Sustainable Infrastructure
Ten actions to drive forward sustainable infrastructure investment were endorsed by the G20 in the new G20/GI Hub Framework on Scaling Up Sustainable Infrastructure Investment.
Infrastructure definitions and classifications (taxonomies) have a huge impact on how much gets invested in infrastructure and what types of infrastructure get this investment. This week the G20 and GI Hub held a roundtable on infrastructure taxonomies to explore how they can be used to help close the infrastructure investment gap.
‘Revitalising infrastructure investment’ was a focus at the recent G20 FMCBG meeting, and GI Hub-led work on sustainable investment and public infrastructure spending was endorsed.
Infrastructure Monitor is the GI Hub's annual flagship report on the state of investment in infrastructure. The 2022 report examines global private investment in infrastructure projects, infrastructure investment performance, availability of private capital and the role of MDBs in private investment in infrastructure.
The Indonesian G20 Presidency: Global Briefing Report Review
The Global Briefing Report Review looks at the outcomes and discussions of the Indonesian G20 Presidency and provides an in-depth review of the Summit that gives readers insights into how it will influence global affairs in the future.
The Global Briefing Report Review looks at the outcomes and discussions of the Indonesian G20 Presidency and provides an in-depth review of the Summit that gives readers insights into how it will influence global affairs in the future.
Reports and reference guides
A new framework endorsed by the G20 sets out ten actions to drive the private sector to scale up its investments in sustainable infrastructure.
Reports and reference guides
The IMF's C-PIMA framework helps governments identify potential improvements in public investment institutions and processes to build low-carbon and climate-resilient infrastructure.
Source: IMF
Reports and reference guides
The World Bank Group has launched a series of Country Climate and Development Reports (CCDRs) that discuss development paths countries can take to reduce greenhouse gas emissions and boost climate adaptation.
Source: World Bank
Data insights
The GI Hub’s InfraCompass found that 38% of countries do not publish infrastructure plans and 28% do not publish pipelines of projects.
Data insights
Post–COVID-19, USD3.2 trillion of additional infrastructure investment was announced. More than half is being directed to long-term priorities like the low-carbon transition, affordability, digitalisation, and inclusive mobility.
Data insights
As of March 2022, governments worldwide had earmarked more than USD710 billion in sustainable recovery measures, according to International Energy Agency estimates. This is the largest ever clean energy recovery effort, 40% more than was spent after the global financial crisis.
Source: IEA
Forums
The 2022 G20 Infrastructure Investors’ Dialogue highlighted that investors need clarity on countries’ transition plans for infrastructure, to enable them to better align and evolve their investments.
Source: Indonesian G20 Presidency
Forums
At least 10% of global GHG emissions can be addressed through circular infrastructure, which will require systemic change and innovation at a global scale. A G20 workshop explored circularity in infrastructure.
Reports and reference guides
The World Bank’s Global Infrastructure Facility (GIF) created a stocktake report for the G20 which examines the proliferation and harmonisation of climate, sustainability and ESG standards for infrastructure.
Source: World Bank Group
Reports and reference guides
The G20 Sustainable Finance Working Group (SFWG) has created a Synthesis Report that examines the current practices and challenges in aligning investment to sustainability goals and overcoming information challenges.
Reports and reference guides
There are no agreed taxonomies, metrics or indicators detailing ESG impacts and risks relevant to infrastructure. EDHECinfra examined this in a recent report.
Source: EDHECInfra
Data insights
Global private investment in infrastructure was ‘greener’ than ever in 2021, reaching a share of 60% of total private investment in infrastructure. Encouragingly, this increase in green investment was mostly in sectors beyond renewables, for which investment has been minimal in previous years.
Sustainable infrstructure indicators and standards
The Compendium of Quality Infrastructure Investment (QII) Indicators presents indicators to support the G20 QII Principles, which align with the SDGs.
Sustainable infrstructure indicators and standards
In a recent report created for the G20, the OECD examined 21 sustainable infrastructure definitions, standards and tools to determine the extent of convergence in ESG factors across these various approaches.
Source: OECD
Sustainable infrstructure indicators and standards
The FAST-Infra Sustainable Infrastructure Label is a globally applicable label for projects demonstrating significant positive sustainability performance.
Source: FAST-Infra
Sustainable infrstructure indicators and standards
The MDB Infrastructure Cooperation Platform (ICP) presents 16 key sustainable infrastructure indicators that provide common denominators of sustainable infrastructure frameworks MDB initiatives.
Source: IADB
Databases
GEMs enables member organisations to calibrate and benchmark internal models, to better estimate provisioning and set capital requirements more accurately. GEMs serves as an objective and reliable platform to discuss regulatory compliance, capital adequacy and risk management practices with auditors, rating agencies and supervisors.
Source: GEMs
Databases
The GI Hub’s Quality Infrastructure Investment (QII) Database includes case studies and examples of projects or programs that demonstrate QII or exemplify good practice.
Reports and reference guides
Banking regulations play a crucial role in greenfield infrastructure financing. Recent Basel III reforms that curtail this participation can have significant effects on financing sustainable infrastructure.
Reports and reference guides
Common features of regulatory frameworks for climate change, environmental and social sustainability are summarised in a stocktake report produced for the G20 by the World Bank’s Global Infrastructure Facility (GIF).
Source: World Bank Group
Reports and reference guides
PPP policies and legislation can ensure that climate change impact analysis is undertaken during project development. The World Bank's Climate-Smart PPP Legal and Regulatory Framework provided references to regulatory and policy instruments from around the globe.
