According to a report by OECD, investment in infrastructure of USD6.9 trillion per year is needed to meet global development needs through 2030, with developing countries accounting for the majority of these investments. Infrastructure needs to be designed, built and operated in a sustainable way otherwise it will lock the world into a high emissions trajectory and not be resilient to climate change.
Private sector finance is not flowing in significant size to fund projects. Multilateral development banks (MDBs) are key participants in the sector, but they have limited balance sheets and infrastructure competes with other areas of lending. To overcome this hiatus, FAST-Infra was established by HSBC, IFC (International Finance Corporation), OECD (Organisation for Economic Co-operation and Development), GIF (Global Infrastructure Facility) and CPI (Climate Policy Initiative) as an industry-led, public-private partnership.
FAST-Infra (‘Finance to Accelerate the Sustainable Transition – Infrastructure’) aims to raise the flow of private finance to developing world sustainable infrastructure. Following two global calls in May 2020, 70 to 80 institutions (banks, asset managers, multi-lateral banks, national development banks and NGOs) now participate in FAST-Infra. FAST-Infra aims to unlock private financing through i) Creating a sustainable infrastructure label, and ii) Undertaking targeted financial interventions.
To change the way infrastructure is financed and developed, FAST-Infra needs to be cognisant of infrastructure’s unique features, and current initiatives and programmes that already exist around infrastructure. This report describes some of the unique features of infrastructure (section 2), examines current work around definitions, principles, standards and taxonomies for infrastructure, and discusses lessons from the green bond market (section 3). The report then presents FAST-Infra’s work around a sustainable infrastructure label (section 4), and the four market initiatives being developed by FAST-Infra (section 5).