Global Agenda Risk Mitigation Instruments in Infrastructure Gap Assessment

The report finds a significant gap between the infrastructure financing needs of emerging markets—estimated at $1 trillion to $1.5 trillion annually—and the current use of risk mitigation instruments. Despite the availability of various tools from IFIs, market participants perceive them as too complex, lacking standardization, and burdensome to use. The document recommends that IFIs standardize their product offerings, create a tradable infrastructure debt asset class, establish harmonized dispute resolution mechanisms, and potentially form a global risk mitigation facility to better attract institutional capital.

• There is a massive infrastructure financing gap in emerging and developing economies, estimated between $1 trillion and $1.5 trillion annually, which exceeds the combined capacity of governments, aid agencies, and multilateral development banks.
• Risk mitigation instruments provided by major international financial institutions have seen very low market adoption, accounting for only 4.5% of total financing operations in 2013.
• Market participants perceive current risk mitigation instruments as being too complex, lacking standardization, and costly, which makes them burdensome for the private sector to utilize.
• The report identifies a deficiency in the technical capacity of IFIs to execute risk mitigation instruments and notes that internal processes are often inefficient even when capacity exists.
• In Africa, infrastructure needs are estimated at approximately $1 trillion for 2016-2030, and risk mitigation instruments are perceived as available but not used, with high costs and low accessibility.
• In Asia, significant financing needs exist (e.g., $3 trillion for India), but investment is hindered by sub-investment grade ratings for traditional project financing and illiquid regional bond markets.
• The most deterring factors for infrastructure investment in emerging economies include delays in project completion (construction risk), lack of final approvals/permits (completion risk), and foreign exchange risks (macroeconomic/political risk).
• The report recommends that IFIs review and limit their offerings to a small number of common, standardized products available globally to increase transparency and accessibility.
• To attract institutional investors, the report suggests creating a tradable infrastructure debt asset class by standardizing underlying debt instruments and disclosure requirements.
• The report proposes the establishment of a harmonized dispute resolution mechanism to protect investors from opportunistic government behavior and information asymmetry.
• A proposal is made to establish a global or regional risk mitigation facility to provide standardized products and potentially strengthen local capital markets by guaranteeing local currency bond financings.

APA

World Economic Forum (2016). Global Agenda Risk Mitigation Instruments in Infrastructure Gap Assessment. http://www3.weforum.org/docs/WEF_Risk_Mitigation_Instruments_in_Infrastructure.pdf

Chicago

World Economic Forum. Global Agenda Risk Mitigation Instruments in Infrastructure Gap Assessment. 2016. http://www3.weforum.org/docs/WEF_Risk_Mitigation_Instruments_in_Infrastructure.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Global Agenda Risk Mitigation Instruments in Infrastructure Gap Assessment |date=July 2016 |url=http://www3.weforum.org/docs/WEF_Risk_Mitigation_Instruments_in_Infrastructure.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2016global, author = {{World Economic Forum}}, title = {{Global Agenda Risk Mitigation Instruments in Infrastructure Gap Assessment}}, institution = {World Economic Forum}, year = {2016}, month = jul, url = {http://www3.weforum.org/docs/WEF_Risk_Mitigation_Instruments_in_Infrastructure.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }