Infrastructure, IFC-Style

by Candace Port-Hull, International Finance Corp., World Bank,

Serial Information: Worldwide Projects, 1993, Vol. 1, Issue 1, Pg. 16-20

Document Type: Feature article

Abstract: Interview with Everett J. Santos, head of the infrastructure department at the International Finance Corp.—the World Bank's private-sector arm. The department, created in July 1992 to promote the privatization of power, transport and telecommunications projects, will take on chores ranging from technical advice to equity investments and loan guarantees. For engineers and contractors becoming involved in privatization, the rewards from such projects are potentially high. According to Santos' office, the developing world will require US $1.5 trillion in additional electric generating capacity by the end of the decade, while spending for transportation infrastructure could reach US $100 billion a year; not all of this will be privately developed, but it shows the direction infrastructure is taking. Interview topics include the rationale for the IFC's involvement in privately funded projects; the elements of a typical financing package in which the IFC is involved; participation by host countries; the extent to which engineering and construction firms have put equity into projects; the use of local partners; guarantees for projects involving the IFC; the sectors that offer particular opportunities, including power, telecommunications, ports, railroads, gas distribution, toll roads and more; the prospects in several countries, including those of the former Soviet Union; the selection of contractors; procurement; dispute resolution; and political risk. A sidebar discusses a recent World Bank study that examined privatized projects in Europe, Asia and Latin America and concluded that local and foreign firms, as well as consumers and workers, benefitted from privatization.

Subject Headings: Infrastructure | Privatization | International development | Financing | Developing countries |

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