Investors around the world are seeking opportunities to invest in large-scale, long-term sustainable investments. The World Bank Group's 2012-2015 Infrastructure Strategy Update notes that: "Without an infrastructure that supports green and inclusive growth, countries will not only find it harder to meet unmet basic needs, they will struggle to improve competitiveness."
Despite the local needs and the global interest in investing in sustainable infrastructure, there are still major gaps between the types of financial mechanisms available to investors and the types of projects being developed.[ Read More ]
Projects, especially sustainable projects, are often proposed at scales that are too small to attract significant investment and they face potential political, social and technological investment risks and uncertainties associated with unfamiliar development processes and system performance.
This section captures a cross-section of the types of resources that can be used to finance, in whole or in part, specific sustainable infrastructure systems or services. For example, the Philadelphia Stormwater Credit Program and BV Rio are two different examples of mechanisms that can be accessed directly by property owners to finance water management systems or projects on their properties.
Each example includes cross-references to related policies, financial mechanisms and projects to highlight what specific investments can flow from a particular program. For example, Stormwater Utility Rate Structuring is a policy approach that can transform a traditional urban pollutant (stormwater runoff) into a marketable commodity. The Philadelphia Stormwater Credit Program is a specific finance mechanism designed to drive the market through laws requiring property owners to reduce their stormwater runoff or purchase offset "credits." Finally, the Big Green Block project is an example of an investment that generates stormwater "credits" in Philadelphia that could be available for purchase on the market.
Similarly, Special Districts and Areas of Interest are policy instruments that can create targeted services for specific, legally-defined geographic areas, often through zoning changes. In Brazil, these changes have enabled the development of finance mechanisms, such as CEPACs (Certificates of Potential Additional Construction), where public authorities auction off tradable certificates that expand developers' building rights. For the Porto Maravilha: Urban Waterfront Revitalization project, the sale of CEPACs has generated upfront financing for the municipal corporation managing the Area of Special Interest, allowing it to invest in the types of infrastructure and services that provide the backbone of any successful neighborhood.
Featured Finance CardsPublic-Private Partnerships for Urban Sustainability
A public-private partnership is an agreement between a public agency (federal, state, or local) and a private-sector entity that uses the specific skills and assets of each sector for the delivery of a service or facility used by the general public.Stormwater Credit Program
The Philadelphia Stormwater Regulations provide the legal measures for implementing stormwater billing. The Gross Area and Impervious Area of a property are used to determine the Stormwater Management Services (SWMS) Charge.CEPACs
Certificates of Potential Additional Construction (CEPACs) are a method of leveraging private dollars to finance public investment in neighborhood revitalization through a process of rezoning and construction permit auctions.