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Developing international corridors across Africa, Asia and the Middle-East, lessons learnt from IDB experience
Dr. Walid Abdelwahab, Director
Infrastructure Department
Snapshot of IDB Group
Transport sector portfolio
Why finance international corridors?
7 best practices in corridor development from
IDB experience
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Outline
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Projects $ 42.02 billion (49.52%)
Trade financing $ 42.43 billion
(50.00%)
Technical assis-tance $ 0.41 bil-
lion (0.48%)
Cumulative IDBG financing 1396H-1433H in US$
Snapshot of IDB Group - Overview
1975 1981 1994 1999 2008
Energy, 36%
Transport & Coms; 31%
Industry, 12%
Agricul-ture, 11% Social, 6%
Other, 4%
Sector distribution of IDB project financing
US$ 84.9 billion total approvals since inception
Transport is a priority for IDB
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IDBG Initiatives for developing trade and transport across regions
1) Financing of critical transport infrastructure
Africa28.65%
Arab world24.11%
Asia46.89%
Other0.35%
Geographic distribution of (total approvals in US$)
Africa52%
Arab world23%
Asia24%
Other2%
Geographic Distribution (Number of projects)
Total Operations : 393
Total Operations : 57
51% of total in last 5 years
Total Financing : ID 4.42 Bn
Total 1429-34H: ID 2.27 Bn
Transport Scorecard
0
200
400
600
800
1000
1200
Annual IDB Approvals in the transport sector (USD million)
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Snapshot of IDB Group – Strategic focus on regional integration
Mid-term business strategy
Reform IDB
Alleviate Poverty
Promote Health
Universalize Education
Prosper the people
Empower the Sisters of Islam without breaching the tenets of Islam
Expand the Islamic Financial Industry
Facilitate Integration of IDB Member Country Economies Among Themselves and with the World
Improve the Image of the Muslim World
The strategic thrust of the IDB Vision 2020 is to support and promote greater economic cooperation and integration at regional level.
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Transport sector portfolio – Global initiatives
Source: A study of international transport corridors in OIC member countries, IDB, 2011
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Our focus on international corridors
Trans-Saharan Highway
SEETO CorridorCAREC
Corridors
Silk Road
Machreq Corridors
Prioritization criteria for international transport corridors
Involvement of OIC Member States Intra Regional Trade Potential Inter Regional Trade Potential Presence of Missing Links Importance of Non-Physical Barriers
Distance from Ports Connections with Capital Cities Connection Between Locations of
Economic Importance Transport costs along the corridor
Some Ongoing Projects across IDB constituency
7 best practices in corridor development from IDB experience
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Adopt a programmatic approach(i)
Build a strong case before resource mobilization(ii)
Set up an independent governance body(iii)
Consider alternative routes(iv)
Align multi-year country development plans(v)
Coordinate donor support through roundtables and joint preparation(vi)
Address physical and non-physical barriers to trade(vii)
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Adopt a programmatic approach(i)
7 best practices in corridor development from IDB experience
Programmatic approach helps ensure:
Strategic consistency Sustainability of the initiative Long term donor support Staged implementation Adaptation to country context and
national priorities
Ex) The CAREC corridors
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Build a strong case before resource mobilization(ii)
7 best practices in corridor development from IDB experience
Raise the profile of the program
through communication (events) and demonstration projects
Prepare comprehensive Feasibility study
Develop Bankable proposals (investment-ready)
Explore PPP opportunities
Ex) The Silk Road, linking Europe to Asia through trade
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Set up an independent governance body(iii)
7 best practices in corridor development from IDB experience
International corridor developments are multi-country multi-stakeholders initiatives, need to institutionalize through set-up of sound governance arrangements such as Steering Committee or Corridor Observatories
• Composed of Director of Roads from the 6 participating countries (Algeria, Chad, Mali, Niger, Nigeria and Tunisia)
• Set-up in 1966
• In charge of studying and implementing the program
• Bi-Annual coordination Meetings • Coordination of donor support and
roundtables
• Execute country programs while ensuring consistency across countries
• Platform for knowledge exchange and capacity building
The Trans-Saharan Liaison Committee
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Consider alternative routes(iv)
7 best practices in corridor development from IDB experience
For each corridor need to define the alternative routes composing the corridor and develop economic feasibility and preliminary studies at network and route level.
Ex) The South-East Europe Transport Observatory (SEETO) Comprehensive Network Road
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Align multi-year country development plans(v)
7 best practices in corridor development from IDB experience
A corridor is only as strong as its weakest link !
Need to ensure continuity of cross-border investments to address missing links in sequence.
Ex) Trans-African Highways
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Coordinate donor support through roundtables and joint preparation(vi)
7 best practices in corridor development from IDB experience
The coordination of donors is critical to ensure financial closure of major corridor projects. Donor roundtables or joint preparation missions are an efficient way to attract maximum donor support.
Ex) The Coordination Group of Arab donors, coordinating responses in the transport sector for more than three decades
Ex2) Machreq corridors and CAREC corridors co-financed with other MDBs
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Address physical and non-physical barriers to trade(vii)
7 best practices in corridor development from IDB experience
Border waiting times account for up to 48% of journey time across international corridors in the Arab region! (Source: AULT/IRU/IDB Project)
If non-physical barriers to trade are not tackled properly the impact of cross-border transport corridor projects is very limited
Ex) Barriers to trade in West Africa
Time –Distance (Blue) and Cost – Distance (Green) graphs for selected Arab corridors (Qatar-KSA-Egypt, Jordan-KSA-Kuwait)
Source: AULT/IRU/IDB project