31 January 2019

Global Infrastructure Hub identifies success stories in infrastructure project preparation

31 January 2019

The Global Infrastructure Hub (GI Hub) has released a new reference tool to help governments lay the foundations for strengthening project preparation processes and capacities in order to prepare bankable and sustainable projects—a prerequisite for tackling the substantial global infrastructure gap. 

The new Governmental Processes Facilitating Infrastructure Project Preparation tool was developed by taking a deep-dive analysis of project preparation practices in 15 countries that demonstrated elements of leading practice in project preparation and achieved successful outcomes. 

The tool complements the work of the multilateral development banks who provide support to countries through their project preparation facilities (PPFs). The GI Hub’s work adds to that body of knowledge from a unique government perspectiverather than that of the PPFsand builds on work underway at the G20 and in other multilateral fora.    

Morag Baird, GI Hub’s Director of Leading Practices, highlights that the scarcity of well-prepared projects often presents a greater barrier to addressing infrastructure needs than the availability of finance.  

“The early stages of planning and project conceptualisation are particularly crucial for laying the foundation for successful project development,” Ms Baird said 

“An infrastructure project that is poorly conceived from the start will always result in an asset where cost is out of proportion to its usefulness; the dreaded ‘white elephant’.  

“Recognising these issues from the outset can help countries establish procedures and capacity to ensure that they only invest in projects with a clear project rationale and options appraisal, that are commercially viable, affordable, and deliverable—as highlighted in the G20 Principles for the Infrastructure Project Preparation Phase.” 

According to the new reference tool, project preparation costs typically range from about three per cent to 10 per cent of total project investment. 

This equates to US$2.82 – US$9.4 trillion of the US$94 trillion infrastructure investment needed to 2040, outlined in the GI Hub’s Global Infrastructure Outlook report. Therefore, it is important to target and utilise available funds as effectively and efficiently as possible.    

Matthew Vickerstaff, Interim CEO of UK’s Infrastructure and Projects Authority, added:  

"As the UK Government's centre of expertise for infrastructure and major projects, we welcome this practical tool that will help governments and infrastructure practitioners understand best practice for project delivery.  

Ultimately it is both the quality of the people delivering the project, and the importance of the system in which projects are delivered, that helps ensure projects are set up for success." 

Matthew Jordan-Tank, Head of Infrastructure Policy at the European Bank for Reconstruction and Development (EBRD), said: 

“The Hub’s publication of this new reference tool on project preparation processes is really well-timed. EBRD, alongside many other MDBs, have developed a number of PPFs over the past years to help countries ramp up their infrastructure investments and deliver more effectively. 

“This new contribution by the Hub is a key complement to this work, and we welcome it wholeheartedly as we all move forward with this key piece of the global infrastructure support agenda.” 

The reference tool is available freely on the GI Hub’s website: https://www.gihub.org/project-preparation