Developing Robust Project Pipelines for Low-Carbon Infrastructure

Chapter 1. Recommendations for developing robust project pipelines in support of long-term climate objectives

Abstract

This chapter provides an integrated overview of the report. In particular, the chapter considers the meaning of project pipelines in the context of investments in support of long‑term climate objectives and different aspects of good project pipeline practices. The chapter explores actions governments can take to translate their climate objectives into investment-ready and bankable projects that are attractive to private sector investors. It also examines results from a series of case studies of emerging practices in developing robust project pipelines, highlighting good practices and learning opportunities. To conclude, the chapter identifies areas for future consideration with respect to establishing robust project pipelines.

1.1. Project pipelines and meeting climate objectives: Context

Pipelines of infrastructure projects – or simply “project pipelines” for the purposes here – are a common concept in infrastructure planning and investment discussions. The term “pipelines” is often used to emphasise specific, upcoming investment opportunities, such as low-carbon infrastructure projects to develop renewable energy over the next decade. As such, project pipelines have become a key focal point in countries’ efforts to implement their climate and development commitments, including the Nationally Determined Contributions (NDCs).

Meeting global climate mitigation objectives requires pipelines of many thousands if not millions of low-carbon infrastructure projects and substantial investment in these projects. The latest global estimates of infrastructure investment needs may differ, but they all point to a financing gap of trillions of dollars per year until at least the year 2030. Public finance on its own will be insufficient. The private sector, therefore, will need to invest, build and support the development, operation and maintenance of those projects in the pipelines, as well as the retrofit or decommissioning of existing infrastructure to align it with mitigation and other sustainability objectives.

Climate mitigation discussions frequently highlight that the investment gap is not a result of a lack of capital.1 Rather, there are not enough identifiable, investment-ready and bankable projects to which private sector investors and project developers can commit time, effort and funding. To address this, governments can take concrete actions to develop robust infrastructure project pipelines, including the provision of effective policy tools and institutional support to the projects that constitute these pipelines.

This report focuses on these concrete actions. Chapter 1 provides an integrated overview of the project pipeline report and is structured around the following questions: what is meant by project pipelines in light of climate objectives? (section 1.2); what concrete actions can governments take to build robust pipelines? (section 1.3); what factors can governments consider when building such pipelines? (section 1.4); and finally, what are emerging good project pipeline practices from case studies and next steps in terms of research considerations and applications of the work? (section 1.5). Section 1.6 outlines the structure of the remainder of the report.

1.1.1. Scope of report

The focus of this report is on low- or zero-carbon, mitigation projects such as renewable electricity generation, energy efficiency, public transportation and electric vehicles. Despite this particular focus, the examples of good practice in this report for building low-carbon project pipelines are potentially applicable to other types of infrastructure projects. At the same time, good practices based on an examination of other types of infrastructure projects (or aspects of infrastructure projects, e.g. resilience) are also relevant to low-carbon infrastructure projects. For example, adding resilience measures in the design of these projects, which is essential to their durability, needs to be considered for low-carbon infrastructure upfront and systematically, although such measures may add to the complexity of structuring projects and increase costs (see Box 2.1 in Chapter 2 for work on resilient infrastructure investment).

The development of project pipelines aligned with long-term climate mitigation objectives will also need to be supportive of such important infrastructure sectors as water supply or flood protection (section 3.7 in Chapter 3 examines in more detail water infrastructure and approaches taken by the Netherlands and the United Kingdom). Lessons from work on water infrastructure can also apply to developing low-carbon infrastructure. In particular, the consideration of long-term strategic pathways, avoiding path dependencies and expensive lock-ins are important to ensure infrastructure investment remains aligned to long-term policy objectives.

More generally, project pipelines for all types of infrastructure need to be supportive of broader sustainability objectives, including those pertaining to biodiversity and other environmental considerations. While low-carbon infrastructure investment predominantly helps countries meet climate mitigation objectives, it also provides many valuable co-benefits beyond reducing emissions like cleaner air or improving energy access. This infrastructure is intimately linked to other sectors; for instance, solar thermal power plants require access to land and water, and will need to be resilient to future changes in environmental conditions. Infrastructure interconnectivities, interlinkages and trade-offs are common and country context dependent, but they merit discussions in countries’ approaches to infrastructure planning and investment to meet long-term climate and development objectives.

