Mercer and the Inter-American Development Bank identified 30 initiatives as having sustainable infrastructure as a core focus, supporting investment in infrastructure and having scale, or strong potential for scale (through membership or partnerships).
The private sector, specifically institutional investors such as pension funds, investment managers and insurance companies, are potentially a significant source of funding for sustainable infrastructure projects. Despite an environment of record low interest rates and a large pool of global savings, most countries have chronic infrastructure deficits.
The funding gap is reflective of the range of existing barriers facing private-sector financing of sustainable infrastructure, such as:
- Lack of clarity around pipelines of bankable projects
- Lack of standards for sustainable infrastructure, which can increase transition costs
- Uncertainty regarding regulations and policies
“Building a Bridge to Sustainable Infrastructure” considers the influence of the global initiatives focused on addressing these obstacles to private sector investment in sustainable infrastructure. Since 2013, we have seen activities targeted at influencing the investor mindset gaining significant momentum — a critical development given that investor allocations must sharply rise to close the funding gap.
A key finding of the report is that while there are many initiatives working to promote investment in sustainable infrastructure, there is a need for improved collaboration. The report calls for four main steps: