Infrastructure investment is expanding rapidly but remains misaligned with sustainability and climate goals. Across both regions, infrastructure pipelines continue to prioritise carbon-intensive assets, particularly in energy and transport. Coal and gas investments remain significant, with approximately 31 GW of new coal capacity under development across the six SIPA countries, and road-based transport dominates future investment plans. This misalignment risks locking countries into high-emission pathways and exposing them to stranded assets and climate risks.
Strategic frameworks are strengthening, but implementation gaps persist. All six countries have adopted national development and climate strategies, including Nationally Determined Contributions (NDCs) and, in several cases, long-term low-emission development strategies (LT-LEDS). However, these commitments are not yet systematically translated into investment decisions. Fragmented institutional responsibilities, insufficient co-ordination and limited integration across planning, budgeting and sectoral policies hinder effective implementation.
Project pipelines are constrained by inadequate preparation and evaluation practices. A shortage of well-prepared, bankable sustainable infrastructure projects remains a major bottleneck. Traditional project appraisal often excludes environmental and social impacts, leading to underinvestment in projects with strong long-term benefits. SIPA analysis shows that incorporating these factors through integrated approaches can improve the economic case for sustainable investments. In SIPA’s experience, integrated cost-benefit analysis can increase the benefit-cost ratio of sustainable projects by up to tenfold by accounting for benefits overlooked by traditional methodologies.
Financial systems are being developed but are not yet fully mobilising funds for sustainable investment. While progress has been made in strengthening green finance frameworks, the use of financial markets remain underdeveloped in several countries, particularly in Central Asia. Limited non-bank participation in the financial sector, only nascent uses of risk-sharing instruments and persistent fossil fuel subsidies constrain the flow of capital toward sustainable infrastructure.
Climate resilience and nature-based solutions are insufficiently integrated. Climate-related phenomena, including floods, droughts, heatwaves and sea-level rise, are already affecting infrastructure systems across both regions. However, resilience is not consistently embedded in planning, appraisal or financing processes. Nature-based solutions, which can provide cost-effective resilience and environmental co-benefits, remain underutilised despite growing evidence of their effectiveness.
Institutional capacity and co-ordination are critical cross-cutting constraints. Across all pillars, limited technical capacity and fragmented governance structures hinder effective planning and implementation. Weak co-ordination between ministries and across levels of government reduces the effectiveness of policies and delays the development of sustainable project pipelines.
