At the 2023 G7 Summit in Hiroshima, Japan, G7 leaders met with private sector executives, including Citi CEO Jane Fraser, to discuss how to further mobilize infrastructure investment in low- and middle-income countries as part of the Partnership for Global Infrastructure and Investment (PGII).
Jane Fraser’s remarks as delivered are below.
Prime Minister Kishida, President Biden, President von der Leyen, Your Excellencies, and distinguished guests, good afternoon. Thank you for inviting Citi to participate in this discussion about scaling PGII’s impact.
Citi brings the unique perspective of doing business in nearly 160 countries around the world. That includes decades of experience working on the ground in many emerging markets, supporting investment and driving economic growth, in line with the objectives of PGII. We understand the challenges and opportunities that come with addressing the massive infrastructure needs of the developing world, and the realities of what it actually takes to get things done on the ground.
I’m delighted to highlight our work financing a $125 million revolving credit facility to support female entrepreneurs in Nigeria, Kenya, Gabon and the DRC. Our efforts extend around the world, including a $450 million sustainability-linked bond that will help increase digital access in Costa Rica and the financing for a $350 million wind farm in northeast Brazil. We’re also helping finance a $400 million green bond to support geothermal power in Indonesia.
We are proud of this work. But we also know that much more needs to be done. We certainly welcome the efforts underway to reform Multilateral Development Banks (MDB). To be clear, however, more MDB financing used the same way will not get us where we need to be. Instead, it’s about using MDB financing better to catalyze private capital.
There are a couple of different ways and ideas we can deploy in the near term:
First, is incentivizing private capital. We should reduce the hurdles that frequently restrict the ability to bring private capital to the table by aligning the global interpretation of Basel capital rules and country regulations, and by lowering the capital requirements associated with MDB risk mitigation. This can enable more private capital into non-investment grade assets, for example, and what is currently a trickle of investment can become a sustainable material flow.
The second is about sharing expertise. Led by the World Bank, let’s bring together technical experts from both sides — from the development banks and financial institutions — to create more modern financial structures. Financial institutions, such as Citi, have capital markets and structuring expertise that MDBs simply don’t have, whilst MDBs have the geopolitical knowledge and project proficiency, including decades of performance data that could really reduce down risk and pricing, which we lack. Bringing this together would be very valuable.
It would be remiss of me if I didn’t ask for actions to not only mobilize the capital but to accelerate getting projects actually online — from permitting to the mundane, but very important activities such as streamlining documentation and standardizing contracts. It would make an enormous difference.
I am confident if we have stronger collaboration, we can create enduring and sustainable flows of capital from the private sector, raising the economic futures of developing countries around the world.