A webinar series presented by the GI Hub and International Finance Corporation

How will we fund the infrastructure of the future?

This is the central question the GI Hub and International Finance Corporation (IFC) aimed to help answer in New Deals: Funding solutions for the future of infrastructure. This webinar series featured global project teams sharing practical solutions and funding innovations they used to create bankable projects while attracting private investment, de-risking the investment, optimising asset value, and achieving sustainable development goals.

Each session highlighted project characteristics that enabled successful completion. The discussions also encompassed factors in the enabling environment – such as policy and regulatory factors – that contributed to success or had to be overcome. All sessions were recorded and are available to watch below.

In both developed and emerging economies, regional and local governments may struggle to provide residents with reliable and affordable access to essential infrastructure. Addressing such subnational disparities and improving the social inclusivity of infrastructure is key to achieving a long-term and sustainable recovery from the COVID-19 crisis.

In February 2022, G20 Finance Ministers and Central Bank Governors agreed on the importance of developing “policies to mobilise inclusive infrastructure investment to enhance social inclusion and address subnational disparities in regions and cities.”

To support this objective, the GI Hub and IFC presented this webinar in collaboration with the G20 Indonesian Presidency.

This session highlighted solutions for governments and project proponents to mobilise private financing and inclusive infrastructure investment in order to reach vulnerable groups and underserved regions. Panellists discussed:

• Approaches to unlock subnational and inclusive infrastructure investment while achieving sustainable development goals
• Ways to open new markets, address regional disparities, and promote sub-national infrastructure investment by leveraging international organisations
• Which funding and financing mechanisms can be used to enhance regional connectivity in underserved regions and promote inclusivity in infrastructure
• How the involvement of the private sector can help achieve the public sector’s broader sustainability objectives.

Project examples

The City of Ekurhuleni (COE) in South Africa is committed to being carbon-neutral by 2050, and – with support from IFC – is improving the efficiency of various municipal services through the integration of environmentally sustainable solutions. The engagement with IFC aims at improving the efficiency of energy and water services and conceptualising projects that can attract private sector finance. Specifically, IFC is providing customised advisory services to support the city in addressing non-revenue water and commercial energy losses, sourcing power from Independent Power Producers (IPPs), and integrating climate-friendly and green solutions into the city’s planning. Moreover, IFC has participated in the city’s local currency bond issuances: ZAR650 million in a 15-year amortising bond in 2017 and ZAR900 million in a 12-year amortising bond in 2020 during the height of the COVID-19 pandemic. The proceeds of the bonds were used to fund the city’s capital expenditure plans.

EdgePoint Infrastructure is a tower platform with operations in Indonesia and Malaysia. IFC recently announced an additional USD8.3 million indirect equity investment in EdgePoint to support the company's entry into the growing Philippines tower market. By enabling new market entrants and cost-effective connectivity, the investment will increase mobile network capacity and enable a competitive market for tower colocations in the country. IFC's investment in EdgePoint is part of a larger investment in digital infrastructure assets across emerging markets managed by affiliates of DigitalBridge Group, Inc., a leading global digital infrastructure investment firm. IFC's investment involves the acquisition of more than 2,900 towers from the Philippines Long Distance Telecoms Company through a sale-leaseback transaction and the construction of additional new build-to-suit towers. 

This session examined how innovative forms of commercial financing are being mobilised to finance sustainable infrastructure. Topics included:

• What innovations are helping incentivise investment in sustainable projects?
• How are transactions being structured to achieve sustainability outcomes?
• What de-risking efforts need to be considered in sustainable infrastructure transactions?
• What are the trends and outlook for green and sustainable financing?

Project examples

Clean Ganga, India. India’s holy river Ganga is a water source for more than 400 million people, more than 40% of India’s population, and supports the agriculture, fisheries, transportation, tourism, and manufacturing industries along the river basin. However, large amounts of untreated waste and sewage from factories and cities flow into the river. Since the 1970s, governments and urban local bodies had invested billions of dollars into sewage management and wastewater treatment with little improvement in the water quality of the Ganges. There was little private sector interest in the development of wastewater plants due to high risk and lack of bankability.

In 2014, the Government of India launched the Namami Ganga (Clean Ganga) Program and involved IFC as lead transaction advisor in developing public private partnership projects including structuring India’s first hybrid-annuity PPP model for sewage treatment. Based primarily on the initial support provided by the World Bank Group and the contractual structure and documents developed by IFC, the NMCG is in the process of replicating the success of this model in around 30 cities along the Ganga, attracting close to USD400 million in private capital.

Learn more about Clean Ganga from the World Bank and IFC.

View the case study of the Clean Ganga project, including the deal structure.

