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A new report from Christian Aid demonstrates that a more promising approach to reducing poverty and protecting the climate is possible. More than one billion people neither have access to clean water nor modern energy.

Lesotho Collection | South African History Online

The situation is particularly precarious in sub-Saharan Africa, where 70 percent of the population — and a much higher percentage of rural people — have no access to electricity and clean water supply. Over the past 50 years, centralized water and power projects have largely bypassed these population groups.

Lesotho plans to diversify its economy through fruit farming

Over the past two months, the powerful Group of 20 , the World Bank and other development banks have produced three reports on how to tackle the infrastructure needs of the poor. Unlike in the past, they have not consulted civil society — let alone poor people — on this challenge.

The G20 simply outsourced the task to a high-level panel of experts, primarily from the private sector. The three reports all make similar suggestions:.

Infrastructure Finance

Farmers affected by the Lesotho Highland Water Project. The banks propose to focus support on big, complex projects such as large dams, transmission lines and transport networks that can modernize and transform whole regions. The second pillar of the new strategy is to strengthen support for private infrastructure investments.

And even though the strategy papers acknowledge that percent of project values are lost to corruption and mismanagement, they all propose to make procurement rules, which aim to cut down on corrupt practices, more flexible. The new documents only pay lip service to poverty reduction, environmental protection, and climate change. The G20 report for example includes a list of six criteria, according to which development banks should prioritize future infrastructure projects.

Electricity from Grand Inga would serve far-away places. One project is used again and again to illustrate the new approach: the Inga Dam on the Congo River.

3E (PTY) LTD Lesotho

This example is telling. Its first stage — the Inga 1 and 2 dams — have turned into an expensive white elephant that hardly provides any benefits to the poor. Even the rehabilitation that the World Bank is currently funding has turned into a bottomless pit of mismanagement.

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It has low gross national income, and a significant poverty level. To ameliorate this condition, the government has embarked on a pro-poor, growth strategy that includes public, and private investment in infrastructure.

It explores the level of private participation at this phase in the evolution of the reforms, which is considerable, given the country's small size, limited institutional capacity, and lack of public and private investment capital. Telecommunications has recorded the most significant reform of any of the infrastructure sectors. Other than telecommunications, reforms in other sectors have not advanced significantly. Not surprisingly, the report identifies specific lessons learned from the telecommunications sector, and examines their relevance to reform efforts under way in the other sectors.

In summary, this report finds that private participation in infrastructure could offer Lesotho three key advantages: 1 augmenting budget resources in cases where the private sector undertakes to finance projects, or services that would not otherwise be funded, 2 improving the quality and efficiency of service delivery, and, 3 accelerating investments in infrastructure.

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By the same token, the report makes clear that private participation in infrastructure PPI carries significant down-side risks that, despite the best of intentions, could lead to negative fiscal impacts, lower than expected service quality, disruptions to service, or more dire consequences. The report presents an action plan with three primary elements: 1 the creation of a PPI Facilitation Unit to assist line ministries in implementing PPI projects; 2 specific priorities pertinent to each respective infrastructure sector; and, 3 cross-cutting reform measures addressing policy, regulatory, and legal actions needed to provide an enabling framework, and facilitating environment for PPI projects.

Public-Private Infrastructure Advisory Facility, Handle: RePEc:wbk:wbpubs as.

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