1.2. What is meant by project pipelines?

No formal definition of a project pipeline has been agreed for infrastructure projects generally, let alone one which is aligned to meeting long-term climate objectives. However, use of the term project pipelines is widespread in literature on infrastructure investment (see Chapter 2). These discussions often recommend that governments develop and manage project pipelines as a means to improve transparency and offer long-term credibility, predictability and vision.

Based on expert interviews, discussions and review of literature, the predominant view amongst governments and the investment community appears to be that a project pipeline is manifested in the form of a list of projects at an advanced stage in the development process, and that it should be published or communicated publicly in some way. Based on this common view, a low-carbon and climate-aligned project pipeline could be described as “a set of infrastructure projects and assets (accounting for the existing stock of assets), and future assets in early development and construction stages prior to project commissioning, typically presented as a sequence of proposed investment opportunities over time that align with and are supportive of long-term climate and development objectives.”

Despite the absence of a commonly used formal definition, examples of project pipelines from governments, development banks and international initiatives have tended to be fairly consistent with the description of pipelines provided above. These public institutions invariably aim to generate lists of tangible, future assets that will be added to or replace the existing infrastructure stock. Box 1.1 provides some examples of these efforts from the analysis in Chapter 3.

Box 1.1. Selection of government efforts to build project pipelines

Indonesia: To expedite deployment of and clear bureaucratic bottlenecks in infrastructure development, Indonesia established the Committee for Acceleration of Priority Infrastructure Delivery (KPPIP) in 2014. An inter-ministerial body, the KPPIP coordinates infrastructure planning by identifying and prioritising the most beneficial projects. More in section 3.2 in Chapter 3.

Mexico: In 2017, the federal government of Mexico launched the Mexico Projects Hub to provide investors with: 1) an improved visibility of projects sponsored by government entities; 2) a transparent view of project performance; and 3) the ability to compare investment opportunities. Section 3.3/Chapter 3.

Australia: Infrastructure Australia was established in 2008 to advise the government and inter alia create and administer the Infrastructure Priority List (IPL). The IPL comprises projects of national importance and is periodically published on Infrastructure Australia’s website. Projects are sourced and identified through a call for proposals as and when required. Section 3.4/Chapter 3.

Programme for Infrastructure Development in Africa (PIDA): The PIDA is a blueprint for continent-wide infrastructure development in energy, transport, trans-boundary water and telecommunications. Adopted by African heads of states in 2012, the initiative devised a Priority Action Plan and identified 51 cross-border projects to boost regional connectivity and growth. Section 3.5/Chapter 3.

1.3. What can countries do to attract investors and improve the bankability of projects?

Actions to clearly describe and promote project pipelines can greatly enhance investors’ abilities to identify and assess low-carbon infrastructure investment opportunities and encourage actual investment. Investors often look to compare and evaluate investment options across countries and sectors to find suitable opportunities, yet interviews and discussions with experts undertaken for this report suggest that project pipeline approaches, as implemented to date, vary in their use and application. In addition, the lack of clarity in pipeline development practices hampers investors’ efforts to identify such opportunities.

A recent review of government infrastructure planning practices in the Group of 20 countries revealed inconsistencies across countries by sector and by level of detail in the project pipeline (according to infrastructure budgets, plans and targets) (OECD, 2017[1]). The report warned that “[project pipelines] that are inaccessible, incomplete or poorly aligned with long-term climate mitigation and adaptation goals are likely to hinder the flow of infrastructure investment in support of climate goals”.

Governments as a whole, and specific public agencies and institutions, can develop project pipelines to highlight the scale and scope of investment opportunities and communicate the available tools and policies. These public actors strongly influence the development of domestic project pipelines and have a suite of available tools and levers to involve themselves in infrastructure investments, including: funding projects directly from public budgets; leading public-private partnerships; employing risk mitigants like public guarantees; or setting policy incentives on specific sectors or technologies.

