Multilateral development banks (MDBs) are especially well suited for infrastructure financing, as they can provide the long-term financing needed for infrastructure investment to become profitable, given the large scale of the initial investment and the long amortization time. Furthermore, MDBs can offer finance at a relatively low cost as they have very high credit ratings (typically as high as and sometimes higher than their member governments). Thus, they can borrow relatively cheaper on the international capital markets and pass on that cost advantage to their borrowers. However, the role of a development bank goes well beyond providing finance on a large scale. The halo effect (implying that the bank is participating in some form in the project, through loans, equity, or guarantees), the provision of coordination functions among different stakeholders, and the support both financial and technical for project preparation, at an individual level, but also for a series of projects, is also extremely valuable.
Challenges and Opportunities for MDBs in 21st Century Infrastructure Finance
In light of the overwhelming needs for infrastructure finance in emerging and developing economies and the limitations facing alternative flows of financing, there is a clear role of MDBs to continue and in fact step up their activities. The Infrastructure Finance in the Developing World Working Paper Series is a joint research effort by GGGI and the G-24 that explores the challenges and opportunities for scaling up infrastructure finance in emerging markets and developing countries.
The Future of Mobility - Scenarios for China in 2030
What might one expect for the future of mobility in China in 2030? Mobility is defined as the ability to travel from one location to another, regardless of mode or purpose. RAND researchers used a six-step scenario development process to develop two thought-provoking scenarios that address this question.