FACT SHEET: Partnership for Global Infrastructure and Investment at the G7 Summit
At the 2023 G7 Summit in Hiroshima, Japan, G7 leaders affirmed their commitment to identify new opportunities to scale the Partnership for Global Infrastructure and Investment (PGII), President Biden and the G7’s flagship infrastructure initiative which has attracted major investors to better respond to the global demand for high quality infrastructure financing, in low- and middle-income countries.
Since its launch, G7 Leaders have, through PGII, started to work towards the goal to mobilize hundreds of billions of dollars in infrastructure financing – delivering energy, physical, digital, health, and climate-resilient infrastructure. This work is done with a real focus on advancing gender equality and equity, raising labor and environmental standards and promoting transparency, governance, and anti-corruption measures.
During the Summit, G7 Leaders were joined by leaders and senior officials of Australia, Comoros, Cook Islands, India, Indonesia, Vietnam, the Republic of Korea, and the World Bank. They were also joined by private sector executives of Citi, Global Infrastructure Partners, Japan Foreign Trade Council, and Nokia to reaffirm their commitment to opening a serious, sustainable channel for unlocking public and private capital for these projects in the developing world.
Together, they identified methods to further mobilize infrastructure investment, with a particular focus on leveraging private capital to maximize the project pipeline. The leaders also showcased how PGII is connecting and catalyzing like-minded countries, the private sector, multilateral development banks, and development finance institutions to drive investment in quality global infrastructure.
The United States announced a series of new PGII announcements to build out transformative economic corridors through PGII and drive infrastructure investments that can boost and connect economic development across multiple countries and sectors.
- To date, the United States has mobilized $30 billion through grants, federal financing, and leveraging private sector investments towards PGII.
- President Biden also announced new projects and highlighted the impact of several projects announced since PGII’s launch at the 2022 G7 Summit, showcasing how the U.S. Government (USG) is collaborating with partners to develop transformative ecosystems of infrastructure investment that support inclusive growth, benefit partners’ economic security, diversify our global supply chains, and create new opportunities for American workers and businesses.
- U.S. private sector representatives from Citi and Global Infrastructure Partners delivered remarks and highlighted key flagship projects worth $4 billion that demonstrate how PGII aims to mobilize the private sector as drivers of quality global infrastructure and investment. GIP also expects to deploy over $20 billion in projects that will advance PGII over the next 10 years.
- The incoming White House Senior Advisor to the President for Energy and Investment, Amos Hochstein, will join the newly designated group of G7 senior government officials who will provide strategic direction to drive PGII investments with partners, including the private sector.
- The United States will seek to launch an annual Investor Forum to enable the USG to more comprehensively de-risk capital, play a matchmaking role between investors and opportunities that advance PGII, and hear feedback on how it can continue to refine the PGII model to maximize its effectiveness.
President Biden also announced new PGII projects that reflect how the USG is working with partners to better mobilize capital for infrastructure in emerging markets.
Investments in Key Economic Corridors: Creating and strengthening economic corridors that connect economies through key transportation infrastructure; making clean electricity more affordable, reliable and available to all; bringing information and communications technology (ICT) network solutions to rural communities; integrating agricultural hubs to increase regional food security, improve access to health care; and aggregating demand for clean energy solutions to fuel these corridors and service local communities.
As an example, the United States is supporting the development of the Lobito Corridor with an initial investment in a rail expansion that may become the primary open access transportation infrastructure connecting the Democratic Republic of the Congo (DRC) and Zambia with global markets through Angola. PGII is actively pursuing additional opportunities to connect the initial Lobito Corridor investments across the continent, to Tanzania and, ultimately, the Indian Ocean.
Initial investments include:
- Rail Consortium: The U.S. International Development Finance Corporation (DFC) is currently performing due diligence for a potential financing package of $250 million to finance the Lobito Atlantic Railway Corridor – an open access rail line from Lobito Port in Angola to the DRC border. This deal would be the DFC’s first investment in rail on the continent. This project is the first step to connect and develop trading and economic activity from Angola to the DRC, that can help promote greater investments in agriculture, digital infrastructure, and expanded access to electricity.
- Solar Deployment: The Export-Import Bank of the United States (U.S. EXIM) approved for Congressional notification an initial $900 million in financing for two solar projects that were announced at the 2022 G7 Summit by the Government of Angola, U.S. firm AfricaGlobal Schaffer, and U.S. project developer Sun Africa. Together, the projects will generate over 500 megawatts of renewable power; provide access to clean energy resources across Angola; help Angola meet its climate commitments; and support exports of U.S. solar panels, connectors, switches, sensors, and other equipment.