Tibar Bay Port, Timor-Leste. In the early 2010s, the Government of Timor-Leste began looking at developing its transport infrastructure, which had limited economic development and capacity. Port facilities in the capital Dili were heavily congested, creating an economic bottleneck that affected trade, reduced exports, and increased the prices of goods.  The government found it difficult to attract international investors to finance and build infrastructure due to a recent history of civil unrest and conflict.

In 2016 after a competitive tender process, the Timor-Leste government with transaction support from the IFC, formed a partnership with the Bolloré group for the construction of a state-of-the-art port facility in Tibar Bay, near Dili. This was the nation’s first public-private partnership (PPP) with the Bolloré Group contributing USD $360m over the project lifecycle, private financing that was five times larger than any previous investment outside the oil and gas sector. The project – at the time the largest undertaken by IFC in the Pacific – was expected to create more than 1,000 jobs, including employing 500 people during the construction phase, helping to support economic activity and improved prosperity for the people of Timor-Leste.

Learn more about Tibar Bay Port from the World Bank and IFC.

View the case study of the Tibar Bay Port project, including the deal structure.

Meet the moderators and panellists

Blended/concessional finance is an important tool to mobilise private capital for sustainable infrastructure development. As awareness of the potential of blended finance has increased in the past 5 to 10 years, so have innovations around its use and new concessional resources.

IFC has found that “blended finance can support high-impact transformative projects in sectors that are initially unable to attract commercial finance but have the potential to become commercially viable over time” and further notes that although no one financing instrument is a ‘silver bullet’ solution, “blended finance has the potential to be a catalytic part of many solutions”.

This webinar explored how governments and project proponents can mobilise innovative forms of commercial financing like blended finance and sustainability-linked loans.

Topics included:

• What innovations in commercial financing are making it easier to invest?
• What government policies help enable blended finance transactions?
• How can the involvement of the private sector help achieve the public sector’s broader sustainability objectives?
• What are the requirements for raising concessional finance?
• What are the opportunities for green infrastructure?

Project examples

Our panel explored the topics outlined above, and illustrate these with lessons learned on two projects:

• World Bank Group's Scaling Mini-Grid (SMG) Program: Mini-grids are a cost-effective way to provide low-cost, reliable, and clean power to communities in sub-Saharan Africa that are out of reach of existing power grids. New attention from international institutions like IFC is expected to help expand private investment in mini-grids and help provide access to the 573 million people in the region who lack access to electricity.
• Daystar Nigeria: Daystar Power provides hybrid solar power solutions to businesses in West Africa. By expanding its installed solar capacity to 140MW by 2024, it will serve more Nigerian businesses in the financial services, manufacturing, and agricultural sectors with clean and affordable power. Enabling this expansion, IFC in June 2021 committed a seven-year US$20 million junior debt package to Daystar Nigeria, comprising a local currency subordinated loan of up to USD10 million equivalent hedged through cross-currency swaps with IDA Private Sector Window Local Currency Financing, and up to USD10 million concessional subordinated loan from the Canada-IFC Renewable Energy Program for Africa.

Learn more about the projects

• IFC’s Work in the Energy Sector
• Scaling Solar
• IFC| Infrastructure
• World Bank Group's Scaling Mini-Grid (SMG) Program
• IFC Launches Work on Scaling Mini-Grid Program to Increase Clean Electricity Access in the DRC
• Daystar Power Nigeria

Meet the moderators and panellists

Realise the significant value inherent in brownfield infrastructure assets through the learnings in this session. The discussion uncovered program structures and solutions that better enable asset upgrades, increase sustainability, and improve community outcomes while deriving revenue.

Topics included:

• Methods of developing work packages into programs that deliver economies of scale and attract private sector participation
• Unique and effective brownfield asset procurement structures
• The importance of transparency in a successful brownfield asset procurement process, and mechanisms for improving transparency
• Perspectives on the ‘ingredients’ of bankability in a brownfield program or project
• Solutions for streamlining the procurement process for optimal value.

Project examples

Our panel explored the topics outlined above, and illustrated these with lessons learned on two projects: 

• PiPa Road Program (Sao Paulo, Brazil). Sao Paulo State’s Transportation Regulatory Agency (ARTESP) structured and tendered a 30-year concession contract to modernise, expand, and operate the Piracicaba-Panorama (PiPa), the largest road network ever tendered in Brazil. The PiPa covers 1,273 km of toll roads and passes through 62 municipalities. The program focused on improving safety outcomes to address the significant problem of road deaths in Brazil and sought to attract international financing. Key solutions that helped achieve these goals were a reform of the concession contract and procurement processes that improved transparency for bidders and facilitated appropriate risk allocation.
• Ukraine Cities Program (Mariupol, Ukraine). In Ukraine, 70% of the population lives in cities, which face a significant need for infrastructure investment. Mariupol, Ukraine’s tenth-largest city, has experienced damage to its infrastructure and an influx of more than 100,000 refugees as a result of regional conflict that began in 2014. A loan under IFC’s Cities Initiative is helping the city improve existing public transportation infrastructure, doubling passenger capacity and improving accessibility for people with limited incomes while rehabilitating a bus depot and bus workshop, and enhancing the city’s traffic planning and management system.

