Over the past seven and half months, our posts showcased diverse examples of how MDBs and the IMF are designing public private partnerships, improving state-level fiscal management in big emerging market countries, supporting countries’ transition out of agriculture into industry, and providing technical advice to governments on improving the efficiency of public investment policies. Posts covering these topics included: a public-private partnership for the Cebu International airport; innovative fiscal management to support the health and other services in Bahia, Brazil; a joint effort to promote sustainable industrial growth in Africa through development finance; and the launch of a new Public Investment Management Assessment tool.

Fin4Dev has featured posts on innovative project financing for the giant Oyu Tolgoi mine in Mongolia as well as a piece on ‘Program for Results’, or PforR, an approach to financing that can help deliver on the basic services and other needs that are part of the Sustainable Development Goals enshrined in Agenda 2030.

We’ve published a piece on AFDB’s five-part vision for Africa’s sustainable development as well as a recent speech on EBRD’s plans for enabling the private sector to help refugee-hosting communities.

As an online experiment, Fin4Dev has fostered closer collaboration among communications staff and policy experts at the participating MDBs as well as the IMF. It has proven especially useful when announcing joint initiatives such as collective funding for implementation of the sustainable development goals or agreement around Voluntary Principles to mainstream climate action in financial institutions.

We will continue to write about these important issues on our individual institutional websites and blogs.

We are grateful to the experts who authored posts, the visitors who took the time to read our content, and to colleagues at the Inter-American Development Bank who created the Fin4Dev brand and platform.

Merrell Tuck-Primdahl, Outgoing Editor of Fin4Dev and Senior Communications Officer at the World Bank, has worked in the institution’s corporate communications, development economics and Europe and Central Asia departments for many years. Prior to that, she was a public relations professional and journalist. Follow her on @MTprimdahl.

Good afternoon and welcome to the EBRD.

Thank you, everyone, for joining us.

I know that many of you, our guest speakers included, have responded to our invitation to be here today at short notice. We appreciate your being here with us.

I would also like to express my gratitude to everyone here at the EBRD – and the hosts of tomorrow’s “Supporting Syria and the Region” Conference – for all the hard work to make this event happen.

There is a real sense of urgency about the themes we are going to discuss this afternoon.

The civil war in Syria is an appalling tragedy in itself.

But it has also provoked an enormous humanitarian crisis beyond its borders.

Millions of people have been on the move.

Many of the countries where we work are on their route out of Syria and are under huge strain themselves.

The ramifications of all this are being felt right across the Middle East and Europe.

That’s why it is so important that we mobilise our resources to help the refugees’ host countries – and the refugees themselves.

I am confident that today’s discussions here in London can help us with that goal.

The EBRD and its history

The scale of this crisis is such that the whole of Europe is involved.

This was not the vision for Europe we had when the EBRD was founded 25 years ago.

Our core mission then was to develop open and sustainable market economies in countries committed to, and applying, democratic principles.

The focus back then was on the countries of Central and Eastern Europe and the soon-to-be ex-USSR.

We’re now active on a much larger geographic scale: from Morocco to Mongolia, from Estonia to Egypt, we like to say.

But that core mission – and our emphasis on working with the private sector to fulfil it – is still the same.

We recently adopted new strategic priorities to help us deliver that mission in the world we live in today.

One of them is strengthening the economic resilience of the countries where we invest.  That means making them more competitive, stable, inclusive and better governed.

Another is addressing global and regional challenges.

At the time those priorities were approved, last May, I listed three of the many things the EBRD excels at.

1. It delivers results.

2. It innovates and modernises.

3. It faces up to challenges squarely and directly.

Ladies and Gentlemen, the crises we are currently witnessing in Syria’s neighbours hosting refugees are a stern test of those countries’ resilience.

They are a major regional – and global – challenge.

I would argue too that, for the EBRD, they are a powerful warning against complacency about who we are and what we do.

It is imperative that we confront these challenges head on.

The EBRD in the region

I mentioned just now the way we at the EBRD have expanded our footprint since 1991, the year we opened for business.

In fact, two of our ‘newer’ countries of operation are particularly relevant to the themes we are looking at today.

One is Turkey, which is an astonishing EBRD success story.

We only started investing in the country in 2009. Last year, for the second year running in fact, we invested more in Turkey than in any other country.

The 2015 figure was a record €1.9 billion.

We’ve had real impact on the ground, across all of Turkey. We now have three offices there, including one in Gaziantep in the south-east, the very region hosting many Syrian refugees.

We intend to do much more.

For now, I would highlight two of the priorities we have set ourselves in our recently adopted Turkey country strategy.

One is: improving the quality of infrastructure with the participation of private sector.

Another is: promoting regional and youth inclusion, as well as gender equality, to support long-term growth potential.

Both of these priorities are crucial to helping the host communities in Turkey to manage the large refugee flows.

Let’s move south now to Jordan.

We have only been investing there since 2012.

But the four countries of what we call the Southern and Eastern Mediterranean, which also include Egypt, Tunisia and Morocco, are a very fast growing area of our operations.

Let me cite a few of our strategic priorities in Jordan.

Among them are:

Boosting the creation of high quality jobs, including for women, to further develop a thriving private sector;

Promoting infrastructure reform and facilitating non-sovereign financing, where feasible, to develop the efficient delivery of infrastructure services;

And supporting water and energy efficiency in the municipal sector.

All of these are relevant to helping Jordan manage the influx of refugees.

I would also like to take this opportunity to mention Lebanon, another country hosting large numbers of refugees.

We are not currently working in Lebanon. But its request to become a shareholder has been approved, with a view to being a recipient of EBRD investments in the near future.

I am sure we could have a similarly transformative effect on the ground in Lebanon as we have had elsewhere.

We have also witnessed an upsurge of refugees fleeing the Western Balkans.

There we intend to expand some of our existing lending to Micro Small and Medium-sized Enterprises and the agribusiness sector to deal with the causes of outward migration and to reintegrate returning migrants.

New challenges

Such is the scale of our work in our region and some of the countries neighbouring Syria.

And, of course, those same countries are now playing host to millions of men, women and children who are fleeing the bloodshed in their native land.

This influx poses acute challenges for their labour markets, social cohesion and public services, as well requiring the emergency provision of shelter and humanitarian assistance.

By public services, I mean water, waste water, solid waste and urban transport, as well as others.

A small proportion of the refugees are in camps. But the majority are spread across the population at large. In Turkey, this includes a concentration in border regions as well as a presence across the country as a whole.

More than half the refugee population in Turkey is young, requiring education and seeking entry into the (informal) labour market.

And there is an important gender aspect to the crisis. In Turkey, half the refugees are female, the majority of whom are not in paid employment because they are care providers or cannot find work.

It is one thing to listen to these alarming statistics here in London, quite another to see for oneself.

I hope to do exactly that – see for myself – when I visit Turkey later this month.

In Jordan the situation is critical. There, at least one in five of the population are actually Syrian refugees – and many of them concentrated in the country’s north.

Here then are the challenges that the EBRD must face up to ‘squarely and directly’.

The good news is that we can do so in sectors of the economy where we have a notable track record: support for municipal services and support for small businesses.

Two important principles we will follow in this work are that it should benefit both host communities and refugees and that it should not grow the informal economy.

Another is the central role of the private sector in securing sustainable medium-term livelihoods for both refugees and their hosts.

That tallies with everything we have learned over the quarter of a century we have been in business.

One clear message I would convey from today’s proceedings is the need for international organisations, bilateral donors and multilateral development banks to foster partnerships with the private sector as they look beyond the short term humanitarian response to what is going on.

And we at the EBRD can help facilitate that dialogue and public-private partnerships in general. It’s one of our strengths.

Work is already underway to engage the private sector in this and I hope that today’s event can give those efforts added impetus.

These are, after all, the economic opportunities that tomorrow’s conference will be looking at, as well as raising new funding to help those affected by the crisis.

EBRD priorities

We’ve already made a start in boosting our support for services trying to cope with the increased demand.

As many of you know, Jordan has a critical shortage of water resources. Water consumption per capita and per day there is among the lowest in the world.

Ageing infrastructure also leads to serious water losses, especially in densely populated areas, where the majority of refugees are now housed.

We’ve addressed this problem in the past with investments in the country’s water infrastructure.

A new project, backed by a loan of up to US$ 14 million to the Water Authority of Jordan and signed in December, will allow an urgently needed upgrade of the sewerage network and more capacity to deal with the increased burden.

Note that this latest project was built on the strong foundations of previous work in the same sector.

We can do the same – build on strong foundations – in small business support, job creation through the private sector, and economic inclusion as well.

We have tried and tested ways of providing credit lines to local banks and microfinance institutions and technical assistance to small businesses, including businesses led by women, in many countries, including Turkey and Jordan.

