Bankers and governments around the world are lining up to jump on board plans to create a global facility to help channel finance into projects which will boost growth and jobs in developing countries.

In total, 26 government and finance sector organisations signed on to the plan at its launch last week, including Citibank, Standard Chartered Bank, AXA and Australia’s Macquarie Bank.

The governments of Australia, Canada, Singapore and Japan joined in, as did the European Investment Bank, the Asian Development Bank, and the Japan Bank for International Corporation and the World Bank.

Conceived by the World Bank and strongly pushed by Australia’s Treasurer Joe Hockey, the new facility – the idea for which is strongly supported by local infrastructure experts in Australia – would not raise funds in and of itself but would instead connect governments with private investors to help finance new construction.

In addition, its technical and advisory partners will provide support to train and help government officials to manage to the bidding process for public private partnerships and ensure projects are properly structured and ‘bankable’ prior to being brought to market.

In a statement, World Bank Group President Kim Jin Yong welcomed the broad range of institutional investors signing up to the new facility, saying an additional $US1 trillion to $US1.5 trillion of annual investment will be required from now until 2020 to meet infrastructure demand from industry and new households in developing economies, the bulk of which will go toward electricity, water and transport.

Kim said the key challenge was not a lack of money to invest but rather that of ensuring projects were planned and structured in a way which was suitable for private financing.

“We have several trillions of dollars in assets represented today looking for long-term, sustainable and stable investments,” Kim said, adding that the new facility would help deliver complex public private projects that no single institution could address on its own. “In leveraging those resources, our partnership offers great promise for tackling the massive infrastructure deficit in developing economies and emerging markets, which is one of the fundamental bottlenecks to reducing poverty and boosting shared prosperity.”

“The real challenge is not a matter of money but a lack of bankable projects – a sufficient supply of commercially viable and sustainable infrastructure investments.”

In addition to Macquarie, media reports suggest that other institutions around Australia are enthusiastic about the idea, with ANZ Bank chief executive Mike Smith being quoted in The Australian as saying the idea was “good for every country” and adding that it would allow “pretty scarce funding to be put on priority projects.”

Expected to open later this year, the new facility will initially operate in a pilot phase to test new models for public-private infrastructure projects in low and middle income countries.

Work has started on a pipeline selection process and the GIF is talking to partners and beneficiary countries about several projects which it says have the potential to transform developing economies and lift job creation and opportunities for the world’s poor.