Learn more about the projects

• Press release about the PiPa program
• Blog about the PiPa program (in Portuguese)
• Story about the use of iRAP methodology for safety on the PiPa program
• Story about the authorisation of Consórcio Infraestrutura Brasil to operate the PiPa (in Portuguese)
• Press release about IFC’s work with Mariupol
• Story about IFC’s work with Mariupol
• Story about the IFC’s Ukraine Cities Program

Meet the moderators and panellists

Moderator: Edgar R Saravia, Acting Director, Transaction Advisory Department at IFC 

Edgar has 30 years of experience in infrastructure development and financing in emerging economies. He previously worked across global portfolio and risk management of PPPs at CTA and managed IFC’s PPP transaction advisory business in East Asia Pacific, completing PPPs in power, transport, and tourism. He also worked on institutional regulatory and privatisation reforms at the World Bank and in Bolivia as Undersecretary of the Treasury and Secretary of Capitalization.  

Moderator: Cinthya Pastor, Director of Economics, GI Hub 

Cinthya leads the GI Hub’s economic research and policy recommendations for the global infrastructure landscape. Prior to joining the GI Hub, she was with the Inter-American Development Bank, leading research on infrastructure for Latin America and the Caribbean. She also ran INFRALATAM, the first and only database that estimates public investment in infrastructure for 22 LAC countries. Previously she was Public Policy Chief at the Peruvian Institute of Economics and worked at the Ministry of Economy and Finance of Peru. 

Overview of the session

Greenfield infrastructure project deal volumes have lagged total infrastructure investment over the past decade. Although deals on the secondary market have increased steadily, it is harder for investors to find bankable greenfield investments.

Learn more about the projects

• REWA Solar Project case study and deal structure
• Tina River Hydropower Project case study and deal structure
• REWA Solar Project overview
• Tina River Hydropower Project overview

Panellists offered insights on:

• De-risking approaches that keep pace with the evolving and competitive investment landscape
• The inter-relationships between risk management and environmental, social, and governance (ESG) considerations
• Financing innovations for de-risking greenfield investment
• Enabling factors, including policy and regulatory environment factors
• Project synergies and community benefits.

Moderators

Maud de Vautibault, Director of Practical Tools and Knowledge, GI Hub

Maud de Vautibault is a senior infrastructure policy and legal advisor with over 18 years of experience in the public and private sectors. She joined the GI Hub in January 2019 under a cooperation agreement with the French Treasury where she was a Project Manager and Head of Legal Affairs at the Infrastructure Finance and PPPs Unit. During her time in the Ministry of Finance, one of her roles was advising public procurement authorities on contractual options involving concession, traditional public procurement and PPP contractual structures.

Isabel Chatterton, Director and Regional Head of Industry, IFC

Isabel is the Regional Industry Director, Infrastructure and Natural Resources, Asia and Pacific, based in Singapore. For seven years prior to her current role, Isabel was the Regional Manager for PPP Transaction Advisory Services. Isabel previously spent four years in IFC’s Subnational Finance unit where she worked in deal origination, structuring and supervision of debt, and structured finance products in more than six countries in LAC. Before joining IFC, Isabel held various positions in World Bank operations in the urban sector in the Middle East and North Africa region; the water sector in Latin America; and the transport, power, and urban sectors in South Asia. Before joining the World Bank in 2001, Isabel worked in emerging markets and Western Europe for WS Atkins in the UK as Senior Management Consultant. Isabel, a civil engineer by training, holds an MBA and a PhD from the University of Birmingham (UK).

Panellists

Fred Conning Tauvata, Deputy Project Manager, Tina River Hydropower Project

With a background in engineering, Fred has been involved in the development of the energy industry in the Solomon Islands for more than 20 years. Before joining the Tina River Hydropower Project, Fred developed small renewable energy systems for rural communities in the Solomon Islands. Fred has been engaged on the Tina River project since 2010, driving the project since its inception. Fred’s dream is to make the project a model of development for the Solomon Islands and to encourage more infrastructure development.

Nick Merritt, Partner, Norton Rose Fulbright, advisor on Tina River Hydropower Project

Nick Merritt is a finance partner at Norton Rose Fulbright’s Singapore office.  Based in Asia for over 20 years, Nick has advised developers, multilaterals and other financiers on a range of energy and infrastructure across the region. More recently, Nick’s focus has been on the energy transition and sustainable finance.  He also supports companies in developing their sustainability strategies and in the development of sustainable finance products that will support those strategies. 