Reports and reference guides
Institutional investors currently face some regulatory disincentives in investing in infrastructure. ‘Right-size’ capital requirements for MDBs and other investors in infrastructure are needed, given the default experience of infrastructure assets.
Source: Global Financial Governance
Forums
The 2022 G20 Infrastructure Investors’ Dialogue highlighted the need for clear and transparent regulation as a condition for private sector infrastructure investment.
Source: Indonesian G20 Presidency
Forums
The GI Hub’s Coalition on Regulatory Treatment of Infrastructure as an Asset Class is shaping proposals to the G20 and standard-setting bodies to create a more conducive regulatory environment for infrastructure investment.
Forums
The GI Hub hosted an expert discussion of decisions that will drive strong investment outcomes as well as positive global impacts.
Reports and reference guides
A key challenge to mobilising private capital for sustainable infrastructure is the lack of bankable investment opportunities. G20 members and the donor community should scale-up funding towards PPFs, according to a recent World Bank and Global Infrastructure Facility (GIF) report.
Source: World Bank Group
Reports and reference guides
Risk allocation is at the centre of every PPP transaction. The GI Hub PPP Risk Allocation Tool is a reference for appropriate allocation of project risks in PPP projects. It details 16 key risk categories across 18 project types.
Reports and reference guides
The World Bank's Guide to Guidance identifies the "best of breed" guidance currently available from PPP guidelines worldwide and selected professional publications.
Source: Word Bank Group
Data insights
The GI Hub’s Infrastructure Monitor report highlights that PPFs are mostly led by multilateral development banks (MDBs) (53%) and international organisations (27%) providing support to emerging markets and developing economies (EMDEs).
Data insights
To invest USD3 trillion annually by 2050 (the estimated amount of investment needed to close the infrastructure gap), at least USD30 billion would be needed annually for project preparation, according to a recent World Bank and Global Infrastructure Facility (GIF) report.
Source: World Bank Group
Data insights
Project preparation costs have increased substantially over the past two decades, and can now average up to 10% of the project cost.
Data insights
On average, project preparation takes six years, but it can take up to 14 years if projects are not properly planned.
Forums
The Africa Infrastructure Fellowship Program is a capacity-building initiative that equips African civil servants to effectively lead infrastructure project procurement and financing.
Forums
The ILN Sustainable Infrastructure Fellowship Program equips senior leaders in emerging markets with the skills to increase private investment in sustainable infrastructure.
Reports and reference guides
Blended finance has the potential to propel infrastructure investment forward. Our CEO Marie Lam-Frendo and Advisor Denis Crevier recently examined what global organisations and initiatives are doing to make catalytic capital available.
Reports and reference guides
The GI Hub identified 26 levers governments can apply to improve bankability and attract more private capital to infrastructure. View the funding and financing framework, including case studies of effective practice using revenue, risk management, and finance levers.
Reports and reference guides
The World Bank’s Global Infrastructure Facility reports on the strategic use of innovative finance solutions—employing mechanisms such as blended finance, asset recycling, securitised programs, and the use of local currency financing—to help de-risk investment opportunities.
Source: World Bank Group
Reports and reference guides
Blended finance is one critically important approach to mobilise new sources of capital for the SDGs. Around half the funding required to achieve the SDGs in developing countries can be in the form of investment.
Source: Convergence
Data insights
The total market value of infrastructure assets under management (AUM) grew rapidly from USD170bn in 2010 to USD1tn in 2021. This indicates that private investors continue to increase allocations of capital to infrastructure assets.
Data insights
In 2021, 20% of private investment in infrastructure projects was financed either by a green bond (10%) or a green loan (11%). This sustainable financing share is more than double the average sustainable financing share (9%) in the five years before 2021.
Data insights
MDBs have made significant climate finance commitments. As of 2020, overall commitments of the five major MDBs reached USD32 billion.
Forums
The New Deals webinar series by the GI Hub and IFC shares practical solutions and funding innovations used to create bankable projects while attracting private investment, de-risking the investment, and achieving SDGs.
Forums
The 2022 G20 Infrastructure Investors’ Dialogue highlighted the private investors’ commitment to developing and financing sustainable infrastructure. This reinforced the strong demand from international investors for more bankable infrastructure investment opportunities.
Source: Indonesian G20 Presidency
Reports and reference guides
The G20 can take a leading role in helping scale up InfraTech investment through enablement, by acting as a facilitator of a global InfraTech ecosystem. Eight effective approaches were highlighted as opportunity areas for the G20 moving forward.
Reports and reference guides
Better awareness around InfraTech use cases and benefits can spur its adoption. Nearly 100 case studies across a wide range of sectors and countries were analysed to derive effective approaches to scaling up InfraTech.
Data insights
InfraTech can improve the efficiency of infrastructure investment, such as by reducing cost overruns. A study by the Inter-American Development Bank (IADB) states that 0.65% GDP (around 22% of the total investment in infrastructure) could be saved by minimising cost overruns from infrastructure.
Source: IADB
Data insights
The World Bank’s report on InfraTech Value Drivers indicated that new analytical capabilities in portfolio planning could deliver 10–20% in savings on capital expenditure.
Source: World Bank
Data insights
The McKinsey Global Institute estimates that technology can increase construction productivity by 15% globally. Better practices can help firms unlock digital’s value across their enterprises.
Source: McKinsey Global Institute
Forums
Our podcast series Innovating Infrastructure explores the top 10 solutions for more resilient infrastructure from our 2021 InfraChallenge innovation competition.
Forums
Hear from an expert panel on what makes InfraTech investible and how to de-risk technology and mobilise more investment, specifically in the context of the climate transition.
