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Post at: Aug 29 2022

G7 Partnership for Global Infrastructure and Investment (PGII)

Why in news?

  • On June 27 ,2022 the G7 countries, who  met at  Leaders’ Summit in Germany, have officially launched the Partnership for Global Infrastructure and Investment (PGII).
  • It is a joint initiative to fund infrastructure projects in developing countries. 
  • The project   is being seen as the bloc’s counter to China’s ‘Belt and Road Initiative.
  • Group of Seven leaders pledged to raise $600 billion in private and public funds over five years to finance needed infrastructure in developing countries.

About the Project 

  • The infrastructure plan was first announced in June 2021 during last year’s G7 Summit in the UK.
  • Back then, US President Joe Biden had called it the Build Back Better World (B3W) framework.
  • However, it did not register much progress and details regarding the plan’s time period or funding source were unclear.
  • The stated purpose of both the PGII is to help secure funding for countries to build critical infrastructure such as roads, ports, bridges, communication setups, etc. to enhance global trade and cooperation.
  • However, the G7 say their initiative is meant to be transparent, focused on building climate change-resilient infrastructure, and help in achieving objectives of gender equality and health infrastructure development.
  • US president said “This isn't aid or charity. It's an investment that will deliver returns for everyone,”
  • He added that it would allow countries to "See the concrete benefits of partnering with Democracies."

Funding of the project 

  • United States would mobilize $200 billion in grants, federal funds and private investment over five years .
  • It will support projects in low- and middle-income countries that help tackle climate change as well as improve global health, gender equity and digital infrastructure.
  • Europe will mobilize 300 billion euros ($317.28 billion) for the initiative over the same period to build up a sustainable alternative to China's Belt and Road Initiative scheme.
  • Italy, Canada and Japan also spoke about their plans, some of which have already been announced separately.

Areas of Investment 

  • The projects to be funded under the G7 initiative fall into four broad categories — 
    • Clean energy,
    • Health systems,
    • Information and communications technology, 
    • Gender equality.

G7 flagship/deliverable  projects

  • A commitment of $2 billion for a solar project in Angola has been pledged.
  • Second, $600 million for a US company to build a submarine telecommunications cable that will connect Singapore to France through Egypt and the Horn of Africa, delivering high-speed internet.
  • Up to $50 million from the US to the World Bank's Childcare Incentive Fund has been announced.
  • a $3.3 million fund for technical assistance from the US to the Institut Pasteur de Dakar in Senegal for the development of an industrial-scale, multi-vaccine manufacturing facility in the country. 

Investment in India

  • In India, the US International Development Finance Corporation, the development bank of the country, will invest up to $30 million in the Omnivore Agritech and Climate Sustainability Fund

China’s response

  • Chinese foreign ministry responded as
  • “China continues to welcome all initiatives to promote global infrastructure development.We believe that there is no question that various related initiatives will replace each other.
  • We are opposed to pushing forward geopolitical calculations under the pretext of infrastructure construction or smearing the Belt and Road Initiative.” 

What is China’s Belt and Road Initiative ( BRI)?

  • China began the Belt and Road Initiative in 2013 under its President Xi Jinping.
  • It aims to revive the ancient trade routes crossing to and from China–from Rome in Europe to East Asia.
  • Under this, the Chinese government helped in providing loans for infrastructure projects to various countries.
  • In many cases, Chinese companies were awarded contracts for carrying out the work. This helped China mark its footprints at a global level.
  • However, China was criticised in the West and by some other countries for providing unsustainable debts to countries that will be unable to repay them.
  • According to a 2019 World Bank report, among the 43 corridor economies for which detailed data was available, 12 could face a situation where debts were not sustainable, 
  • It could lead to public assets being handed over to foreign contractors or China itself.
  • In fact, as per a report last year,  US-based research lab AidData,  China has trapped 165 countries with debts of at least $385 billion for BRI projects.

India’s stand on BRI

  • India opposed the BRI as it included the China-Pakistan Economic Corridor.
  • It connected Kashgar in China with the Gwadar port in Pakistan via Pakistan-occupied Kashmir.
  • India’s External Affairs Minister S Jaishankar said in 2021: “Any serious connectivity initiative must be transparent and conform to the most basic principle of respect for sovereignty and territorial integrity.”


  • Partnership for Global Infrastructure and Investment (PGII) will aim to complement infrastructure development need in developing economies and thus counter the Chines influence over them. But timely delivery and funding of the projects will be key in this regard.

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