Investors (and project developers) want to identify and source investment opportunities that match their needs from the available options which are usually driven by government policies and goals. They have at their disposal numerous channels through which to invest and assess projects, take positions and secure attractive returns. Long-term investors, like pension funds or insurance companies for instance, are typically less interested in one-off investments than in the possibility of an attractive, enduring portfolio of bankable projects with the right risk-return profile and track record of various actors involved.

A recommendation often made to governments is to overcome the dearth in bankable projects by having “better pipelines”. Such advice fails to consider that there is a lack of easily identifiable, bankable projects at the volumes, scales and risk-return profiles that interest investors. The notion of having better pipelines should account for these demands and other country needs, which make the task of developing and delivering better pipelines, and the associated projects, much more complex than the simple phrase (“better pipelines”) would suggest.

Project preparation facilities (PPFs) are one such tool to overcome the lack of government capacity to support the development of economically attractive investment opportunities. PPFs are increasingly offered by public institutions to assist the development of projects to reach investment-ready states (see Annex 2.F in Chapter 2 for more information on PPFs and project bankability). Increasing emphasis is being placed on these facilities, particularly in developing and emerging economies; the costs for global project preparation activities have been estimated at 2.5–10% of total infrastructure investment (GCEC, 2016[2]; Kortekaas, 2015[3]) or up to USD 690 billion per year to meet climate objectives.2

1.4. What effective actions can governments take to develop robust project pipelines?

A key motivation for examining project pipelines more comprehensively is the general lack of knowledge on what constitutes effective approaches and efforts to build project pipelines. Due to the lack of detailed infrastructure investment plans and poor integration of these plans into national policy contexts, it is not always clear what and where project investments are needed, when they should be built, or how to finance them, or if they are sufficient to meet long-term objectives.3 In this context, poorly defined infrastructure planning and lack of policy links could open the door to investments that should not be made and could hinder the flow of infrastructure investment.

There is no one-size-fits-all method to promote and build infrastructure project pipelines. Infrastructure planning efforts vary greatly in scope and scale and very much depend on specific country or regional contexts and their infrastructure “starting points” as discussed in Chapter 2. There is, however, significant potential for governments to share and learn from good practices and approaches taken to build project pipelines, as shown next.

Based on the findings in this report, including a review of existing pipeline practices, a project pipeline aligned to climate objectives can be developed. However, such a pipeline can only be as robust as the (investment-ready and bankable) projects that constitute it and as effective as the institutions that deliver it. In addition, such a pipeline will only be as ambitious as the government objective to which it is linked. In the context of low-carbon project pipelines, ambition can refer to the stringency of mitigation action implied in the NDCs and the way in which the target is expressed (e.g. absolute emissions reduction, renewable energy target and others).

1.4.1. Characterising robust project pipelines

Efforts to develop robust pipelines ultimately need to: promote investment in “good projects”,4 across a variety of sectors, of different scales, at the same time as; accommodate the requirements of investors; and allocate preparatory support to certain projects that may help a country achieve objectives like those in the NDCs, but which are not yet bankable. Literature review and discussions with experts suggest that, with respect to aligning infrastructure to long-term climate objectives, governments can develop robust pipelines of projects if they:

• link policy making to forward-looking objective setting and the programmes and institutions to deliver them, providing overall co-ordination and leadership to champion project pipelines

• focus on strengthening the interface and mechanisms that governments employ to disseminate information and convene actors, offering transparent processes and communicating relevant information on projects and the pipeline with the financing and investment community

• take a holistic, whole-of-government approach to infrastructure planning and investment, feeding lessons back into policy-making processes to bolster the investment-enabling environment and providing funding or institutional support to projects when appropriate

• fast-track suitable infrastructure project investment in a way that brings the carbon and energy intensities of the country’s economy to target levels, prioritising the deployment of “high-value” and strategically important projects and sectors

• foster the development of a diverse set of bankable projects and promote business models suitable for private sector needs, setting strong eligibility criteria to determine which projects should be built and supported and which should not

• increase country resilience to changes in climate and development needs, deploying infrastructure that remains pertinent and relevant over time and tailored to changing external conditions, and avoiding expensive path dependency or lock-in.

