was established. It provides arbitration
services in investment disputes, which arise between foreign investors and host country
governments. It also provides advice to developing countries governments on the drafting of
foreign investment laws and regulations.
n its first fifty years. Among other things, the money were used to purchase railway
locomotives and to rebuild ports. This year the bank also entered the bond market for the
first time with an offering of $250 million, which was substantially oversubscribed and
bonds immediately started to sell at a premium over the public offering price. By 1959 the
Bank achieved the highest possible, triple bond rating, which has been rigorously maintained
ever since. This was an important achievement for the bank, because it gets most of its
funding from
private money markets. Moreover, the first overseas offices were set up in Paris, Hague and
Copenhagen, to oversee loan expenditure. During this time it was also agreed that the
interest rates paid by borrowing countries be the same for all courtiers, irrespective of their
individual credit rating.
I hardly need to tell engineers how important infrastructure is to the development agenda.
– In any country, the quality of the infrastructure is central to growth, poverty reduction, and
achievement of the Millennium Development Goals.
– After all, without schools and hospitals, countries can’t deliver education and health
services; without roads and ports and rail lines, farmers and manufacturers have no access to
markets; without electricity, businesses cannot operate in the country.
At present, however, many of our client countries are investing too little in infrastructure.
– The investment needed to keep up with projected growth in the developing world is
estimated to be equivalent to at least 5.5% of developing countries’ GDP annually—half for
new infrastructure and half to maintain existing assets.
– In developing countries, the public sector—which provides most of the infrastructure
investment in those countries—is spending an average of only 2%-4% of GDP on
infrastructure.
– Private sector investment reached over $100 billion per annum in 1997 and 1998, but has
now leveled off at $50-$60 per year.
– However, the fact remains that investment in infrastructure continues to be crucial to
development and remain woefully inadequate relative to needs.
In July 2003, the Board of Executive Directors of the World Bank Group approved a new
Infrastructure Action Plan, signaling a renewed emphasis on infrastructure development by the
institution. The Action Plan was developed in response to strong demand for increased
infrastructure investment by developing countries to further their growth and poverty reduction
agenda. Under it, the Bank Group will apply new and/or existing instruments more effectively,
including a spectrum of public-private partnerships, and project financing for infrastructure at
regional, national and sub-national levels.
On Friday, March 12, the Bank Information Center (BIC) will facilitate an information session
for interested civil society on the Infrastructure Action Plan. Staff from the World Bank’s
Infrastructure Vice Presidency and the Environmentally and Socially Sustainable Development
Vice Presidency have been invited to attend the discussion to address civil society questions and
concerns regarding the content of the Infrastructure Action Plan and how it will be implemented.
A draft agenda for the information session will be circulated prior to the event.
The Macroeconomics Program Office at World Wildlife Fund seeks to promote conservation
and sustainable development through a new approach to economic development: integrating
environmental sustainability and social equity into the formulation and applying development
strategies at national and international levels.
Draft Agenda
The agenda for the Information Session follows the “Matrix of Management Actions” outlined
in the Infrastructure Action Plan. Civil Society participants can ask questions related to each
section of the IAP and allow the Bank an opportunity to respond.
1. Countries’ Increased Demand for Infrastructure Development and the role of Civil Society
how will increased country demand for infrastructure development materialize in the
CAS/PRSP and through programmatic and adjustment lending? What is opportunity for
civil society participation in these processes and how will alternatives be considered?
2. New Role for Country Diagnostics
how will country diagnostic work, like ESW and the newly developed REDI, change to
reflect an increased emphasis on infrastructure development?
3. Role for MIGA and IDA in Infrastructure Development
what is envisaged regarding the role of risk mitigation? What role is planned for MIGA?
Is there an increased role planned for IDA?
4. Measuring the Results of Infrastructure Development
how will the Bank improve on reporting the results measurement of development
impacts of infrastructure?
5. Institutional Policy Changes
what is the “interpretation” of safeguard policies in network industries? How is
simplification of the safeguards and investment lending instruments integrated in new
infrastructure development?
6. Staff Incentives and Risk Mitigation
how is this changing in the Bank?
➢ ABOUT INFRASTRUC
Infrastructure is a key factor in responding to the current global economic downturn, and in
the drive to increase economic growth, reduce poverty, and achieve the Millennium
Development Goals (MDGs).
Developing countries need more infrastructures that is environmentally sound, socially
acceptable, and financially sustainable. The global financial and economic crisis is expected
to have a severe impact on infrastructure services in developing countries, as governments
face shrinking resources and private financing flows decline.
