Reliable and efficient infrastructure is essential for growth and poverty reduction. It lowers production and transactions costs, increases private investment, raises productivity, and removes economic bottlenecks. The demand for infrastructure and other services is huge but investments have not matched needs.
As the development paradigm evolves, urbanization and national fiscal constraints are placing new emphasis on sub-national entities to provide or finance infrastructure and other public services. Decentralization assigns new prominence to three types of sub-national entities: local governments, public utilities/SOEs, and the development finance institutions that fund them. Sub-national entities have broader mandates and responsibilities but they may not be able to fulfill them where there are weak financial and management capabilities, evolving regulatory environments, or thin local capital markets.
NEW UPDATE: KNOWLEDGE VIDEOS
Check out these three videos from Au Courant on Financing Cities, which covers both public and private financial sources.
Financing Cities: Part 1: Overview (French)
Financing Cities: Part 1: Overview (English)
Financing Cities: Part 2: Public Financing
Financing Cities: Part 3: Private Financing
The objective of the SNTA program is to help sub-national entities develop their capacity to access market-based financing without sovereign guarantees to improve infrastructure services. The program provides technical assistance activities such as capacity building designed to improve the credit worthiness of sub-national entities and their investment projects, as measured by appropriate local credit ratings and/or actual access to financing. Such capacity building is expected to produce improved financial management, strengthened governance and human resource capacity, as well as improved investment planning and project preparation.
The SNTA Program works upon PPIAF’s eligible sectors: Energy, Transport, and Water and Sanitation supporting entities that primarily target infrastructure finance. In some cases, general obligation borrowing by a municipality might be designed to support other sectors, such as housing, health and education. This kind of financing would be eligible for support as long as infrastructure investment was the primary objective.
Eligible countries include recipients of official development assistance as defined by the OECD Development Assistance Committee’s List. Requests from low-income countries will receive special consideration.
The SNTA program typically provides assistance to the following types of activities: