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 Ababa Agenda for Action in 2015, the global financing landscape has significantly changed (Traoré et al. 2023). New financing instruments and new players have emerged. Many governments and multilateral bodies have invested significantly in building public-private partnerships (PPP) frameworks. Still, many developing countries continue to face multiples challenges in accessing finance for ensuring sustainable development, as shown for example by persistent gaps in infrastructure financing and the low contribution of private investment to infrastructure projects. New global initiatives and ambitious targets have been launched to scale-up financing for infrastructure development. Relevant examples include the MDBs reform agenda, the SDRs rechannelling mechanisms, the commitments of the G7 PGII, or the G20 Principles for Blended Finance. The Italian G7 presidency can strategically leverage year 2024, which is the Bretton Woods 80th anniversary, to shape a conversation on how these ambitious promises can be delivered. Drawing on recent OECD and global development think tanks reports, this policy brief highlights 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 investing in building public-private partnership frameworks. It then elaborates some recommendations on the specific role the G7 could play for scaling-up financing for infrastructure in developing countries.