We can offer direct finance, with risk-sharing and post-investment support, to flagship SMEs.

We can also source know-how via consultancy projects and support resource centres to provide information about starting a business.

We can do this now

And we can start doing this now.

We are ready to go, with highly qualified and experienced staff already in place.

Our plans flow out of our overall strategy for the next few years, in particular boosting economies’ resilience.

And they also reflect our strategies for these individual countries.

Clearly, there are still many obstacles to overcome before we can have the impact we would like, not least the lack of clarity regarding work permits.

I am glad to see that progress is being made on this front.

But our plans build on existing projects and pipeline – and acknowledged expertise in engaging with and mobilising the private sector.

That is our calling card.

I would stress too that we are, as always, ready to work very closely with our friends and colleagues from other multilateral development banks in dealing with these crises.

I have said many times that the IFIs can and should be greater than the sum of their parts.

But they can only be that if they do a better job of pooling their talents and leveraging their own special skills.

This is another great opportunity to grasp the nettle and rise to that particular challenge.

The importance of donors

I touched earlier on the principles which will guide our efforts in this sphere:

That they should benefit both host communities and refugees;

And that they should strengthen the formal, rather than the informal, economy.

There are some other principles at play here too, notably the principles that govern the way the EBRD operates day to day.

We need to fulfil the terms of our mandate and abide by the business model that has been at the root of our success for 25 years:  sound banking accompanied by structural reforms.

Over time that model has been bolstered in no small way by the very generous support of our donors.

In the Southern and Eastern Mediterranean and Turkey, donors and shareholders alike have provided grants for technical assistance to help prepare and implement investment projects, and for policy dialogue.

Additional funds have also been made available in the form of investment grants, risk sharing and incentive payments to support investments.

Now, in our response to this current crisis, we are faced with two new, exceptional circumstances: significant affordability constraints and higher levels of risk.

For example, many municipal budgets across the region are overstretched.

Host communities therefore face even higher barriers to investing in the improved municipal and environmental infrastructure they so desperately need.

For the projects we have in mind to support host communities and refugees to succeed and be sustainable, we will need substantial amounts of grant funding.

Indeed, without such grant funding we will not be able to get such projects off the ground.

I should add too that such funding would need to come on top of the resources committed by donors until now. These have already been largely allocated to the existing portfolio.  A reallocation of existing grant resources will not do.

We are now building a pipeline of infrastructure and private sector investment projects in Turkey and Jordan to support refugee-hosting communities, under which we could finance up to €500 million in new transactions subject to mobilising an additional €400 million in grants.

In order to contribute to the mobilisation of grant funding, management will propose to shareholders an allocation from the EBRD’s net income of around €100 million over a period of three years, 2016-2018, subject to appropriate governance rules and to the Bank’s continuing profitability.

Management will propose to shareholders an initial allocation of €35 million in 2016.

At the same time we are already in advanced talks with several donors and are ready to widen those discussions to involve more.

The more resources we can tap, the more investments we can leverage.

We are also looking into calling on existing and emerging multilateral funding sources.

Such instruments are very powerful as they enhance coordination and can offer sizable funding.

But, given the need to move swiftly, we also need to secure bilateral funding. That, typically, comes with faster sign off.

I repeat:  we already have projects and clients lined up and ready to launch.

We also have “in-house” vehicles and project delivery mechanisms in place for donors to channel their contributions without delay.

More projects such as the one to upgrade strained wastewater infrastructure in the Zarqa river valley can then be fast tracked and deliver results.

We really can secure sustainable livelihoods for men and women, whether from host communities or refugees.

Sum up

Ladies and gentlemen, one of the targets contained within the new Sustainable Development Goals obliges us all to “facilitate orderly, safe, regular and responsible migration and mobility of people, including through the implementation of planned, well-managed, migration policies”.

It sometimes seems that that will be one of the hardest targets for us to deliver in time for the 2030 deadline for the SDGs.

But we need to get to work because, however appalling the current human tragedy, I fear it will not be the last.

Migration crises and the strains they impose on host countries are going to be the new normal.

Jordan has many decades of experience of the problem already.

The world as a whole is going to have to get much better at coping with these crises.

Tomorrow some of you here today will be attending the “Supporting Syria and the Region” Conference in London.

I will be there too and I will report to world leaders on our proceedings here.

Despite appearances to the contrary, my message will be one of optimism.

