Private Enterprise and Financial Markets > Infrastructure and Financial Markets > Infrastructure
Fostering Infrastructure Development in Latin America and the Caribbean
(08/96, GN-1884-1, En, Es)
This strategy (GN-1884-1) was formally considered by the Board of Executive Directors and the management of the IDB on August 30, 1995.
Support for infrastructure projects has been, and will continue to be, a main component of Bank lending activity. The changing economic and political environment of the past years, however, has raised new issues as governments have provided a larger role for the private sector in the provision of infrastructure services. Increasingly, market regulation, management of infrastructure services, and private sector financing are central concerns for policymakers and will require a new focus for Bank lending activities. The Bank is well-suited to provide workable solutions to the region's infrastructure needs that combine its traditional tools (direct lending, sector reform loans, and technical assistance) with new programs to lend directly to the private sector and provide guarantees.
This strategy proposal identifies several areas for action. First, the Bank should support the development of domestic financial markets in order to expand the availability of loanable funds of the type and term required for infrastructure projects. Safety and soundness issues will be the main focus with a concentration of legal and regulatory reforms in debt and equity markets, which are critical parts of the financing packages needed for infrastructure. Second, the Bank should examine a variety of new financing techniques that include local infrastructure funds, bond insurance, securitization, leasing, among others. These techniques can provide innovative, market-based financing solutions that leverage Bank resources and enhance the viability of financing packages. Additionally, the Bank should examine options such as political risk insurance and reinsurance. Third, the Bank should encourage market-based activities in infrastructure through hemispheric agreements such as a Multilateral Investment Treaty and/or Hemispheric Infrastructure Protocol. To support the dialogue on these topics, an Infrastructure Finance, Regulation and Management Studies Program will be executed to carry out and disseminate studies and research.
Last updated: 01/29/07
