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WB Ready to Help Vietnam Meet Growing Infrastructure Demands

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With a 7.1 percent growth rate in 2018, Vietnam’s fast-paced economic development is boosting demand for infrastructure, the World Bank Vice President for Infrastructure Makhtar Diop said today, during his first visit to the country. According to World Bank estimates, Vietnam’s sustainable infrastructure needs will require investments of up to US$25 billion per year.

Currently, about two-thirds of Vietnam’s infrastructure spending come from public resources. Diop emphasized that financing needs of the magnitude faced by the country now cannot be borne by the public sector alone. Increasing efficiency in public investments and establishing the right conditions to crowd in private financing in infrastructure development are important parts of the solution to infrastructure development.

During his three-day visit, Diop had fruitful discussions with leaders of the central government, cabinet members, the National Assembly, and local governments. During his meeting with Prime Minister Nguyen Xuan Phuc, Diop congratulated Vietnam for the country’s rapid growth while maintaining broad equity and urged the Government to share its development success stories with other peer developing countries that are facing similar challenges. 

At the same time, he expressed the World Bank Group’s continued commitment and willingness to support Vietnam’s infrastructure development agenda. He indicated that the WBG could contribute relevant global knowledge and expertise and emphasized that current favourable economic conditions would offer an opportunity to deepen reforms.

According to Diop, strong and quality investments in infrastructure will be key to sustain Vietnam’s economic growth in the medium and long terms. He praised the efforts to plan and prioritize national backbone infrastructure systems, including express ways, railways, and inland waterways; as well as sub-national infrastructure in key areas such as urban transport/mobility and waste water treatment; and regional integrated infrastructure that promotes economic development as well as address emerging challenges such as climate change.

The World Bank official also stated the Bank would stand ready to provide financing and technical support, as well as assist in mobilizing private sector resources, to help Vietnam develop its critical infrastructure. As part of the “Maximizing Finance for Development” approach, the Bank has been supporting the Government of Vietnam to create a well-functioning and enabling environment to attract private sector participation. This includes developing a strong Public-Private Partnership regulatory framework and a solid domestic financial sector that also ensures efficient operation of State Owned Enterprises as a crucial part of the infrastructure agenda.

As part of the trip, Diop met with Hanoi leaders to discuss the City’s infrastructure development needs, particularly urban transport and mobility. He also visited the port city of Haiphong to examine key infrastructure facilities, and witnessed development results brought about by the ongoing World Bank financed Haiphong Urban Transport Development Project, which helped improve urban accessibility and strengthen capacity for urban transport management and planning. He visited the manufacturing site of Vinfast – maker of Vietnam’s first automobile and e-scooter, and Lach Huyen International Gateway Port.

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The European Union continues to lead the global fight against climate change

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The European Commission today adopted a Communication reaffirming the EU’s commitment to accelerated climate ambition. Preparing for the Climate Action Summit by the United Nations Secretary General in New York on 23 September, the Commission recalls that the European Union has been at the forefront of global climate action, negotiating an inclusive international framework to respond to this challenge, while acting domestically with unity, speed and decisiveness. The EU has put concrete actions behind its Paris Agreement commitments, in line with the Juncker Commission priority of establishing an Energy Union with a forward-looking climate change policy.

Commission Vice-president for the Energy Union Maroš Šefčovič said: “With the Paris Agreement, for the first time all parties committed to reduce emissions. Now we must make sure these reductions are timely enough to avoid the worst of the climate crisis. The European Union will bring to New York the fruit of our work on the Energy Union: a realistic perspective of a climate-neutral Europe by 2050, backed by ambitious policies set in binding legislation. The EU has ensured that all sectors contribute to the transition. At the Climate Action Summit, we hope our plans will inspire other countries, and we hope to be inspired. Our message is simple: Europe delivers.

Commissioner for Climate Action and energy, Miguel Arias Cañete said: “The European Union has a powerful story to tell at the UN Climate Summit later this month. We are a global climate leader and our climate action is an outstanding example of delivery, including in the context of our Long Term Strategy process. The EU’s approach is to ensure that climate ambition is not only about headline targets, but about actual delivery on our promises, about making sure that objectives will be fulfilled and emissions reductions will happen. As shown by the EU-wide survey published today, our approach has a very strong mandate from our citizens. I am proud to share these messages also in New York.”

The European Union is the first major economy to put in place a legally binding framework to deliver on its pledges under the Paris Agreement and it is successfully transitioning towards a low emissions economy, with a view to reach climate neutrality by 2050. Ambitious climate action enjoys strong democratic support. According to the latest special Eurobarometer on climate change as published today, 93% of Europeans believe that climate change is a serious problem.