We can support refugee-hosting communities – and the private sector is the best way to do so.

It can deliver investments that secure lasting and sustainable results for both refugees and their hosts.

I hope that some of you here in the audience today can lead the way on this.

Rest assured, we will be leading the way, in partnership with you.

Thank you very much.

Sir Suma Chakrabarti is the sixth President of EBRD. Sir Suma has extensive experience in international development economics and policy-making, as well as in designing and implementing wider public service reform. He previously held the position of Permanent Secretary at the British Ministry of Justice. Prior to this, from 2002, he headed the UK’s Department for International Development.

Just as the Hospital do Suburbio emerged from great need, people in Bahia faced a shortage of high quality and complex imaging equipment and tests. Some of these were as basic as X-rays and mammography; others demanded state-of-the-art machines and services for CT Scans and MRI tests. This fed into the Bahia’s larger public health challenges, which included low bed turnovers and overcrowded hospitals.

The partnership with the private sector was created to solve this “package” of problems.  It was undertaken in partnership with the Brazilian Development Bank (BNDES) and the Inter-American Development Bank (IDB), which together manage the Brazil PSP Program fund, a project that fosters the development of infrastructure and services in Brazil in partnership with the private sector.

Relationships key to this PPP
The IFC team that worked on the Hospital do Suburbio PPP also developed this PPP for imaging diagnostics, and this was no coincidence: government officials approached us because of the strong relationships forged during that first project, during which time our team gained deep, broad knowledge of Brazil’s health sector.

For this new PPP, past was prologue.  Many of the officials on the government side played a role in the first PPP and therefore understood how to work together for the best outcome on an efficient timeline. This was helpful in several ways. For example, we understood the state’s health priorities and its most critical health issues, and we had insight into the internal institutional linkages.  This allowed us to create an integrated PPP, with elements that could work together across Bahia’s public health system.

Results that make a difference
The AFP consortium won the bid for the Imaging and Diagnostic PPP in Bahia. The winning proposal was composed by a yearly maximum government payment of $30 million. The consortium is made up of highly qualified companies: Phillips do Brasil (a medical equipment provider), Alliar (one of the largest diagnostic-medicine networks in Brazil with over 30 health facilities that offer patients image-based diagnostic exams in cities throughout Brazil) and FIDI (the largest diagnostic-medicine operator that provides services to SUS, the Brazilian public healthcare system). The bidding took place at Bovespa, the Brazilian stock exchange, reinforcing the Government’s commitment to a fair and transparent bidding process.

When the concession agreement was signed in February 2015 — the first PPP with the scope of imaging and diagnostic services in Brazil – 45 new pieces of equipment became available for the people of Bahia and will be placed in imaging units in 12 hospitals across the state. This includes four new CT scan services and three new MRI services, along with one new diagnostic center. Because the 12 units will be connected to the diagnostic center, specialist medical staff can provide, via telemedicine, rapid diagnostic information to doctors back at the hospitals.

Overall, over $40 million in private investment in operating equipment and infrastructure was contributed, leading to improved access to high complexity tests for underserved areas in both the capital and the countryside. Quality and availability indicators guarantee higher efficiency, including the delivery of diagnostic reports in less than one hour for emergency patients. Though this was indeed a significant deal for the stakeholders involved in the transaction, the real winners are the Brazilian people, who gain services and resources for decades to come.

In the World Economic Outlook Update released on January 19, we still, however, expect growth to pick up this year in most countries.

Despite the modesty of the reduction we see in general growth prospects and the promise of improvement in coming years, downside risks to our central scenario have intensified. In our view, a focus on these risks is the main factor driving recent developments in financial markets.

We may be in for a bumpy ride this year, especially in the emerging and developing world.

Fundamental to the current global conjuncture are the same three forces we highlighted in October: China’s slower growth and rising financial-market risks amid a process of macroeconomic rebalancing away from the traditional industrial and construction sectors; the fall in commodity prices, notably the price of oil; and asynchronous trends in monetary policies, especially between the United States and most other advanced economies. The effects continue to play out. Since mid-October, for example, the price of base metals has declined a further 15 percent while that of oil has declined a further 40 percent.

