INTERNATIONAL FINANCIAL INSTITUTIONS (IFIS.) HAVE PLAYED AN IMPORTANT ROLE FOR THE ACHIEVEMENT OF TRANSPORT INFRASTRUCTURE PROJECTS FOR YEARS. WITH THEIR WORK THEY PROMOTE THE IMPLEMENTATION OF RAILWAY NETWORKS ON FIVE CONTINENTS.
The promotion of railway projects around the world has seen a considerable increase in recent years. The numerous environmental advantages, as well as the territorial structuring, have caused administrations to advocate for modernizing networks, building new systems and providing the population with renewed communication systems for both passengers and freight transport.
The increase of these networks is often possible because there is already an investment policy consolidated and developed over time and a financial support from diverse administrations and bodies.
IFIs are one of the most important figures in the definition of methodologies and pathways that facilitate the financing of infrastructures of general interest and making projects in a context of viable social equity. These institutions also contribute to the socio-economic return of investments.
The role of IFIs
An IFI is a supranational entity created by 2 or more countries that, through the funding and resources they combine, contribute to development. Shareholders are usually national governments, although occasionally other institutions or organizations may join in. Although bilateral IFIs do exist, the most prominent are those created by multiple nations.
Its origins date back to the post-World War II period when the so-called “Bretton Woods Institutions” were created, which were the International Monetary Fund (IMF) and the World Bank (WB).
The first one had the role of implementing international cooperation mechanisms associated with the management of the global financial system to stabilize exchange rates. The role of the second one was to help rebuild Europe, following the consequences of the war, and to rebuild the economies of developing countries.
Depending on the geographic area and area of action, there are global financial institutions such as the World Bank Group, the United Nations Conference on Trade and Development (UNCTAD), the World Trade Organization (WTO), the International Monetary Fund (IMF) or the Trade and Development Bank (TDB).
Regional IFIs include entities such as the European Investment Bank (EIB), the Inter-American Development Bank (IDB), the Asian Development Bank (ADB), the Central American Bank for Economic Integration (CABEI), or the Andean Development Corporation (CAF) among others.
“Although bilateral IFIs do exist, the most prominent ones are those created by multiple nations”.
MULTILATERAL BANKS PROMOTE TRANSPORT PROJECTS
Multilateral Development Banks have specific working groups on sustainable transport that cooperate to make further progress in this field. The objective of this joint collaboration is to launch in various parts of the world those initiatives that promote a more efficient mobility. To this end, 175 billion euros will be allocated in the period 2012-2022.
In September 2019, they presented the report “Progress Report (2016-2018 ) of the MDB Working Group on Sustainable Transport”, which analyses the progress made in this area.
During this period there was a marked increase in the funding of urban transport projects including tram systems, high-speed networks, as well as fleet renewal.
In addition, the railway for both, people and goods, also became more prominent in the list of approved plans.
WORLD BANK GROUP
Based in Washington, D.C., (USA) this organization provides financial support and financial and technical assistance especially to developing countries through a wide variety of formulas.
The aim of its work is to reduce poverty through loans on very easy terms and interest-free credit. It currently consists of 189 member countries.
The Bank has its own Department of Transport, Water and Information and Communications Technologies. From this division work is carried out to promote projects associated with these areas.
It also carries out an important work of “knowledge and development” through the preparation of reports and evaluations, as well as tools to know the number of kilometres of railway in the world, passengers and goods transported, etc.
Among the most recently approved projects are improvements in the logistics network in Turkey, additional funding provided for the Quito Metro (Ecuador), aid to facilitate transport networks in the Balkans, the promotion of a more sustainable freight transport in China, or the modernization of railways in Bosnia and Herzegovina.