News
The Infrastructure Recovery and Assets (INFRA) Platform has been developed by the World Bank to bridge infrastructure financing, project preparation and capacity gaps resulting from the global financial crisis. As part of this effort, ESMAP, under its Country Power Sector Vulnerability Assessments (PSVA) program, is providing support for a rapid diagnostic assessment in 20 developing countries in five regions focusing exclusively on the power sector.
The regional vulnerability assessments are in various stages of completion. A half-day training session on PSVA took place on January 28, 2010 at the World Bank, Washington DC. In addition to key findings, the regional task teams discussed approaches used, issues encountered and lessons learned so far from the assessments.
East Asia: The already completed assessment revealed short-term funding gaps in the investment programs ranging from US$787 million in Vietnam to US$2.815 billion in Philippines covering the period to 2009-2010. A follow-up assessment is being carried out for Vietnam and the Philippines to design more project-specific response strategies.
Middle East and North Africa: This regional assessment covers Egypt, Jordan, Morocco and Tunisia. The presentation focused on Egypt facing at this point a substantial funding gap given the projected need for an additional generation capacity of 9,000 MW in the next 5-7 years. This large gap can be met by substantially reengaging private sector investors and financiers. In this regard, there is a need for credit enhancement support particularly for international commerical lenders.
Latin America and the Caribbean: In Colombia and Peru where diagnostic work is most advanced, the financial crisis has had relatively limited impact on the power sector. However, WBG help is proposed to support hydro projects in both countries. In Jamaica, initial results show increased financing cost of power projects and potential risk of supply crisis by 2014. A series of WBG interventions is proposed to strengthen the power sector.
Europe and Central Asia: Preliminary assessments in Ukraine, Kyrgyz Republic and Armenia unveiled the impact of the crisis through revenue and financing channels, resulting in delayed and grossly insufficient investments even in the area of rehabilitation and maintenance. In particular, these countries face serious difficulties sourcing new loans.
South Asia: The regional assessment is most advanced for Bangladesh, which despite its relative isolation from the global credit crunch, faces a financing gap of US$5.9 billion in the next five years given the country’s ambitious electricity investment program. The challenge for Bangladesh lies not only in mobilizing sufficient resources to fill the large financing gap but also in developing effective institutional arrangements to implement the investment projects.
Contact
Istvan Dobozi, Lead Energy Economist, ESMAP