Paradoxically, while risk-averse investors have focused on the potential negative impacts of these developments, each of them is two-sided and carries a silver lining that should make the negative effects on total world growth less dire than markets now seem to expect—especially over the longer term. China’s rebalancing is essential for its transition to a more sustainable and resilient consumption-based growth model; lower commodity prices benefit consumers and lower production costs; and the Federal Reserve’s well communicated interest-rate increase of December reflects the relatively strong performance of the United States economy, still the world’s largest. Yet, these changes also pose big adjustment challenges for many countries, and it is those that dominate the medium-term outlook.

Global outlook

What are the specific numbers? We project that global economic growth of 3.1 percent in 2015 will accelerate to 3.4 percent in 2016 and 3.6 percent in 2017. The 2016 and 2017 figures are both 0.2 percentage point below the levels we hoped for in October. While emerging market and developing economies account for more than two-thirds of this downward revision, we project they will accelerate moderately in both 2016 and 2017, compared to last year. Advanced economies will accelerate slightly in both 2016 and 2017, but likewise, to growth rates slightly below those that the last World Economic Outlook foresaw.

As always, aggregate averages conceal considerable diversity among individual countries. The small downgrade in our projection of advanced-economy growth is driven by slightly less optimism about the United States. Growth prospects for the euro area, the United Kingdom, and Japan are broadly unchanged.

Looming large in the emerging and developing group are countries facing especially severe multiple challenges and strongly negative 2015 growth, for example, Brazil and Russia (along with its CIS neighbors), whose sharp contractions this year should decelerate over the coming two-year period. However, while reduced from earlier years, growth looks better in other Latin American economies and in emerging and developing Europe. Growth prospects in parts of Asia have diminished somewhat as a result of the unexpectedly big external spillovers from China’s growth transition. In contrast, India, a major net commodity importer, continues to grow at the fastest pace among large emerging economies.

Downside risks

There are a number of specific downside risks to our scenario, and as always, events in an important stressed economy can spill over to others through effects on trade, asset and commodity prices, and confidence.

One downside risk is that China’s economy could encounter rough patches where growth slows more than expected, directly affecting trade partners while disturbing foreign exchange and other financial markets worldwide. We have maintained our 2016 and 2017 growth assessments for China in light of the robust development of its service and “new economy” sectors, as well as fiscal policy actions aimed at supporting demand. But the picture could change farther down the road. Continued strong growth in China is dependent on its authorities’ prompt, decisive action to address remaining imbalances and legacies of past ones. In addition, clear communication of a coherent overall policy strategy, including with respect to the yuan’s exchange rate, is critical both for domestic stability and that of markets abroad.

Depreciating currencies have been useful shock absorbers for many emerging and developing economies, but could eventually expose corporate balance-sheet weaknesses where there are foreign-currency exposures. Related, private capital inflows to emerging and frontier markets came to a virtual halt in the third quarter of 2015, with China accounting for most of the fall. The acceleration and broadening of this trend is a potential threat despite the enhanced buffers provided by international reserves. Another stress indicator is the general increase in sovereign spreads in Latin America and Africa; and a further increase in global risk aversion, for whatever reason, could lead to even tighter financial conditions for vulnerable economies.

Finally, political and geopolitical risks have intensified, not receded, in recent months. Prominent among these, refugee outflows from Syria and Iraq are imposing extreme burdens on neighboring countries and have spilled over into Europe, sparking political discord within the European Union and threatening its current framework for free labor mobility. Rapid absorption of refugees into labor markets will ultimately lift output, but will place up-front demands on public budgets. As difficult as are the challenges for the receiving countries, we must not lose sight of the source-country security concerns that give rise to both internal and external displacements. These impose immense costs, first of all on the refugees themselves.

Need for action

In advanced economies, currently projected growth rates are too low rapidly to reduce high unemployment and other legacies of recent crises, or to spark strong growth in real wages. In emerging and developing economies, currently projected growth rates substantially slow convergence to higher incomes. Action is needed. Policy recommendations must be country-specific, but at a general level there are three priorities:

First, to support aggregate demand in the face of subdued activity and, in some countries, continuing deflationary pressures.

Second, to support economic efficiency and long-term economic growth in the face of evidence that potential growth rates have fallen worldwide over the past decade. An important element here is structural reform, which will be a main theme of the April 2016 World Economic Outlook.

A final need is to further strengthen and widen the international safety net, bolstering global resilience to whatever may lie ahead.

See also Obstfeld video and Infographic.

