Practitioners' Conference on Mobilizing Urban Infrastructure Finance

Practitioners' Conference on Mobilizing Urban Infrastructure Finance in a Responsible Fiscal Framework Jaipur, Rajasthan, India January 6 – 8, 2005

JANUARY 6 9:00 am - 2:00 pm REGISTRATION CONFERENCE OVERVIEW 2:30 - 2:45 pm Patricia Clarke Annez, World Bank

SESSION I Reconciling Fiscal Discipline and Sub-National Investment Needs Chair: Vincent Gouarné, World Bank

This session sets the stage for the following two sessions by outlining the national framework for promoting urban infrastructure finance in a fiscally responsible framework. Five country cases will be presented (Brazil, China, India, Poland and South Africa). The presentations on the macroeconomic framework will discuss how to achieve fiscal discipline at the sub-national level, and the mechanisms to balance the tension between this objective and the need to mobilize funding for urban infrastructure at the local level. The local government presentations will address the same issues from their perspective, discussing how the national framework affects local government capacity to mobilize funding for infrastructure at the local level, and exploring means of expanding investment capacity without compromising fiscal discipline. Subjects to be covered include the impact of political and fiscal decentralization, limitations on borrowing, managing moral hazard, the role of the financial sector and achieving the right balance between stringent controls and encouraging local government responsibility for fiscal discipline, coupled with market discipline.

Session Overview 2:45 - 2:55 pm Robert Buckley, World Bank

MACROECONOMIC AND FISCAL PERSPECTIVE 2:55 - 3:10 pm Brazil Luis de Mello, Organization for Economic Co-operation and Development(OECD)

3:10 - 3:25 pm India Subhash Garg, Joint Secretary, Ministry of Finance, Government of India

3:25 - 4:10 pm OPEN DISCUSSION 4:10 - 4:20 pm Break

1 Practitioners' Conference on Mobilizing Urban Infrastructure Finance in a Responsible Fiscal Framework Jaipur, Rajasthan, India January 6 – 8, 2005

SUBNATIONAL PERSPECTIVE

4:20 - 4:35 pm Brazil Sol Garson, former Secretary of Finance, City of Rio de Janeiro

4:35 - 5:15 pm OPEN DISCUSSION 6:30 - 7:30 pm WELCOME RECEPTION Hosted by the Infrastructure Development Finance Corporation (IDFC)

Honorable Vasundhara Raje, Chief Minister, State of Rajasthan 7:30 pm DINNER

JANUARY 7

SESSION I – continued Reconciling Fiscal Discipline and Sub-National Investment Needs

MACROECONOMIC AND FISCAL PERSPECTIVE

9:30 – 9:45 am China Qiu Wenjin, Deputy Director, Department of Foreign Capital Development, Shanghai Development and Reform Commission

9:45 – 10:00 am Poland Krzysztof Ners, Vice Governor, Council of Europe Development Bank

10:00 -10:40 am OPEN DISCUSSION 10:40 - 10:55 am Break SUBNATIONAL PERSPECTIVE 10:55 – 11:10 am South Africa Philip van Ryneveld, former Chief Financial Officer, Capetown 11:10 - 11:25 am China Deepak Bhattasali, World Bank 11:25 - 12:05 pm OPEN DISCUSSION 12:05 - 1:05 pm LUNCH

SESSION II Mobilizing Financing for Urban Infrastructure Chair: Mr. Anil Baijal, Secretary Urban Development, Government of India

Session II will focus on strategies for mobilizing private savings for infrastructure investments. Presentations will examine: the roles of financial institutions serving primarily municipal borrowers (in India and South Africa), more specialized institutions funding environmental investments (Poland) and promoting private investments in infrastructure (India) and a case study of Shanghai, where funding from several sources was mobilized in a strategy that successfully achieved a massive expansion of local infrastructure. Brazil’s recent initiative to establish a framework to tap private participation in infrastructure will also be presented. Issues to be discussed include the role of different management and ownership structures, alternative mechanisms for servicing a backlog of investment needs in specialized areas such as environmental improvement, structuring relationships between governments and intermediaries, and experience with blending grant and loan funds. 1:15 - 1:25 pm Session Overview George Peterson, Urban Institute

