Enhancing Connectivity through Transport Infrastructure

The Role of Official Development Finance and Private Investment

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Transport infrastructure is crucial to connect developing countries and help them to boost trade, growth and regional integration. This is because cross-border or long-distance roads and railways as well as international ports and airports are needed to move products and people around in a globalised world.

What can bilateral and multilateral development partners do to help connect developing countries through transport infrastructure? This report takes stock of continental and regional transport plans in Africa, Asia, Latin America and parts of Europe to place development co-operation in context. It then examines the strategies and activities of development partners for transport connectivity. It also takes a hard look at the allocation of official development finance for transport connectivity, particularly in relation to the distribution of private investment for the same types of infrastructure.

How large is the financing gap for transport connectivity to meet the Sustainable Development Goals? What can development partners do to fill this gap? How can they create an environment that can help mobilise more private resources? The report provides a comprehensive picture of the current state of play as well as food for thought on what can be done to move forward. It also features 16 profiles of development partners and their activities for improving transport connectivity.


Finance for transport connectivity

This chapter describes the general picture and distribution of financing for transport connectivity. It covers modes of transport, development partners, regions, income level groups, and recipient countries, by comparing official development finance and private investment. Specifically, while developing countries finance the majority of their transport connectivity, the private sector committed on average USD 52 billion per annum in 2014-2015. In comparison, development partners reporting to the Development Assistance Committee committed USD 15 billion. In general, development partners and the private sector appear to have different focus - the former are mainly Asia and Africa or low-income countries and lower middle-income countries while the latter are Latin America and Europe or upper middle-income countries. However, the amounts of private investment mobilised by development finance institutions and international finance institutions are relatively small and usually in countries that tend to have high private investment in transport connectivity, which raises the question of development additionality. As such, development partners could explore effective ways to help improve the enabling environment to attract private investment to fill the large financing gap for transport connectivity, particularly in low-income countries and lower middle‑income countries.



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