· The World Bank Group (WBG) launched the Infrastructure Recovery and Assets
(INFRA) platform in April 2009 to focus attention and resources of the WBG and its
development partners on the critical needs of infrastructure during the downturn, while
helping lay the groundwork for future growth and poverty reduction. INFRA scales up
infrastructure lending targets set out in the Sustainable Infrastructure Action Plan, approved
in early summer 2008 as the roadmap for action to effectively address the challenges of
globalization, social inclusion, and environmental sustainability.
· WBG financing for infrastructure-related programs and projects rose to US$20 billion
dollars during FY 2009, exceeding the US$15 billion committed under the INFRA platform.
The WBG supports infrastructure services across a wide array of sectors: energy, transport,
water supply and sanitation, urban management, water resources, environmental
infrastructure, information and communications technology, oil, gas, and mining. This
support is based on the fact that infrastructure development contributes directly and
indirectly to poverty reduction. For example:
Rural road rehabilitation in Ghana reduced costs for transporting goods and passengers by
about one-third on average.
More than 500,000 women die each year due to childbirth complications; most of these
deaths could be prevented through timely access to essential childbirth-related care, for
which road access is crucial.
The total demand for infrastructure investment and maintenance from developing countries
is estimated at more than US$900 billion per annum. Developing countries today invest, on
average, 3-4 percent of their GDP on infrastructure annually. They should spend an
estimated 7-9 percent of their GDP for both new investment and the maintenance of existing
infrastructure in order to sustain broader economic growth and poverty reduction efforts.
Union Finance Minister Pranab Mukherjee has mentioned that the 95% of the $4.3 billion
loan granted by World Bank will used for the development the infrastructure of India
an granted by World Bank will used for the development the infrastructure of India. The
World Bank has sanctioned $4.3 billion loans for India. At least 95% of the fund will be
used for developing infrastructure
The bank has also provided $150 million to Andhra Pradesh to improve its water supply and
sanitation services for 2,600 villages across six districts. The World Bank Infrastructure
Lending and the Poor The Bank has collected US$5.2 billion more than it extended in loans.
The World Bank has approved four projects worth $4.3 billion to India to bolster its
economic stimulus program and support the infrastructure sectors.
Of this $2 billion is Banking Sector Support Loan, which will provide budgetary support to
India, helping it maintain its broad economic stimulus program by enhancing the capital of
select public sector banks
Another loan of $1.2 billion to the India Infrastructure Finance Company Ltdis designed to
support its role to catalyze private financing for public-private partnerships in infrastructure
and stimulate the development of a long-term local currency debt financing market,
The World Bank also approved another $1 billion loan to the Power Grid Corporation of
India for the Fifth Power System Development Project. It is designed to help address India's
acute deficit of power, the bank said.
Lastly, the Bank approved $150 million for the Andhra Pradesh Rural Water Supply and
Sanitation Project, aimed at improving water supply and sanitation services in 2,600 villages
across six districts of the State.
The tidal wave and earthquake in Aceh and North Sumatra has killed at least 140,000
people, destroyed most of the infrastructure and made 500,000 people homeless. In the
recent Consultative Group on Indonesia (CGI) meeting- a consortium of donors and
creditors- reconstruction costs for Aceh and North Sumatra were estimated at $ 2 billion.
Indonesia received $ 1.7 billion from the CGI, in the form of a $ 1.2 billion grant and
concessional loans amounting to $ 500 million.
IBRD/IDA aims to support the achievement of the INFRA Platform objective through.
• Direct IBRD and/or IDA funding of infrastructure projects of up to $15 billion per year
• Diagnostic and advisory support to identify countries most at risk and projects most
Appropriate for INFRA support15
• Technical assistance to governments in the development of fiscal stimulus packages
• Providing parallel financing to ensure collaboration and complementarity among bilateral
And IFI financing for priority projects
• Providing concessional financing for project preparation
➢ INDIA SEEKS $3-BN WORLD BANK AID FOR WIDENING HIGHWAYS
India has approached the World Bank for $3 billion to fund widening of 7,000-km single-lane
national highways into double lanes, Road Transport and Highways. India has applied to the
World Bank for $3 billion ($2.97 billion) for building double lanes on 7,000 km of national
highways, which have single lanes. Funds are not a constraint for the highway projects till 2010-
11
To accelerate the pace of constructing highways across the country, National Highway Authority
of India (NHAI) has set a target of completing 20 km per day from March 2010 so as to build
7000 km per year.