1.4.2. Effective efforts to develop robust project pipelines

Building from the preceding analysis, and based on a thorough review of project pipeline efforts across many countries, a number of policy and institutional factors have been identified which are common to effective government efforts to develop robust pipelines. Through a series of case studies, Chapter 3 examines each of the following six factors in the context of a country’s or region’s efforts to build robust project pipelines. Each case study explores the various attributes and important applications of the factor and highlights emerging good practices of its use:

1. Leadership, as it relates to governments as a whole, or specific agencies, championing the development of a robust project pipeline.

2. Transparency, as it relates to having transparent approaches to developing sectoral investment plans, sourcing projects, and using data effectively.

3. Prioritising, as it relates to expediting strategically valuable projects – and shepherding them through development processes.

4. Project support, as it refers to various elements of the investment-enabling environment that affect the risk-return profiles of projects such as policy incentives, the supply of public funds and institutional support.

5. Eligibility criteria to ensure a pipeline of projects is properly aligned to or in support of long-term climate objectives and necessitate strong systems to assess which projects should be promoted and which should not.

6. Dynamic adaptability describes the capacity of governments to keep project pipelines aligned with policy objectives over time, to be pertinent and relevant in the long term, and tailored to changing external conditions.

Each case study focuses on one of the above factors, considers particularly noteworthy pipeline developments in the country or region, and explores the various attributes and important applications of the factor. The case studies also examine the institutions involved in pipeline development, their roles and initial results or successes (if applicable). The following questions are used to frame each case study: what is the project pipeline factor? What is the context in which the factor is employed? Why is the factor important for developing robust project pipelines (in the specific case)? Who is involved and what role did they play to ensure the successful application of the project pipeline factor? What should governments consider before replicating this approach elsewhere?

The case studies are relatively diverse, covering OECD countries in Europe (the Netherlands, the United Kingdom and the European Union as a whole) and emerging countries in Latin America and South East Asia (Colombia and cities in Viet Nam). Likewise, the sectoral coverage includes clean urban transport systems (in cities), large-scale clean energy technologies (countries), network infrastructure (regional) and financing water infrastructure (countries) – as shown in Table 1.1. Each case study also includes additional examples to illustrate how specific pipeline factors (e.g. leadership practices) are applied in other country settings (e.g. in Argentina or Indonesia). These additional examples can be found in boxes towards the end of each case study, and total 16 countries, regions, institutions and initiatives.

Table 1.1. Overview of project pipeline case studies in Chapter 3

Project pipeline factor	Factor description	Geography	Key institution	Sector
Leadership (section 3.2, Chapter 3)	Governments and other agencies championing the development of a robust project pipeline	Colombia	Inter-Sectorial Commission on Climate Change (CICC) and its co-chair, the National Planning Department (DNP)	Economy-wide
Transparency (section 3.3, Chapter 3)	Transparent decision making processes that inform investment	Viet Nam	Climate Investment Funds; sub-national government entities; Asian Development Bank	Clean, sustainable urban transportation
Prioritisation (section 3.4, Chapter 3)	Expediting, optimising strategically valuable projects and shepherding them through development processes	European Union cross-border Projects of Common Interest	European Commission, European Investment Bank; Innovation and Networks Executive Agency	Network infrastructure and low-carbon projects as part of the Investment Plan for Europe
Project Support (section 3.5, Chapter 3)	Provision of public funds and institutional support to overcome investment barriers	United Kingdom	United Kingdom government, agencies and national bodies	Offshore wind
Eligibility criteria throughout* Chapter 3	Setting criteria and conditions to systematically identify, assess and promote eligible projects	x	x	x
Dynamic adaptability (section 3.7, Chapter 3)	Flexibility to adjust infrastructure to changing conditions so that investments remain pertinent over time	Netherlands; United Kingdom	Government and government agencies of the Netherlands; United Kingdom National Infrastructure Commission	Water infrastructure planning and financing**

Notes: * Eligibility criteria does not have its own dedicated case study since it plays an important role in each of the other case studies and smaller examples. See the “Note on project eligibility criteria and their importance for building robust project pipelines” in Chapter 3. ** Lessons from this case study are also extremely relevant to infrastructure beyond the water sector, including energy and transport networks.

