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Policy Briefs

Scaling-up Financing for Infrastructure in Developing Countries: What Can the G7 Do

Task Force: Future of the Global Economy
Authors: Bakary Traoré, Federico Bonaglia, Rita Da Costa, Francesco Napolitano, Ibra Wahabou, David Dadakpete
Pubblication Date: May 2024

Abstract

Since the Monterrey consensus in 2002 and the Addis Agenda in 2015, the global financing landscape has significantly changed (Traoré et al. 2023). Many new financing instruments and new players have emerged. Over the same decades, many governments and multilateral bodies have invested significantly in building public-private partnerships (PPP) frameworks. Yet, the many developing countries are continuing to face multiples issues in accessing finance for ensuring sustainable development, as shown by the statistics on infrastructure financing gaps and the low contribution of private investments infrastructure. New global initiatives and ambitious targets – such as the MDBs reforms, the SDRs rechanneling mechanisms, the G7 PGII commitment, the G20 Principles for Blended Finance – have between recently led-out for scaling-up financing for infrastructure development. The G7 presidency can strategically leverage year 2024, which is the Bretton Woods 80th anniversary to shape conversation on how these ambitious promises can be delivered, moving forward. Drawing on recent OECD and global development think tanks reports, this policy brief will, first, highlight why governments and development partners haven’t been able to get the necessary financing for development at scale and intended speed, after decades of significantly in building public-private partnership frameworks for investments. Then it will recommendations on the specific role the G7 could play for scaling-up financing for infrastructure in developing countries.