World Bank (WB) group on 9 October 2014 launched Global Infrastructure Facility (GIF) in partnership with private institutional investors. GIF was launched by World Bank President Jim Yong Kim.
The facility has been launched to ensure that billion of funds are channelized into the development of infrastructure in emerging countries like India and developing economies. Besides, the facility would also focus on climate friendly investments as well as ventures to bolster trade.
As per World Bank estimates, developing countries need 1 trillion US dollar a year in extra investments through 2020 and with public purses stretched.
As part of the GIF, the heads of some of the world’s largest asset management and private equity firms, pension and insurance funds, and commercial banks joined multilateral development institutions and donor nations to work as partners in a new Global Infrastructure Facility (GIF).
Some of the partners, as well as prospective partners, signing up to the GIF are BLACKROCK Alternative Investors, Caisse de Depot et Placement du Quebec (la Caisse), Citibank, N.A., HSBC Bank Plc., Islamic Development Bank, Japan Bank for International Cooperation, Macquarie Group, Ltd and Standard Chartered Bank.
Besides, the World Bank group also planned to work with the proposed Asian Infrastructure Investment Bank (AIIB), the New Development Bank (NDB) and Asian Development Bank (ADB) to boost investment in bankable infrastructure projects in the emerging and developing economies.
AIIB is proposed by China with a registered capital of around 100 billion US dollars. China also is keen that India participates in AIIB’s founding. The NDB (or BRICS Development Bank being set up by BRICS countries including India) also is aimed at helping emerging and developing countries effectively finance infrastructure and sustainable development projects.
Infrastructure needs of India
The Government of India under its 12th Five Year Plan (2012-17) projected that development of infrastructure in the Indian economy would require one trillion US dollar investment. However, the Deepak Parekh committee had trimmed the 12th Plan Period infrastructure investment projections by around 40% to 30.90 lakh crore rupees. The projections were reduced following waning interest to invest in these projects due to several problems in public-private partnership projects.
When: 9 October 2014