1.4.3. Case study summaries and key messages for governments to consider

The case study on leadership looks at Colombia’s Inter-Sectorial Commission on Climate Change, which oversees the delivery of the national climate strategy, with eight ministries, nine regional co-ordination groups and four thematic technical committees. Based on the findings presented in the case study, governments could consider how they might apply the following aspects of Colombia’s leadership factor:

• employ cross-ministerial commissions to lead with authority and delegate where helpful

• provide a single, co-ordinated voice for government action on pipeline development, including the alignment of policies and institutions

• mobilise private sector investors with investment “one-stop shops” to provide information, direction and co-ordination

• avoid cumbersome or complex public institutional arrangements that hinder engagement with project developers and investors.

The case study on transparency looks at how the Climate Investment Funds (CIF) channel donor funds through Multilateral Development Banks (MDBs) to recipient governments and local private sector actors to build clean transport projects in the Vietnamese cities of Hanoi and Ho Chi Minh City. Governments could consider how they might apply the following aspects of the CIF’s transparent approaches:

• provide clarity on investment opportunities where appropriate5 and secure buy-in from and communicate with key actors involved in financing, building or approving infrastructure

• gather and use data and indicators to track and measure progress against policy objectives, assess risks and highlight or identify opportunities

• share experience on how to replicate and scale-up investment successes by engaging public and private actors in the country and elsewhere if appropriate

• standardise infrastructure planning processes, including contract arrangements and legal agreements, to streamline efficient project development.

The case study on prioritisation looks at how the European Union fast-tracks the development of strategically important projects within the bloc of 28 countries. Facing diverse country infrastructure “starting points” across its member countries, the European Union provides institutional access as well as public guarantees and funds to expedite and prioritise investment in low-carbon technologies and network infrastructure. Governments could consider how they might apply the following aspects of the European Union’s prioritisation processes:

• incorporate infrastructure priorities into national (and wider regional) strategic planning, ensuring that such plans are aligned to long-term climate objectives and promote suitable investments

• overcome non-financial barriers by placing prioritisation mechanisms within, rather than separate from or in conflict with, existing regulatory and institutional arrangements

• employ experienced institutions with high capacity and expertise to assess project eligibility, determine strategic value, and bridge investment gaps by allocating funding and other policy tools

• use prioritisation as a means to feed into policy processes and align project pipeline development to changing investment requirements.

The case study on project support looks at how the United Kingdom government kick-started the offshore wind energy market. The United Kingdom supported this market by establishing dedicated public institutions, policy incentives to target investment barriers, and capacity auctions to signal and indicate future opportunities. Based on this case study, governments could consider the following:

• target high-potential and suitable, but as yet under-developed, low-carbon technologies

• mainstream key project support within national long-term climate strategies

• address specific barriers to lower investment hurdle rates

• align existing institutions to help fill knowledge and funding gaps, and disseminate lessons.

Eligibility criteria ensure that a pipeline of projects is properly aligned to or in support of long-term climate objectives. While this factor does not have its own dedicated case study, it plays an important role in every case study. To be effective, such eligibility criteria need to be complemented by strong systems to assess which projects should be promoted and provide clear guidance on how mitigation objectives, like those in the NDCs, should be “translated” into project pipelines. They can provide guidance on, for instance, which projects should be built and supported and which should not (such as to avoid expensive economic stranding of assets).