Maurice Obstfeld is the Economic Counsellor and Director of Research at the International Monetary Fund, on leave from the University of California, Berkeley. At Berkeley, he is the Class of 1958 Professor of Economics and formerly Chair of the Department of Economics (1998-2001).  He arrived at Berkeley in 1991 as a professor, following permanent appointments at Columbia (1979-1986) and the University of Pennsylvania (1986-1989), and a visiting appointment at Harvard (1989-90). He received his Ph.D. in economics from MIT in 1979 after attending the University of Pennsylvania (B.A., 1973) and King’s College, Cambridge University (M.A., 1975).

From July 2014 to August 2015, Dr. Obstfeld served as a Member of President Obama’s Council of Economic Advisers. He was previously (2002-2014) an honorary advisor to the Bank of Japan’s Institute of Monetary and Economic Studies. He is a Fellow of the Econometric Society and the American Academy of Arts and Sciences. Among Dr. Obstfeld’s honors are Tilburg University’s Tjalling Koopmans Asset Award, the John von Neumann Award of the Rajk Laszlo College of Advanced Studies (Budapest), and the Kiel Institute’s Bernhard Harms Prize. 

He is also the co-author of two leading textbooks on international economics, International Economics (10th edition, 2014, with Paul Krugman and Marc Melitz) and Foundations of International Macroeconomics (1996, with Kenneth Rogoff), as well as more than 100 research articles on exchange rates, international financial crises, global capital markets, and monetary policy.

This post was first published on iMFdirect.

In December, IFC Global Head of Mining Namrata Thapar and MIGA Senior Underwriter Alan Narayadu traveled to Ulaanbaatar to sign more than $2 billion in financing and guarantees for Oyu Tolgoi, one of the largest undeveloped high-grade copper deposits in the world.

Oyu Tolgoi, located in the South Gobi desert, has a projected mine life of at least 40 years and is set to generate thousands of jobs and billions of dollars in government revenues and local spending, while providing high-quality, low-cost ore for industrial and other use. The IMF has estimated that Oyu Tolgoi’s development will generate more than $5 billion of foreign direct investment and yield fiscal revenues of around one third of Mongolia’s GDP.

IFC provided a $400 million own-account loan and arranged $821 million in debt from 15 commercial and development banks—its largest-ever “B-loan” or syndication deal. MIGA provided a guarantee for $1 billion to 13 commercial banks, MIGA’s largest guarantee issued to date.

Open pit mining is already underway at Oyu Tolgoi, but more than 80 percent of the value of the site lies in a “Phase 2” underground mine, which the IFC and MIGA support will be used to develop. Oyu Tolgoi LLC, a joint venture of Rio Tinto Plc-controlled Turquoise Hill Resources Limited and the Mongolia state-owned Erdenes Oyu Tolgoi LLC, raised $4.4 billion in project financing in the transaction. It was one of the largest project finance deals in the history of the metals and mining industry.

Construction on Oyu Tolgoi’s underground mine is expected to advance in 2016.

IFC’s Thapar, who has worked on Oyu Tolgoi since its earliest days, said the strong interest from commercial and development banks to join the transaction showed the World Bank Group offering was strong. “With the right blend of IFC and MIGA products, significant volumes of funds can be mobilized from the commercial bank market, leveraging IFC’s own capital several times,” she said. “It is one of the largest mining finance transactions in history and an example of how IFC’s patient capital and focus on sustainable environmental and economic development can help advance large and complex projects.”

MIGA’s Narayadu also saw the project from start to finish. He commented, “MIGA catalyzed additional commercial bank debt by deploying a combination of our own balance sheet and that of our public and private reinsurance partners. This was no small feat.” He continued, “We are enormously proud of our role in procuring the risk capacity to support Oyu Tolgoi— as it really marks a watershed moment for Mongolia.”

Narayadu noted that the key stakeholders of the project, including the Prime Minister of Mongolia, expressed their gratitude to the World Bank Group for its strong demonstration of support to this project and to their country.  “In addition, our private-sector counterparts were also complimentary about the ease of collaboration between MIGA and IFC, as well as with the broader financing group.”

Sujoy Bose, IFC Global Director of Infrastructure and Natural Resources, said Oyu Tolgoi would remain competitive throughout the commodity cycle because of its low-cost operation and high-quality copper and gold deposits. “We are delighted to see it advance with support from Rio Tinto and our international banking partners, and are committed to ensuring that Oyu Tolgoi supports local job creation and business growth in Mongolia and meets international best practices,” he said.