- Digital: Under PGII, the USG will work to construct data centers throughout Africa. This week, DFC announced it is using its $300 million loan facility to Africa Data Centers (ADCs), Africa’s largest network of interconnected data facilities, to construct a first-of-its kind data center in Ghana. Africa accounts for less than one percent of total available global data center capacity despite being home to 17 percent of the world’s total population. This investment builds on the Vice President’s recent trip to Ghana and is laying the groundwork for a digital revolution on the continent by increasing access to cloud-based technologies, bringing down the cost of internet, which facilitate greater access to women, and making the continent a more competitive destination for industry.
- DFC, the United States Agency for International Development (USAID), and the U.S. Trade and Development Agency (USTDA) are supporting investments in digital infrastructure and improved access to digital services in Angola and the DRC. Expanding on the DFC’s existing financing for telecom provider Africell in the DRC, Sierra Leone, and the Gambia, U.S. EXIM is continuing its due diligence for a new transaction supporting the expansion of wireless services, and USAID is announcing a digital payments initiative with Africell in Angola. Together, these projects aim to provide fast and reliable internet to individuals and companies across the Lobito Corridor and expand access to mobile money services in rural areas.
- In the DRC, USTDA and USAID are providing early-stage support to advance the expansion of last-mile connectivity with Jenny Internet, fiber network expansion to connect more than 30 towns with Bandwidth and Cloud Services Group, expansion of rural internet connectivity for half a million people with DRC-based internet service provider Global Broadband Solution SARL, and piloting of U.S. firm Parallel Wireless’ Open Radio Access Networks equipment with Vodacom DRC in five villages.
- Project Preparation: USTDA is providing feasibility studies in Kenya to expand and improve healthcare access in partnership with the Kenya Hospital Association; deploy affordable fixed wireless internet across the region; revive Kenya’s natural insecticide industry while supporting small-scale farmers; and develop a 50-megawatt wind and battery storage plant bringing projects that will bring 50 megawatts of new clean energy capacity to the country.
- U.S. EXIM Memorandum of Understanding (MOU) with Tanzania: During the Vice President’s recent trip to the region, U.S. EXIM and the Government of the United Republic of Tanzania announced a MOU to facilitate up to $500 million in U.S. export financing to Tanzania. The MOU will support PGII projects and investments by deepening the commercial relationship between the two countries and exports in a variety of sectors, including infrastructure, transportation, digital technology, climate and energy security, and power generation and distribution projects.
- Clean Energy Supply Chains: The United States facilitated a strategic partnership between Life Zone Metals and TechMet, a leading critical minerals company supported by a DFC equity investment. DFC is the company’s second largest shareholder. During the Vice President’s trip, Life Zone Metals announced a Framework Agreement with the Tanzanian Government to open a new multi-metals processing facility that will use innovative, low-emission technology to process nickel and other critical minerals mined in Tanzania, targeting delivery of battery grade nickel to the global market as soon as 2026. The partnership will also work to identify additional opportunities across the region for critical mineral inputs to the new facility. These efforts are aimed at building and expanding resilient, transparent supply chains for clean energy technology that are based on extensive local engagement, respect for the environment and conservation, and safe, high-integrity labor practices.
Supporting Small Modular Reactor (SMR) progress: PGII supports the development and deployment of full clean energy supply chain solutions at a global scale. Part of those efforts include small modular reactors, which offer a lower initial capital investment, greater scalability, potential for enhanced safety and security, and siting flexibility for locations unable to accommodate more traditional larger reactors. Deployment of advanced SMRs can help drive sustainable and inclusive economic growth. Initial investments include:
- Indonesia: Since launching the Just Energy Transition Partnership (JETP) at the 2022 G20 Summit, the United States announced a joint U.S.-Indonesia partnership to support Indonesia as a first mover in the region on SMR deployment in ASEAN markets, using safe and secure American technology from U.S. company NuScale Power. The pilot includes: (1) an additional $1 million in targeted support from the Department of State to establish technical and regulatory capability to develop an SMR program, and (2) a USTDA $2.4 million SMR feasibility study. DFC has also signed a Letter of Interest to support SMR development in Indonesia. The United States continues to support clean energy supply chains and deployment in Indonesia as part of PGII, including both through the JETP and other on-going engagements.
- Romania: Building on previous U.S. Government support to develop Romania’s first-of-a-kind SMR plant using U.S. firm NuScale Power technology and Fluor Corporation engineering and construction services, the U.S. EXIM issued a Letter of Interest for potential support for up to $99 million to RoPower Nuclear S.A. for design studies – alongside expressions of interest from public and private partners from Japan, Republic of Korea, and United Arab Emirates – together amounting to up to $275 million in early-stage support. These commitments, along with new pledges by Romania, support procurement of long lead materials, completion of the Front-End Engineering and Design (FEED) analysis, provision of project management experts, and regulatory site activities. In addition, the DFC and the U.S. EXIM also issued letters of interest for potential support of up to $1 billion and $3 billion, respectively, for project deployment. When built, the SMR will pave the way for new innovative energy technologies, accelerate the clean energy transition, create thousands of jobs, and strengthen European energy security while upholding the highest standards for nuclear safety, security, and nonproliferation.
Additional notable PGII investments this year include:
Expanding Digital Access in Costa Rica: The United States is working with the Government of Costa Rica on enhancing digital security and connectivity in the country. Initial PGII investments include:
- Cybersecurity assistance: The Department of State will provide approximately $25 million in funding to strengthen Costa Rica’s cyber defense capabilities, including training operations, hardware, software and long-term capacity building.
- Technical Assistance: USTDA is providing technical assistance to the Costa Rican Electricity Institute to develop a monitoring and diagnostic system to enhance the utility’s management of its power generation, transmission, and distribution assets.
- Financing support for 5G expansion: U.S. EXIM has issued a letter of interest to provide financing to support the Costa Rican Electricity Institute’s 5G development.
Ecuador Yilport Port: Two weeks ago, DFC announced that it committed $150 million in financing to Yilport Terminal Operations to expand and modernize the Puerto Bolívar container port in Ecuador. The port sits near Ecuador’s major agricultural zones that produce over 50 percent of the country’s total agricultural output and employ nearly 10 percent of the population. Port expansion and supporting investment in cold storage will enhance Ecuador’s agricultural sector, diversify and strengthen global food security, and sustain and create local jobs. It is also projected to catalyze up to $750 million of foreign direct investment.
Additional Commitments from the Private Sector: Investment in global infrastructure will require more than just the resources of the USG and G7 partners. Through PGII, the United States welcomes public and private sector stakeholders leveraging their expertise and networks to advance complex transactions and strategic joint ventures to drive quality infrastructure investments in low- and middle-income countries.
For example, Global Infrastructure Partners (GIP) highlighted roughly $2.5 billion of investments that were recently announced or completed and align with PGII, advancing high quality infrastructure assets in the energy, transportation, digital, and water and waste sectors, including:
- The construction of over 1 gigawatt of power in Brazil and plans to invest over $5 billion through Atlas Renewable Energy over the next five years to bring online more than 5 gigawatts of new renewable capacity across the region.
- Financial close of the Gudadur 176 MW solar-wind hybrid renewable energy project with Vena Energy in the Indian state of Karnataka, which will generate enough clean energy to power 500,000 households yearly.
- Support for the addition of 10,000 telecom towers for Ascend Telecom in India that will help provide passive telecommunication infrastructure services to all four of India’s mobile network operators.
Additionally, to facilitate investment that is critical to the transition to a globally connected, digitized, and sustainable economy, Citi is deploying innovative financing models such as green bonds and revolving credit facilities. Citi highlighted roughly $1.6 billion of investments that were recently announced or completed and align with PGII, including:
- Supporting, with IDB Invest, a Sustainability-Linked Bond as part of a $450 million financing package to increase digital access and broadband quality in Costa Rica, that will help close the digital divide.
- Launch of Indonesia’s state-owned geothermal developer first green bond worth approximately $400 million, helping to lead in green energy and expand geothermal operations in Indonesia.
- A sustainability-linked revolving credit facility of $125 million that will support Airtel Africa’s operations and investments in the Democratic Republic of Congo, Gabon, Kenya, and Nigeria. To increase social impact, the facility supports digital inclusion and gender diversity investments with a concentration on rural regions and women.
- Construction of a $346 million Wind Farm complex in Brazil, which will provide clean energy and help reduce the carbon footprint of the local aluminum industry.
Official news published at https://www.whitehouse.gov/briefing-room/statements-releases/2023/05/20/fact-sheet-partnership-for-global-infrastructure-and-investment-at-the-g7-summit/