The case study on dynamic adaptability looks at two countries’ efforts (the Netherlands and the United Kingdom) to align water infrastructure project pipelines with policy objectives and keep them relevant in the long term. This report has placed emphasis on mitigation infrastructure planning and investment. However, the challenges associated with meeting water infrastructure investment needs – the focus of this case study – are extremely valuable beyond the water sector. A number of lessons and emerging good practices from this case study are important for governments to bear in mind while developing national plans and strategies for all infrastructure, including energy, transport, buildings, water and other types. Based on analysis of approaches to finance and plan water infrastructure in the Netherlands and the United Kingdom, governments could consider the following:

• situate project pipelines within, rather than in parallel to, long-term strategic pathways, and medium-term goals like the NDCs, to ensure infrastructure investment remains aligned to long-term policy objectives

• combine long-term strategic infrastructure perspectives with iterative decision making that can be adjusted over time as more information becomes available

• take steps to avoid premature obsolescence of infrastructure, inefficient path dependencies or costly infrastructure retrofits, and consider how short-term actions potentially enable or foreclose future options

• identify actions that promote additional flexibility, and provide opportunities to shift among options depending on evolving trends (economic, climatic, demographic, technological, etc.).

1.5. Next steps: Future considerations on robust project pipelines

The findings from this report aim to stimulate thinking on what it means for governments to build robust project pipelines and what can be done to strengthen them. The findings are based on in-depth reviews of current approaches to build pipelines. The case studies highlight that while governments and public institutions are already taking actions to develop robust pipelines in a range of country settings, these efforts need to be strengthened significantly to meet long-term climate mitigation objectives. The factors given above were specifically chosen to be widely applicable beyond the country or region in question, giving an opportunity for governments to share lessons and bolster their own efforts by learning from the good practices of others.

The case studies (and other examples summarised throughout Chapter 3) offer lessons on what worked and what did not in terms of developing robust project pipelines, as well as pointing to good project pipeline practices. Beyond these examples of good practice, the case studies offer a possible approach for assessing the alignment of pipelines to long-term climate objectives; the pipeline factors in this report may be used as indicators to evaluate and compare government actions to develop robust project pipelines. The following important elements can also be considered:

• Establishing pipeline performance metrics. MDBs have extensive experience measuring and tracking project investment metrics and indicators and comparing results with institutional objectives (see, for instance, Boyd et al. (2017[4])). MDBs typically track indicators on a project-by-project basis, which is administratively burdensome over thousands of projects. A shift to programmatic approaches, as indicated by the Climate Investment Funds, could allow for wider assessments of investment portfolios as a whole.

• Translating long-term objectives into short-term sectoral emissions pathways. The United Kingdom has a comprehensive institutional arrangement whereby carbon budgets are set in five-year periods – aligned to the national 2050 emissions reduction target. The United Kingdom’s independent Committee on Climate Change sets these five-yearly carbon budgets at the sectoral level.

• Accounting for infrastructure interconnectivities, interlinkages and trade-offs. The focus of this report is on low-carbon infrastructure investment that will predominantly help countries meet climate mitigation objectives. However, as noted in the report, these infrastructure projects also provide many valuable co‑benefits beyond reducing emissions like cleaner air or improving energy access. This infrastructure is also intimately linked to other sectors; for instance, solar thermal power plants require access to land and water, and will need to be resilient to future changes in environmental conditions. These issues will be country context dependent but merit discussions in countries’ approaches to infrastructure planning and investment to meet long-term climate and development objectives.

• Quantifying power infrastructure misalignments. One approach to quantify the global project pipeline in the power sector is explored in a forthcoming OECD paper (see also Box 2.2 in Chapter 2). This study compares global electricity generation capacity (under construction and planned over the next five years) against low-carbon scenarios to test for misalignment.

• Benchmarking good infrastructure practices. The World Bank, with others, has assessed and benchmarked regulatory frameworks in 135 countries against internationally recognised good practice in procuring infrastructure under public-private partnerships (World Bank Group, 2018[5]).

In addition to the outstanding research questions discussed in each case study, there is scope for further work in evaluating project pipelines. These areas include: undertaking more in-depth case studies of country infrastructure investment and planning practices and assessing them in the context of the wider investment enabling environment; understanding the significance of government project pipeline practices for specific classes of investors, specifically, but not limited to, project developers and equity investors; and benchmarking project pipeline approaches with a metric-based evaluation framework.