“We are very proud to play an integral risk-sharing role for Oyu Tolgoi’s underground expansion,” said MIGA’s Executive Vice President and CEO Keiko Honda. “I want to stress the importance of this investment for the Mongolian people—as they will benefit from the creation of thousands of jobs, enhanced infrastructure, high-quality training, and significant government revenue.”

To access a MIGA project brief on Oyu Olgoi, click here. For IFC information on the investment, click here.

About the co-authors:

Cara Santos-Pianisi is a Communications Officer at MIGA.

Laura MacInnis is a Communications Officer at IFC.

The first large-scale PPP project to reach financial close under the current administration’s PPP program, it has also been the only one so far to attract significant levels of foreign investment as well as the highest number of bid participants.

The need to upgrade the airport’s facilities has been recognized for some time, leading to a situation where Mactan Cebu—originally built as a US Air Force runway in the 1950s—is severely overstretched. The current terminal was designed to accommodate 4.5 million passengers a year, but now serves close to 7 million annually, straining the infrastructure to its limits, and leading the Philippine government to earmark the project as a top priority for development under its flagship PPP program.

Once the expansion is completed in 2019, the airport’s capacity is expected to triple to 15 million passengers a year, and the significant improvements to the facilities are expected to greatly enhance passengers’ in-airport experience. These will include the construction of a new passenger terminal and associated apron, the renovation and upgrade of the existing passenger terminal, the development of commercial facilities.

After winning a bidding process that including several of the world’s leading airport operators, full operation and management over the 25-year concession period was awarded to GMR Megawide Cebu Airport Corporation, a consortium between Megawide Construction and GMR Infrastructure. Megawide is an established Filipino construction company that has won four other PPP projects in the country, while GMR is a holding firm based in Bangalore, India that develops a wide range of infrastructure projects and is considered the fourth largest private airport operator in the world.

The project raised financing from a mix of local and offshore sources in both pesos and dollars in a ratio matching the expected portion of peso to dollar revenues. The loan tenor for both the onshore and offshore portion of the debt is among the longest raised for project finance transactions in the country. The financing benefits from a relatively standard security package, including step-in rights over the main project documents. Financial close for the full debt package was achieved at the end of January 2015.

ADB provided the $75 million dollar portion of the debt, while a consortium of seven local banks contributed the remaining PHP20 billion ($438 million) in a deal arranged by local firm BDO Capital. ADB and BDO Capital also led the legal, financial and technical due diligence, including the negotiations of the financing agreements.

Contrary to perceptions from some quarters that the Philippine PPP market is closed to international sponsors and lenders (given the predominance of the local conglomerates and the liquidity of the local banks), the Mactan Cebu project has proven that there are opportunities in the Philippines for international sponsors, multilaterals, local and international banks. Its successful financial close should boost confidence in the market and provide a clearer path ahead for future PPPs in the country.

Gena Uy is Senior Investment Specialist, private Sector Operations. Ms. Uy is responsible for ADB’s support for private sector infrastructure projects in the Philippines, Lao PDR and Vietnam. She has been involved in various infrastructure projects in Southeast Asia covering power and transport sectors. Before joining ADB in 2003, she worked on loan syndications, corporate finance, credit risk management, trade operations, and financial institutions for Citibank.

This post by Ms Uy first appeared on ADB’s blog platform.

The group had learned from implementing and monitoring the Millennium Development Goals (MDGs), when many were indeed left behind. In their view, lack of recognition of peace and statebuilding was the underlying reason why the MDGs were not transformative. Country level stewardship and leadership were also critical, but many were not able to bring the MDGs into national contexts. Most of the MDGs were either unreported or under-reported due to lack of data. Even when countries emerging from conflict and fragility made progress, this was not recorded. The majority of G7+ members lacked sufficient data on extreme poverty or employment to be able to make an assessment of progress.   Over the past five years, the G7+ had worked collectively so that they were not “beggars for ODA (official development assistance).” Member countries support each other (Fragile2Fragile initiative); they focus on what can work for them (private sector, job creation, domestic resource mobilization) and seek the support of international partners by taking action to address their own challenges. The proposal to jointly monitor select SDG indicators was born out of these experiences. Although each country will develop its own strategy for SDG implementation, joint monitoring would provide a tool to call the world’s attention to their fragile situations in the coming fifteen years.

