The World Bank and the Singaporean government agreed yesterday to launch an institutional partnership to focus on infrastructure financing and urban development in Asia.
As part of the agreement, the International Finance Corporation (IFC), the private sector investment arm of the World Bank, will look to partner with Singapore-based firms to invest in emerging markets and to “support the scale-up of critical infrastructure projects in developing Asia”, according to a statement.
In prepared remarks, World Bank Group President Robert Zoellick said the expanded Singapore office will be the first combined World Bank office outside Washington DC. The office, which is expected to grow to include a staff of 70 within the next three years, will provide access to services from the IFC and the World Bank’s Multilateral Investment Guarantee Agency (MIGA), which provides political risk insurance to private sector investors and lenders.
Zoellick said he hoped that MIGA’s increased presence in Singapore would “facilitate private investments from Asian investors in infrastructure”.
He also expressed hope that the expanded office would support increased private investment in East Asian infrastructure more broadly.
“We need to unlock private sector interest in infrastructure and bring more investors to the table. We need an integrated approach to support practical solutions for jump-starting the public-private partnership market,” Zoellick said.
Zoellick said the IFC Asset Management Company is already working with the Government of Singapore Investment Corporation on the IFC Global Infrastructure Fund. The fund is targeting $1 billion to back infrastructure investments in non-BRIC (Brazil, Russia, India, China) emerging markets, according to the IFC website.
Bert Hofman, chief economist for East Asia and the Pacific at the World Bank, will transfer from Washington DC to Singapore to direct the new office.
Zoellick and Tharman Shanmugaratnam, Singapore's deputy prime minister, signed the agreement to launch the partnership at the World Bank-Singapore Infrastructure Summit yesterday.
In a keynote interview at the summit, Zoellick argued that some issues around private investment in infrastructure in the developing world could just as easily apply to the US.
Recent US political discourse has not “emphasized enough the possibility of bringing in private capital”, Zoellick said. He also described the failed Pennsylvania Turnpike deal, which did not win approval in the state legislature in 2008, as one example of the US’ reluctance to accept private investment in infrastructure.
“It strikes me as interesting that in Communist China I can bring in private capital but in Pennsylvania I can’t,” Zoellick said.
World Bank infrastructure lending across the water, transport, energy, and information technology sectors totaled $24 billion for the fiscal year ending June 30, 2011, according to a statement.