DESIGNING AN INVESTMENT FINANCING STRATEGY 1:25 – 1:55 pm China Gao Guo Fu, President, Shanghai, Urban Development Investment Corporation

1:55 – 2:10 pm Brazil Aser Cortines, Vice President, Caixa Econômica Federal

2:10 – 2:25 pm Coffee Break 2:25 – 3:05 pm OPEN DISCUSSION

MOBILIZING FINANCE THROUGH MUNICIPAL DEVELOPMENT INSTITUTIONS 3:05 - 3:20 pm India

L. Krishnan, Special Secretary-Finance, Government of Tamil Nadu

3:20 – 3:35 pm South Africa Johan Kruger, Founder and Former CEO, INCA

3:35 – 4:15 pm OPEN DISCUSSION 4:15 – 4:30 pm Break MOBILIZING FINANCE THROUGH SPECIALIZED INSTITUTIONS 4:30 – 4:45 pm Environmental Funds: The Experience of Poland and EU Accession States Sonia Hammam, World Bank George Peterson, Urban Institute 4:45 – 5:00 pm India –Private Infrastructure Investment and Special Financing Vehicles P.V. Ravi, Vice President, Urban Infrastructure Development Finance Company LtD. 5:00 - 5:40 pm Open Discussion

6:30 – 7:30 pm RECEPTION

8:00 pm DINNER

Jaigarh Fort

Hosted by the Government of Rajasthan

JANUARY 8 SESSION III Recovering Capital Cost for Urban Infrastructure and Urban Services Chair: Mr. Anil Baijal, Secretary Urban Development, Government of India This session focuses on government resource mobilization and the measures needed to raise funding to cover the recurrent costs of infrastructure operation and service debt incurred for infrastructure investments. Two key topics will be examined: cost recovery and the role of the intergovernmental system. Strategies for cost recovery in Brazil, China and India will be discussed, examining the performance of systems with cross subsidization for low income users (Brazil and India), direct subsidies from government, and mandated cost recovery targets (China). The presentations on intergovernmental arrangements will cover Brazil, which is managing very tight budgetary constraints while seeking to expand social spending, and India, which is gradually implementing a fiscal decentralization to municipalities, in the context of both massive unmet demands for urban infrastructure services and substantial fiscal deficits at the State level. 9:00 - 9:10 am Session Overview Lili Liu, World Bank

COST RECOVERY AND PRICING POLICY FOR THE POOR Three Country Panel Discussion Carlos Antonio Luque, Deputy Secretary of Economy and Planning, State of Sao Paulo (Brazil) Gao Guo Fu, President, Shanghai, Urban Development Investment Corporation 9:10 – 10:00 am Qiu Wenjin Deputy Director, Department of Foreign Capital Development, Shanghai Development and Reform Commission Sameer Vyas, Managing Director, New Tiruppur Area Development Corporation Ltd. Om Mathur, IDFC Chair in Urban Economics and Finance, National Institute of Public Finance and Policy (India) 10:00 - 10:40 am OPEN DISCUSSION 10:40 -10:50 am Break

INTERGOVERNMENTAL ROLE IN INFRASTRUCTURE FINANCE Brazil 10:50 – 11:05 am Sol Garson, former Secretary of Finance, City of Rio de Janeiro 11:05 – 11:20 pm India Ranjit Banerji, Joint Secretary, Ministry of Finance, Government of India

11:20-12:00 pm OPEN DISCUSSION 12:00 – 1:00 pm WRAP-UP DISCUSSION Chair: Dr. Vijay Kelkar, Non-Executive Chairman, Infrastructure Development Finance Asset Management Company

1:00 – 2:00 pm LUNCH

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