Although until now the World Bank (WB) has not formally been part of IIRSA, the institution can — and in fact does — support its projects. Throughout the last year, IIRSA’s Executive Committee president, Roberto Salinas from Paraguay, visited the World Bank seeking financial support for the initiative. His visit sparked a series of speculations about WB participation in IIRSA.
The World Bank’s Finance, Private Sector and Infrastructure Offices for Latin American and Caribbean region confirmed that the Bank backs regional integration efforts and considers IIRSA projects within the framework of the Country Assistance Strategies (CAS) developed for each borrowing country.
The WB plans to invest in various IIRSA projects. Other World Bank projects are also part of IIRSA and are already underway. For example, the International Bank for Reconstruction and Development (IBRD) has approved partial-risk guaranteed loans for the Peruvian government to advance infrastructure projects. Such initiatives include more than six type-A projects –the riskiest social and environmental category. These guarantees are given through the Ministry of Finance.
The list of eligible projects includes the following IIRSA initiatives: Puerto Callao, Red Vial N4, Red Vial, as well as a group of 12 regional airports (which include the three IIRSA projects up for concession) and expansion and modernization of the Piura, Tarapoto and Pucallpa airports. Such partial-risk guarantees include projects in the Amazon (groups 3 and 4) and the Andes (groups 5 and 7). In addition, the World Bank finances four type-B projects in Uruguay through a sector-specific loan granted to the Ministry of Transportation and Public Services. The loan allows for the expansion of Puerto Nuevo Palmira, the repairing of the Montevideo-Fray Bentos road, as well as the renovation of the Rio Branco-Colonia corridor, a well-known IIRSA project. The Bank has also disbursed US$500 million in regional loans to Brazil for the restoration of more than 25,000 kilometers of federal highways which are most likely to include some IIRSA projects.
Until now, none of the development banks that provide financial support to IIRSA have indicated how they will ensure adequate standards, policies, and social and environmental processes at the sub-regional and regional levels once their various investments become part of a set of IIRSA-led projects. Despite the fact that IIRSA is already being implemented, these institutions have not addressed issues of external costs and indirect and cumulative impacts that might arise from the integration of hundreds of infrastructure projects throughout the region.
Isn’t it time to apply the SEAs?
Robert Goodland, former director of the World Bank’s Environment Department, has written an article about Strategic Environmental Assessments (SEAs). SEAs serve as a tool to carry out ex-ante, integrated evaluations of policies, programs, and regional development plans—this is precisely the IIRSA initiative.
In the case of the World Bank, Dr. Goodland recommends that “…the best way to start an SEA is to look at the list of infrastructure projects included in the Country Assistance Strategy (CAS)…” He also explains that although the IDB has implemented various SEAs (including a post-hoc SEA in Camisea), the results have not been disseminated. In his article, Dr. Goodland urges the banks to incorporate the SEAs in the CAS, in the programmatic and structural adjustment loans, in sector-specific areas of technical assistance, and even in efforts to include the effects of climate change in the evaluation of loans. Nevertheless, the author questions whether the SEAs can have an appropriate impact on financial institutions such as the World Bank, where public relations activities are granted a larger budget than environmental safeguards policies.