The Global Infrastructure Hub (GIH) is the G20’s infrastructure entity. It supports sustainable, resilient and inclusive infrastructure through action-oriented programmes. Based in Sydney, Australia and Toronto, Canada the GIH provides data, insights and best practices and works towards creating a common language on infrastructure. The GIH collaborates with a range of different strategic partners like Multilateral Development Banks to maximise its impact.
Cross-border infrastructure projects are complex : traversing the territory of two or more countries, makes projects difficult to plan, manage, finance and execute. The jurisdictions involved may have significantly different policy, legal and regulatory frameworks as well as different financial models and operational rules and standards that must be harmonised. Cross-border projects are also more extensive in scale, engage a greater number of stakeholders than national projects, and carry higher transaction costs and risks.
With this guide, the GIH aimed to assist infrastructure policymakers and practitioners in managing the considerations that arise in projects that cross national boundaries. The guide presents global practices to help answer the question of how to develop, manage, and implement cross-border infrastructure.
The GIH came up with 5 key considerations when implementing a cross-border project:
- Adopting policy, planning and prioritisation frameworks for efficient regional cooperation
- Identify national and regional goals and objectives to transform them into political vision;
- Prioritise projects that can help achieve this vision;
- Ensure the institutional capacity required to deliver the projects (required resources, coordinated planning etc.).
- Creating legal, regulatory and stakeholder alignment to enable cross-border delivery
- Use effectively intergovernmental agreements to align governments on objectives;
- Involve the right stakeholders at the right time (relevant industries, communities, government agencies and jurisdictions etc.);
- Assess mutual costs and benefits to forecast the project’s viability;
- Haronize rules and regulations to ensure equity (tariffs, customs, technical standards, safety standards etc.).
- Optimising the financial structure to properly allocate risks and benefits
- Identify risks and barriers in financing cross border projects (currency risk, geopolitical risk, change in domestic policy etc.);
- Choose a proper financial structure that will reflect the national policy parameters, provide value for money, mitigate the risks, determine financing requirements etc.
- Establishing effective governance structures
- Establish a collaboration format that corresponds to the stakeholder community;
- Make governance decisions in agreement with all stakeholders, irrespective of size, power and interests;
- At government level, the multilateral governance body should have equal representation of governments involved to ensure that the decisions made are mutually agreeable;
- Ensure adequate management capacities and competencies within the governance bodies (external help where required and capacity building and training programs).
- Managing efficiently throughout the project lifecycle
- Ensure flexibility in the governance structure to adapt to changing circumstances (governments mandates, intitutional reforms);
- Resolve operational risks and contractual disputes;
- Achieve and maintain social licence of the project and entities involved (opportunities for local communities, public consultation).
To read the full report and the case studies, go to GIH platform or click here.