The World Bank Group’s commitment to financing infrastructure projects has increased by 45 percent which is $24.2 billion in the fiscal year 2014; from $16.7 billion in the previous year. The jump in financing was due to increased demand from developing countries.
The increase comes against a backdrop of an overall decline in private sector investment in infrastructure across the developing world. Such investments are considered critical in reducing poverty; commitments to Public-Private Partnerships (PPPs) and fully private projects declined by nearly 20 percent, from $181 billion in 2012, to $146 billion in 2013, according to World Bank Group estimates.
The increase in World Bank Group financing marks the highest level of infrastructure-related lending by the World Bank Group since 2011, with the bulk of investment focused on energy and transport projects.
However, with global demand for infrastructure estimated at $1-1.5 trillion annually above current investment levels, much larger commitments from the private sector are necessary to meet help low- and middle-income countries boost growth and reduce poverty.
“It is clear developing countries badly need more infrastructure, and we are stepping up with more financing to provide clean drinking water for families, electricity so children can study at night, and better roads so farmers can get goods to markets,” said World Bank Group President Jim Yong Kim.
Kim said the World Bank Group has created new global practices that are specifically designed to help transfer global development solutions from countries like Singapore to the rest of the world.