Moreover, the EU and its member states, true to their commitment to multilateral action rooted in science, are actively preparing to communicate by early 2020 a long-term strategy with the objective of achieving climate neutrality by 2050, as proposed by the Commission. The Commission presented its vision for a prosperous, modern, competitive and climate neutral economy in November 2018 and a large majority of member states endorsed this vision in June 2019. According to the Eurobarometer, 92% of Europeans supported making the EU climate-neutral by 2050. Under the Paris Agreement, all parties have to present a long-term strategy by 2020.

Background

The EU continues to deliver on its commitments:

The EU has the most comprehensive and ambitious legislative framework on climate action in place and it is successfully transitioning towards a low emissions economy, aiming at climate neutrality by 2050 – between 1990 and 2017 its greenhouse gas emissions were reduced by 23% while the economy grew by 58%.

The EU has already over-achieved its 2020 greenhouse gas emissions reduction target and has completed its unique binding legislative framework that will allow us to over-deliver on our climate targets for 2030. At the same time, the EU Adaptation Strategy has encouraged national, regional and local adaptation action since 2013.

Conscious that our emissions make up only around 9% of the global total, the EU is continuing its outreach and cooperation, financial and technical, to all partner countries. The EU remains the world’s leading donor of development assistance and the world’s biggest climate finance donor. Providing over 40% of the world’s public climate finance, the EU and its Member States’ contributions have more than doubled since 2013, exceeding EUR 20 billion annually.

Strong support from citizens

Ahead of the United Nations Climate Action Summit, the Commission carried out a special Eurobarometer on climate action and energy, which shows that in all EU Member States, citizens overwhelmingly support action taken to fight climate change, and want the EU and national leaders to increase their ambitions in this regard and strengthen Europe’s energy security.

The Eurobarometer shows that 93% of Europeans believe that climate change is a ‘serious problem’, and 79% see it as a ‘very serious problem’. Compared with the last Eurobarometer in 2017, climate change has overtaken international terrorism in being perceived as the second most serious problem facing the world today, after poverty, hunger and lack of drinking water.

The proportion of European citizens who have taken personal action to fight climate change has increased in all EU Member States to an EU wide average of more than nine in ten citizens (93%). The Eurobarometer results also show a demand for national governments to step up their own targets for energy efficiency and renewable energy (92%), and to give more public funding to renewable energy (84%). A strong majority of Europeans (72%) feel that reducing energy imports will have a positive impact on the economy and energy security, and 92% believe that EU must secure access to energy for all EU citizens.

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5 takeaways from the 2018 Africa Investment Forum

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“We want investments in Africa to land on a smooth investment runway. No bumps,”  – Akinwumi  A. Adesina, President, African Development Bank, at the 2018 Africa Investment Forum.

When Adesina laid out his vision to “tilt the flow” of capital towards Africa’s critical sectors through the Africa Investment Forum, the notion of convening a purely transaction-based forum, seemed more of an aspiration than a reality.

One year down the road, the verdict is undisputed: Africa’s investment opportunities are attracting investments in a big way, as highlighted by the five outcomes below.

1. The Africa Investment Forum platform offers a solid pathway for investments in the continent

The inaugural Africa Investment Forum “Market Days” secured record levels of investment interest in deals worth billions of dollars in just under 72 hours.

63 projects valued at $46.9 billion from 24 countries and across 7 sectors were discussed during closed boardroom sessions involving investors, project sponsors and government representatives. Investment interest was secured for 49 projects worth $38.7 billion.

A further $51.2 billion worth of deals were featured in the Africa Investment Forum Marketplace Project Gallery (a showcase of key projects for investors, but not discussed during boardroom sessions).

2. Multilateral partners delivering as one

Africa’s economic transformation is being achieved through collaborative leadership and strategic partnerships. Beyond the African Development Bank,  the Forum’s founding partners include: Africa 50, Africa Finance Corporation (AFC), African Export Import Bank (AfreximBank), Development Bank of Southern Africa (DBSA), European Investment Bank (EIB), Islamic Development Bank (IsDB), and Trade and Development Bank (TDB).

Development Finance Institutions (DFIs), multilaterals and global investors are keen to work together in ways never done before. This was demonstrated in the US$800 million deal agreement signed between Africa50, African Development Bank and the Governments of Democratic Republic of Congo and the Republic of Congo. This project which seeks to develop and finance the first road-rail bridge linking the two capital cities – Kinshasa and Brazzaville, was chaired in the Boardroom by Africa50.

