Abu Dhabi and French agency submit proposals to boost infrastructure financing

The recommendations aim to respond to the social, economic and climate emergencies in emerging and developing countries

The Abu Dhabi Investment Authority head office building in Abu Dhabi. Stephen Lock / The National

A working group, co-chaired by Abu Dhabi Investment Authority and French Development Agency, has submitted its five recommendations to increase investment in sustainable infrastructure in emerging markets.

The proposals were submitted at the “Summit for a New Global Financial Pact” in Paris on Thursday.

The two-day summit is hosting more than 300 participants.

It will include interactions and discussions at the highest level between heads of state and government, leaders of international organisations, and representatives of civil society, foundations, funds and the private sector.

The proposals aim to respond to the social, economic and climate emergencies in emerging and developing countries, Adia said in a statement.

The working group, comprising of 60 public and private sector financial institutions, has been looking at ways to strengthen investment in sustainable infrastructure for more than three months, particularly in emerging and developing countries, it added.

“Sustainable Infrastructure is crucial to achieving the sustainable development goals, especially in emerging and developing countries,” Khadem AlRemeithi, executive director of the infrastructure department at Adia, said.

“Bridging the trillion-dollar investment deficit in sustainable infrastructure requires the mobilisation of all public and private financing sources, at scale. Over the past months, our in-depth discussions between public and private actors have shown that existing solutions, based on successful experience, can be replicated, adapted and scaled up,” Mr AlRemeithi said.

The working group’s five key recommendations include the need for the development of long-term investment plans and clear, transparent and balanced contractual frameworks that balance the risks taken and the return on investment; the need to strengthen local capacities to prepare and structure infrastructure projects adapted to urgent needs and able to withstand the test of time and natural disasters; development of regional infrastructure projects (such as interconnected electricity networks, transport systems and water management).

Fourthly, the working group recommended the strengthening of data and risk-sharing tools and called for continued public funding for financially unprofitable projects with a high social or climate impact.

Lastly, the group concluded it should continue the dialogue, at the Finance in Common Summit, in Cartagena from September 4-6, 2023, and at Cop28, in the United Arab Emirates from November 30- December 12, 2023.

Access to drinking water, electricity, transport, education and healthcare continues to be limited in parts of the emerging and developing world. The financial resources required to fill the infrastructure deficit is immense, estimated at more than $6 trillion per year, an Adia statement said.

Nearly 80 per cent of greenhouse gas emissions are related to energy, transport, construction or water and sanitation infrastructure, underlining the importance of financing infrastructure that responds not only to social but also economic and climate challenges, it added.

“We need to invest massively in quality infrastructure that is inclusive, resilient and meets the urgent and long-term needs of people and the planet, to achieve the SDGs,” Remy Rioux, director general of the French Development Agency, said.

“This massive investment requires mobilising the joint forces of public development banks and private investors: the work of the working group … was a strong moment of exchange and dialogue between public and private, national, regional and international actors … we will continue it,” added Mr Rioux, who is also the president of International Development Finance Club, a network of 27 national, regional and bilateral development banks.