1.6. Structure of the report

The remaining chapters of the report will address the following topics:

• Chapter 2 explores the project pipeline concept in the context of climate objectives to scale-up investment in low-carbon infrastructure. It examines what is meant by project pipelines and related government processes to mobilise finance for low-carbon investment. Finally, it describes a set of effective factors that governments can consider when building robust project pipelines.

• Chapter 3 consists of five case studies, focusing on the role of specific pipeline factors in several approaches taken by governments and public institutions to build robust project pipelines. By looking at elements, attributes and important applications of the specific factor, the case studies provide models that other countries can consider for or adapt to their own pipeline development programmes.

References

[4] Boyd, R. et al. (2017), The Productivity of International Financial Institutions' Energy Interventions, Climate Policy Initiative, San Francisco, https://climatepolicyinitiative.org/wp-content/uploads/2017/03/The-Productivity-of-International-Financial-Institutions%E2%80%99-Energy-Interventions.pdf (accessed on 05 November 2017).

[2] GCEC (2016), The Sustainable Infrastructure Imperative: Financing for Better Growth and Development - The 2016 New Climate Economy Report, Global Commission on the Economy and Climate, http://newclimateeconomy.report/2016/wp-content/uploads/sites/4/2014/08/NCE_2016Report.pdf (accessed on 04 October 2017).

[3] Kortekaas, B. (2015), Infrastructure Finance in the Developing World: Infrastructure Pipeline and Need for Robust Project Preparation, Group of 24 (G24), Washington DC, https://www.g24.org/wp-content/uploads/2016/05/MARGGK-WP04.pdf (accessed on 04 October 2017).

[1] OECD (2017), Investing in Climate, Investing in Growth, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264273528-en.

[6] OECD (2017), OECD Institutional Investors Statistics 2017, OECD Publishing, Paris, http://dx.doi.org/10.1787/instinv-2017-en.

[7] UN Environment (2017), The Emissions Gap Report 2017: Synthesis Report, UN Environment, https://wedocs.unep.org/bitstream/handle/20.500.11822/22070/EGR_2017.pdf?sequen%E2%80%A6 (accessed on 01 November 2017).

[5] World Bank Group (2018), Procuring Infrastructure Public-Private Partnerships: Assessing Government Capability to Prepare, Procure, and Manage PPPs, The World Bank, Washington, DC, http://pubdocs.worldbank.org/en/256451522692645967/PIP3-2018-e-version-040218.pdf (accessed on 20 June 2018).

Notes

← 1.  See section 2.2 in Chapter 2 for more information on the infrastructure investment gap. Institutional investors, like pension funds and insurance companies, manage infrastructure assets far in excess of what is needed. In OECD countries alone they hold up to USD 84 trillion in assets under management, but only directly invest around 1% of this in infrastructure (OECD, 2017[6]).

← 2.  When applied to the OECD estimates of annual global infrastructure needs at USD 6.9 trillion for the 15-year period to 2030 (OECD, 2017[1]).

← 3.  Analysis of the current set of Nationally Determined Contributions suggests that they do not put global emissions on a pathway to meet the temperature goals laid out in the Paris Agreement (UN Environment, 2017[7]). In addition, analysis of the power sector suggests that current building and planned construction of coal capacity over the next five years is incompatible with long-term climate ambitions. Renewable energy deployment, on the contrary, appears to be going in the right direction but needs to accelerate (see Box 2.2 in Chapter 2).

← 4.  Governments will also need to have the foresight to look to the development of “better projects” in the future: those that are more suitable to the longer term climate objectives, resilient to future changes in environmental conditions, without risk of stranding assets, and also bankable by nature.

← 5.  For instance, in line with confidentiality concerns; private sector investors and project developers do not typically “publish” full data due to the confidential nature of project-level information and financial details – see the case study for more information (section 3.3 in Chapter 3).