Over two days at their meeting in Nairobi, participants agreed on 20 indicators – three for Goal 16 on inclusive and peaceful societies, and one for every other goal. According to their plan, the g7+ secretariat will collect and screen the data, maintain a common database and disseminate the information. The data will come from international sources and from g7+ countries themselves if available. The proposed indicators will be discussed for endorsement at the g7+ ministerial meeting in March 2016. Throughout the formulation process of the SDGs, the G7+ had advocated for a specific goal on peace and security, and they are proud of their success. Now, there is a sense of responsibility within the group to be at the forefront of moving Goal 16 from rhetoric to reality.    How can the SDGs add value to countries going through cycles of crisis? G7+ members are very clear on the link between the global framework and crisis situations at the country level – and their own role. What emerged from their discussions is the conviction that unless they put their collective efforts into “pulling” the SDGs and especially Goal 16 to the country level and demonstrate the foundational value of peace and stability to development, they risk another miss, like their experience with the MDGs. With limited statistical capacity, the group is discussing with the World Bank how they can work together to implement their plan to monitor the selected indicators. In Nairobi, they took a step towards developing a monitoring platform to advocate for the SDGs to work for them.

Anne-Lise Klausen leads partnerships in fragile and conflict affected situations as Senior Operations Officer, Fragility, Conflict and Violence Group, World Bank, based in Nairobi. She is the focal point for cooperation with the g7+ group of fragile and conflict affected countries, the International Dialogue on Peace and Statebuilding and co-chairs the OECD/INCAAF Task Team on Implementation and Reform.

In two Public-Private Partnerships blog posts last month, Matthew Jordan-Tank, EBRD’s Head of Infrastructure Policy head, describes the most recent developments that are advancing the joint PPP agenda, then explains the power of the PPP Knowledge Lab.

Merrell Tuck-Primdahl, Editor of Fin4Dev and Senior Communications Officer at the World Bank, has worked in the institution’s corporate communications, development economics and Europe and Central Asia departments for many years. Prior to that, she was a public relations professional and journalist. Follow her on @MTprimdahl.

“The United States Congress approval of these reforms is a welcome and crucial step forward that will strengthen the IMF in its role of supporting global financial stability. The reforms significantly increase the IMF’s core resources, enabling us to respond to crises more effectively, and also improve the IMF’s governance by better reflecting the increasing role of dynamic emerging and developing countries in the global economy.

“A more representative, modern IMF will be even better equipped to meet the needs of all its 188 member countries in the 21st century.”

Background information and useful links:

The 2010 Quota and Governance Reforms were approved by the Board of Governors in December 2010 (see Press Release No. 10/477) and build on an earlier set of reforms that was approved by the Board of Governors in April 2008. These include quota increases for all member countries under the 14^th General Review of Quotas and an amendment to the Articles of Agreement on the reform of the Executive Board, enabling an all-elected Executive Board for the first time. The reforms require the acceptance by the membership—with an 85 percent majority of the total voting power—which in many cases involved parliamentary approval.

Main Outcomes of the 2010 Quota Reforms:

• All 188 members’ quotas will increase as a result of the agreed bolstering of the Fund’s quota resources to about SDR 477 billion (about US$659.67 billion) from about SDR 238.5 billion (about US$329.83 billion).

• More than 6 percent of quota shares will shift to dynamic emerging market and developing countries and also from over-represented to under-represented members.

• Four emerging market countries (Brazil, China, India, and Russia) will be among the ten largest members of the IMF. Other top 10 members include the United States, Japan, and the four largest European countries (France, Germany, Italy, and the United Kingdom).

• The quota shares and voting power of the IMF’s poorest member countries will be protected.

• For the first time, the IMF’s Board will consist entirely of elected Executive Directors, ending the category of appointed Executive Directors (currently the members with the five largest quotas appoint an Executive Director).

• There will be further scope for appointing a second Alternate Executive Director in multi-country constituencies with seven or more members to enhance the constituency’s representation in the Executive Board.

• Advanced European countries have committed to reduce their combined Board representation by two chairs.

• The doubling of quotas together with the shift in quota shares and the move to an all-elected Board mark a significant step forward in the process of IMF quota and governance reforms.

IMF Executive Board Approves Major Overhaul of Quotas and Governance
http://www.imf.org/external/np/sec/pr/2010/pr10418.htm

IMF Quota and Governance Publications
http://www.imf.org/external/np/fin/quotas/pubs/index.htm

Quota Factsheet
http://www.imf.org/external/np/exr/facts/quotas.htm

How the IMF Makes Decisions Factsheet
http://www.imf.org/external/np/exr/facts/govern.htm