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Transport and infrastructure

The Addis Agenda encourages multilateral development banks and regional banks to “address gaps in trade, transport and transit-related regional infrastructure, including completing missing links connecting landlocked developing countries, least developed countries and Small Island developing States within regional networks”. See also the section on Closing the infrastructure gap.

Incomplete and outdated transport and infrastructure systems in vulnerable countries hinder their development, increase their costs of trade as well as commuting, and hold their economies back from fully exploiting their potential for structural transformation and sustainable development. As a share of total ODA to countries in special situations, aid to transport and storage increased in LDCs and LLDCs from around 8 per cent over 2000–2010 to 8.9 and 9.4 per cent respectively in 2015. In SIDS, these flows increased from 6.6 per cent in 2000 to 16.1 per cent in 2015, but have displayed far more volatility, reaching a trough of 4.7 per cent in 2010.

Several initiatives have been put in place to support infrastructure development. The Inter-American Development Bank (IADB) and the CAF Development Bank of Latin America have invested in improving connectivity in the region. The new Silk Road Fund was established by China in December 2014, and the Asian Infrastructure Investment Bank was formalized in 2015. The Asian Development Bank (ADB) established a new fund to support private infrastructure investments across Asia, capitalized by $1.5 billion in equity.

Since its launch in July 2015 with around $700 million in initial capital subscriptions from 20 African states and the African Development Bank, the Africa50 Infrastructure Fund has been mobilizing funds from African states, international financial institutions, institutional investors such as pension and sovereign wealth funds, insurance companies and other private sector entities. 90% of the financial pledges were earmarked for project financing and the remainder for project development. At the first Annual General Meeting in July 2016 two more African governments and two central banks joined Africa50. Capital should reach US$ 1 billion in early 2017 and the medium-term target has been raised to US$ 3 billion.

The Global Infrastructure Forum was launched in April 2016 with an aim to align coordination among the full suite of infrastructure actors, including the private sector. This forum will allow for a greater range of voices to bridge infrastructure and capacity gaps, particularly in challenging environments.

The Continental Business Network (CBN) was launched in June 2015, on the margins of the World Economic Forum in Cape Town, South Africa, as an African Union Heads of State and Government response to facilitate private sector advice and leadership in essential continent-wide infrastructure projects. The CBN serves as the continental platform between private and public sectors to promote implementation of the Programme for Infrastructure Development in Africa (PIDA). It aims to engage and advance private sector priorities and requirements to invest in regional and cross-border projects.

The small size, remoteness and insularity of SIDS pose daunting challenges in transport and trade logistics. While their unique vulnerabilities with regard to transport had been recognized decades ago, they, nevertheless, remain ever more present today and are further exacerbated by concurrent trends such as globalization, environmental degradation, climate change and limited financial resources for infrastructure development and maintenance. In relation to maritime transport, relevant challenges are affecting, among others, shipping services, transport costs, port infrastructure and equipment, as well as markets and operations. The age of some port infrastructure and superstructure, often combined with poor maintenance, is compromised in many SIDS.