India has started doing 7-8 km per day from 2-3 km a day earlier. The immediate goal is to scale
up the construction pace to achieve 20 km per day and keep doing it consistently. As a caveat to
meet the target of 20 km per day, he said the state governments would have to help NHAI in
land acquisition, shifting of utilities and building amenities along the highways.
Infrastructure: India’s rapidly growing economy has been placing huge demands on power
supply, roads, railways, ports and transportation systems. But, infrastructure bottlenecks
have been eroding the country’s competitiveness. Increases in power generation during the
Tenth Plan period fell short of target; when the economy was growing at a rapid 8% a year,
power supply grew at only 4%. And, although the national highway network doubled in size
between 1997 and 2007 – almost 35,000 kms were added during this period – soaring
demand has far outstripped supply. Urban infrastructure is a severe constraint to the
expansion of key centers of growth, while weaknesses in basic rural infrastructure—from
roads to electrification—have constrained the growth of the rural economy.
To help India continue to expand its critical infrastructure, the World Bank has, in
September 2009, agreed to extend $1.195 billion to the India Infrastructure Finance
Company Limited (IIFCL) to help finance private-public partnerships in infrastructure,
especially in the roads, power and ports sectors.
Power: In the past, World Bank support has helped India build its largest hydropower plant
at Nathan Jhakri in Himachal Pradesh. The Bank is now helping the country augment the
supply of hydropower. Support for the 412 MW run-of-the-river Rampur Hydropower plant
on the Sutlej river in Himachal Pradesh is ongoing. Two other hydropower projects are in
the pipeline; a 444 MW project on the Alakananda river in Chamoli district in Uttarakhand,
and the other at Luhri, further downstream from Rampur in Himachal Pradesh. The Bank is
also supporting the efficient transmission and distribution of power to consumers. It has
helped Power grid, the national power transmission agency,to emerge as a world class
agency. In September 2009, the World Bank extended a loan of $1 billion to Power grid to
strengthen and expand five transmission systems in the northern, western and southern
regions of the
country. At the state level, improvements in transmission and distribution are being
supported in Haryana and Maharashtra.
Transport: In the transport sector, the World Bank has supported Andhra Pradesh to
upgrade its state highways. It is now helping to upgrade rail and road connectivity in
Mumbai; improve state highways in Andhra Pradesh, Himachal Pradesh, Kerala, Orissa,
Punjab and Uttar Pradesh; construct a section of the Golden Quadrilateral in Uttar
Pradesh and Bihar; and upgrade rural roads in select districts of Himachal Pradesh,
Rajasthan, Jharkhand and Uttar Pradesh.
Urban Development: India’s frenetically growing cities and towns face major challenges
in creating adequate infrastructure including in the transportation, communications, solid
waste, water, and power sectors. The World Bank is helping streamline urban transport in
Mumbai and improve the delivery of urban civic services in Tamil Nadu and Karnataka.
It has recently supported a successful pilot to provide continuous, reliable water supply in
three urban areas in Karnataka. Nevertheless, if economic growth is not to be constrained, it
will be essential for India to make faster progress in urban development by investing in
public goods and services, including through the Jawaharlal Nehru National Urban Renewal
Mission (JNNURM).
➢ ROLE IN INDONESIA
The second biggest issue in Indonesia where the Bank plays an important role is the financing of
infrastructure. While it is true that Indonesia's infrastructure needs boosting, the Bank is
directing infrastructure development towards energy and transportation mega- projects that
would require huge capital.
The recent infrastructure summit reveals the plan of both the government and the creditors to
open investment, in other words, privatise power, water and sanitation, telecommunication and
roads. The Bank's role in Indonesia has been that of promoting investment and inclusion of big
companies rather than poverty eradication and ensuring equity.
The Paris Club press release that gave a huge role for the Bank and the Fund in the assessment
of reconstruction financing is therefore a major concern. One of the concerns is of course in
whose interest would the assessment be based on? What guarantee do we have that these
institutions will not put the mega-projects as the priority of infrastructure reconstruction in Aceh
and North Sumatra In the case of Indonesia, where the most urgent need is finance without
conditionality,
the Bank would be helpful if it supported the efforts of the Indonesian people to seek
comprehensive relief through the provision of grant financing.
The World Bank, for its part, has signed a Memorandum of Understanding with the Government
of Indonesia committing more than US$300 million, to help rebuild livelihoods and physical
infrastructure in Aceh and North Sumatra, and are also assisting the Government to assess the
cost of the damage – we will do all we can to provide support during this time.
