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International CEO Forum IV Dr. Ravi Ratnayake Director Poverty and Development Division

REGIONAL INFRASTRUCTURE DEVELOPMENT: OPTIONS FOR FINANCING. International CEO Forum IV Dr. Ravi Ratnayake Director Poverty and Development Division UNESCAP 17 December 2007, Bangkok. Structure of the Presentation. Role of Infrastructure. Challenges.

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International CEO Forum IV Dr. Ravi Ratnayake Director Poverty and Development Division

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  1. REGIONAL INFRASTRUCTURE DEVELOPMENT: OPTIONS FOR FINANCING International CEO Forum IV Dr. Ravi Ratnayake Director Poverty and Development Division UNESCAP 17 December 2007, Bangkok

  2. Structure of the Presentation Role of Infrastructure Challenges Infrastructure investment needs Regional cooperation for financing infrastructure

  3. Production of goods & services Trade & investment Regional integration Infrastructure & Economic Growth Infrastructure is key to:

  4. Sharing the benefits of growth Income generation Education & Health Infrastructure & MDGs Infrastructure promotes:

  5. Challenges Transport Rural connectivity is an issue in some countries Water & Sanitation Access to safe drinking water & sanitation is low Energy One billion people lack access to electricity

  6. ICT Very visible digital divide Natural Disasters The Asian & Pacific region is the most disaster-prone region of the world Challenges

  7. Infrastructure Investment Requirements Aggregated Demand & Limited Coverage Sectoral Projections & Broader Coverage 600 500 400 >600 B Annual Needs (US$ bill.) 300 200 228 B 100 0

  8. UNESCAP Estimates (Annual Needs in US$ billion) Energy 201 B (33.0%) 21 B (3.4%) ICT Telecom Transport 224 B (36.8%) Transport Energy Wat-San 107 B (17.6%) W&S Disaster 56 B (9.2%) TOTAL > 600 B

  9. Financing Gap: Sectoral DistributionUNESCAP-based Estimate WATER US$ 66.0 B / yr (30%) ENERGY US$ 60.7 B / yr (28%) ICT US$ 14.4 B / yr (7%) DISASTER MANAGEMENT US$ 27.1 B / yr (12%) TRANSPORT US$ 52.0 B / yr (24%) GAP: US$ 220 B / yr

  10. Financing Gap & Regional Resources US$ billions UNESCAP- based Gap 220 B / yr 200 B / yr Surplus > 3 T Forex

  11. Regional Cooperation How to intermediatefinancial resources in the region to infrastructure investment ? The Study puts forward four options for regional cooperation in financing infrastructure development

  12. Facilitate its access to capital markets ASIAN DEVELOPMENT BANK Institutional Arrangements 1. Asian Development Bank Expand its mandate: Give higher priority to infrastructure development

  13. North East Asian Development Bank South Asian Development Fund Institutional Arrangements 2.Subregional Development Banks & Funds Operationalize, reinvigorate & consolidate existing proposals:

  14. Institutional Arrangements 3. Asian Bond Fund Expand its mandate to increase geographical coverage financial scale

  15. Institutional Arrangements 4. A New Institution New financial institution modeled after the EIB Raise funds from capital markets Provide financing & guarantees Assist in the identification & evaluation of projects

  16. Benefits for SMEs Potential is high Globally account for 50% of GDP,30% exports 60-75% of private employment Major source of innovation and economic and social cohesion Growth of SMEs hampered by infrastructure deficit Regional development bank could take a lead in financing the infrastructure gap

  17. Thank you United Nations ESCAP

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