Manu Srivastava, Principal Secretary, Government of Madhya Pradesh, REWA Solar Project

Manu is the Principal Secretary in the New & Renewable Energy Department at the Government of Madhya Pradesh. With 29 years in the government sector, he has held a range of responsibilities in Government. Manu has championed a number of initiatives, including the enhanced utilisation of transmission capacity and the integration of renewable energy into the grid. Manu was part of the REWA Solar Project and a number of decentralised solar initiatives in Madhya Pradesh.

Sumit Sen, Director, Actis, advisor on REWA Solar Project

Sumit joined the Actis Infrastructure team in 2017 as a Director and is responsible for Actis’ infrastructure activities in India and South East Asia.  Prior to joining Actis, Sumit worked for 13 years at Goldman Sachs, most recently as Executive Director in the Principal Investment Area (PIA), where he was responsible for investments across sectors with a specific focus on energy, infrastructure, TMT and healthcare. Whilst at PIA, Sumit was a key member of the team that led the investment in Renew Power, one of the largest Indian renewable companies.

What role can the private sector play in a green transition? How is green financing implemented, and what are the current green financing trends? How does the policy environment incentivise the green transition?

These are a few of the key questions our panellists explored in this webinar, which focused on solutions and lessons learnt in the Belgrade Waste-to-Energy Project in Serbia and the Corsan Water Supply, Efficiency, and Resilience Project in Brazil.

The Belgrade Waste-to-Energy Project is cleaning up one of Europe’s largest uncontrolled landfills and constructing a new, sustainable waste-management complex. It is one of the first large-scale, bankable, private sector waste-to-energy projects in emerging markets.

Despite abundant surface freshwater, only 84% of Brazil’s people have access to potable water, and only 50% have access to sewerage. The Corsan Water Supply, Efficiency, and Resilience Project is leveraging private financing to address losses in water distribution and mitigate climate change risks.

Moderators and panellists

This session was co-moderated by Mr Henri Blas, Chief Content Officer, GI Hub and Ms Cheryl Edleson Hanway, Regional Industry Senior Manager for Infrastructure, International Finance Corporation.

Representatives of the Belgrade Waste-to-Energy Project, Corsan Water, and Sitawi – a leading sustainable financing second opinion provider in Brazil – joined as panellists for the session:

• Mr Stephane Heddesheimer, CEO of Recycling and Recovery, Suez
• Mr Roberto Barbuti, Chief Executive Officer, Corsan Water
• Mr Gustavo Pimentel, Managing Director, Sitawi

Learn more about the projects

Belgrade Waste-to-Energy Project

• Case study of the project, including structure
• IFC feature article: One of Europe’s Largest Landfills Gets a Makeover
• IFC press release: IFC and MIGA Support Pioneering Waste-to-Energy PPP Project in Belgrade
• IFC video: One of Europe’s Largest Uncontrolled Landfills Gets a Makeover

Corsan Water Supply, Efficiency, and Resilience Project

• Case study of the project, including financing details
• IFC feature article: Tapping into private finance for more resilient water systems
• IFC press release: IFC Helps Improve Water Supply Efficiency and Resilience in Brazil
• IFC video: Corsan at IFC’s Sustainability Exchange

In this panel discussion, participants were introduced to approaches to attracting institutional investors and mobilising capital markets, hearing solutions and lessons learnt from two recent projects: Continuum Green Energy's recent green bond issuance worth USD561 million to provide renewable power in India, including supporting the country's post-pandemic recovery, and Liquid Intelligent Technologies' USD620 million bond issuance to support wider broadband connectivity in Africa. 

The moderated panel discussion featured speakers from Continuum Green Energy in India and Deutsche Bank, and Liquid Intelligent Technologies in South Africa and JP Morgan, sharing insights and solutions on:

• Broad project objectives, including community benefits and sustainability objectives of the projects
• Policy and regulatory environment factors that impacted the deals
• How the projects were structured
• Strategies and approaches used to attract private capital
• Ways in which involvement of the private sector helped achieve public sector objectives.

Moderators and panellists

The session was co-moderated by Ms Marie Lam-Frendo, Chief Executive Officer, GI Hub and Mr Morgan Landy, Senior Director, Global Infrastructure and Natural Resources, International Finance Corporation.

Panellists for the session were:

• Mr Arvind Bansal, Chief Executive Officer and Founder, Continuum Green Energy
• Ms Kate Hennessy, Chief Financial Officer, Liquid Intelligent Technologies
• Mr Sameer Gupta, Managing Director - Head, India Debt Capital Markets, Deutsche Bank
• Mr Jitendra Mistry, Executive Director, Sub-Saharan Africa Debt Capital Markets, JP Morgan

Learn more about the projects

• Case study of Liquid Intelligent Technologies bond issuance
• Case study of Continuum Green Energy bond issuance