➢ THE WB HAS DEVELOPED THE INFRASTRUCTURE RECOVERY AND ASSETS
(INFRA) PLATFORM
assist partner country governments respond to the negative effects of the global crisis on their
infrastructure services and investment programs; (b) provide them with customized policy
options to minimize the impact of the crisis, while limiting market distortions; and (c) provide
technical and financial support for continued private sector activity and for public investment
projects in infrastructure.
The WBG responded to demands from clients by scaling up assistance for infrastructure under
the Infrastructure Action Plan (IAP) of 2003. Achievements under the three-year plan (FY04-
FY07) include the following:
· Bank lending for infrastructure grew by 88 percent during the period, reaching
US$10.3 billion in FY07. Assistance for infrastructure in Africa almost doubled, rising
from US$1.4 billion to more than US$2.5 billion during the same period.
· The Bank and IFC combined their resources to expand assistance to sub-national
governments without requiring sovereign guarantees.
· The quality of the infrastructure portfolio has remained sound, including compliance
with safeguards.
RESEARCH METHODOLOGY
The research methodology is the process through which we make research again on the
particular topic that gives us the different result. Now at present as I have topic of role of world
bank in infrastructure development
OBJECTIVE OF STUDY
1. Gather more and more information as much possible.
2. To study the role of world bank in infrastructure development
AREA OF STUDY
The area of study is developing countries, because under this I have shown shon all the role of
world bank under different sectors .
DATA COLLECTION METHOD
As we know that it is not possible to collect the data primarily and on these types of issues only
the secondary data can be collected, so I have collected the secondary data through internet.
USE OF RESEARCH
1. It makes a flash on the role of World Bank in infrastructure development
2. This report would help to expose the role of the World Bank in infrastructure development
➢ Origin of foreign investment commitments in the infrastructure industries of Africa, Asia
and Oceania and Latin America and the Caribbean 1996-2006
As you may know, in the later 1990s the Bank’s investment in infrastructure declined from
about 40% of our annual commitment to 21% in 1999.
– Concerned by this trend, we developed an Infrastructure Action Plan three years ago.
–
– Since FY03 the Bank’s lending for infrastructure has increased by about $1 billion each
year.
–
– Subject to client demand and IDA availability we expect our infrastructure business to reach
about $10 billion per year, or about 40% of our annual lending.
($ millions)
MAJOR SECTOR FY02 FY 03 FY 04 FY05
Energy and Mining 2,128 1,206 1,042 1,874
ICT 156 115 97 191
Transportation 2,392 2,731 3,819 3,138
Water and Sanitation 503 1,295 1,493 1,781
Other (Flood Protection) 54 93 138 426
TOTAL 5,232 5,440 6,589 7,411
REGION
AFR 1,254 1,363 1,560 1,317
EAP 905 1,460 1,735 1,467
ECA 434 367 864 1,584
LCR 978 689 833 1,303
MNA 225 291 731 300
TOTAL 5,232 5,440 6,589 7,411
PRODUCT LINE
IBRD 2,502 3,148 3,595 4,359
IDA 2,563 2,161 2,832 2,559
GEF 34 53 90 67
Guarantees 115 75 59 410
Special Financing 19 2 12 16
TOTAL 5,232 5,440 6,589 7,411
MAJOR THEME
Urban Development 1,492 1,594 1,369 1,872
This data on the investment in transport sector like airport railways roads and seaports
This data sinc 1990 to 2008 in this we can see most of the investment in the roads and than
railways 91and 92 totally investment in roads and then it increase till 1997 in all the sector
but not in airport sector than decline in all the sectors till 2004 and then it increase from
2005 to 2006 than it decline in 07to08 but increase in roads in 07to 08
This data on developing country middle income and upper middle income and other lower
income countries world bank with the private participation start the water project most of the
project are in the china and upper middle income countries and then other lower middle income
countries
I did the research on the topic of the role of the World Bank in infrastructure development and I
note down the some finding these are the finding given blew
CONCLUSION
The conclusion of this term paper is that world bank play important role in infrastructure
development .it plays most important role in transportation and energy sectors it plays important
role in all the developing countries likeindia chine brazil like it provide the loan to all the
countries which countries where need of finance it play impotent role in different sectors like
transportation energy and water and sewerage and others
BIBLIOGRAPHY
WWW.WORLDBANK.ORG.COM
WWW.WEKIPEDIA.COM
WWW.ASK.COM
WWW.MONEYCONTROL.COM