The World Bank is making its biggest investments in infrastructure, energy, and clean water projects in several years, but it is disappointed that it has to.
This fiscal year, it says it will commit $24.2 billion in financing, an increase of 45% from the year before. It says it’s doing that because private financiers are not only failing to step up, they’re actually withdrawing support.
The World Bank is a financing organization that operates under the United Nations. It offers loans, advice, and other financial services to more than 100 developing countries. The World Bank Urban Advisory Unit is a member of the Council's Advisory Board.
Private projects suffer steep decline
Its financing boost comes as private investment has dropped by nearly 20%. Public-private partnerships and fully private projects have traditionally made up a strong majority of the investment in developing nations and even the sizable leap in World Bank investment does little to bridge that gap.
The decline in private investment equates to $35 billion; the World Bank’s funding increase erases only $7.5 billion of that loss.
Need far outstrips supply
Even before this year’s overall funding decline, the World Bank says there were more than $1 trillion in investment requests that weren’t met by it or private investors.
Because of that shortfall, there are numerous economies that continue to struggle because of a lack of health care, clean water, effective schools and adequate roads.
“Globally, we need additional funding for critical infrastructure projects, and so we welcome efforts that will lead to more long-term financing for transport, energy, clean water and sanitation projects,” World Bank Group President Jim Yong Kim said in a statement. “We have to remember our real competition is ending extreme poverty as soon as possible and our shared goal is to build opportunities and improve the lives of the poor.”
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