3. Key multi-billion dollar signings

4. The Africa Investment Forum’s convening power

The Africa Investment Forum has positioned itself as an honest broker between governments and private sector stakeholders including project sponsors, investors and transaction facilitators.

A much heralded feature of the inaugural Africa Investment Forum “Market Days” was the presence of seven African Heads of State, who reiterated their commitment to providing an enabling environment for investors, with some of them further participating in several boardroom sessions of their respective countries.

The Lusophone development finance compact signed between the African Development Bank, the Government of Portugal and six Portuguese speaking countries of Africa (PALOPs) is another strong demonstration of the Forum’s convening power. A pipeline of private sector and private-public partnership (PPP) projects in excess of US5 billion have been identified in these countries.

5. The Africa Investment Forum’s Digital Platform

Following the 2018 edition, the African Investment Forum has launched a new digital platform, https://platform.africainvestmentforum.com/  to connect investors with investment opportunities in Africa, and vastly improve the quality of project information and documentation.

The Platform, as it is known, provides a live database of private/PPP projects and a repository of information on investors and technical assistance providers on the continent. The Platform currently hosts a community of over 500 users and 110 companies with more than 30% outside of Africa.

Looking ahead

The Africa Investment Forum is dedicated to advancing projects throughout Africa to bankable stages, raising capital, and accelerating the financial closure of deals.

Preparations for the 2019 edition are well underway. Roadshows have been held across the continent and further roadshows are scheduled for investors in North America, Europe and the Middle East.

The Africa Investment Forum, Africa’s Investment Marketplace is a game changer, and promises to provide the continent’s finest opportunity for accelerated economic transformation.

The 2019 Market Days will take place at the Sandton Convention Centre in Johannesburg, South Africa, from 11 to 13 November 2019.

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ADB Grant to Improve Water Resources, Enhance Productivity in Afghanistan

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The Asian Development Bank (ADB) has approved a $348.78 million grant to help in the development of water resources in Kandahar province through the expansion of Dahla Dam, the country’s second largest dam.

The project will help improve Afghanistan’s agricultural productivity, water resources management, energy generation, and growth outlook.

Stable, reliable, and well-managed water resources are essential for Afghanistan, where water is scarce and highly seasonal, greatly affecting the agriculture sector. The sector is Afghanistan’s major source of livelihood, employing 62.2% of the country’s labor force in 2017—two-thirds of employed women in the country work in agriculture—and contributing over 21% to the national economy. The lack of well-managed integrated water resources, especially of reliable irrigation water, hinders the sector’s huge potential and further contribution to the economy.

“Afghanistan has a water availability and management issue, with frequent and worsening droughts affecting the country’s agriculture outputs, people’s living standards, and economic productivity,” said ADB Principal Natural Resources and Agriculture Specialist for Central and West Asia Mr. Hans Woldring. “Addressing the country’s water resources issue will not only improve agricultural production in Afghanistan, particularly in high-value crops, but also provide security, both in water and energy, improving the country’s economic prospects.”

The Arghandab Integrated Water Resources Development Project will improve the availability and management of water resources in Kandahar province by rehabilitating and increasing the storage capacity of Dahla Dam, which was originally built in 1952. Construction works will include raising the main dam, six saddle dams, spillways, and other associated structures to increase the full reservoir level by 13.6 meters and storage capacity from 288 million cubic meters (mcm) to 782 mcm, while also realigning 9.6 kilometers of road that will be affected.

Increased storage capacity of the dam will provide the possibility of hydropower generation, which will be undertaken by the private sector, and additional urban and industrial water supply to Kandahar City and its surroundings, with the help of a $230 million grant from the World Bank.

The project will also increase reliable irrigation water supply by upgrading canals and structures, as well as introducing monitoring and control systems that will allow water on demand services in the province. Climate-smart irrigation and agricultural technologies and practices will be adopted to improve production and sustainability. Female farmers, in particular, will be empowered through increased training opportunities, scholarships, technology transfer, and advisory services.

Since 1966, ADB has invested about $545 million in water resources in Afghanistan, mainly for irrigation. ADB operations have so far resulted in 350,000 hectares (ha) of improved irrigated land, with more than 250,000 ha under development.

Key areas of ADB’s assistance to the sector include irrigation and water resources, agriculture market infrastructure, value chain development, integrated water resources management, institutional strengthening and reforms, and increased participation of women in agriculture.

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