Sustainable Infrastructure
  • Overview
  • Guayaquil
  • Bursa

Sustainable Infrastructure

Overview

Quality infrastructure plays a critical role in achieving sustainable development. It contributes to economic growth and competiveness, fosters a diversified and deep productive sector, provides greater access to fundamental services that improve quality of life and promote social equality, and bolsters national and regional integration. However, the considerable demand for infrastructure investment cannot be satisfied by the public sector alone. The OECD “Infrastructure to 2030” report concluded that global infrastructure investment needs across the land transport, telecommunications, electricity and water and sanitation sectors could amount to an estimated USD 53 trillion through 2030. The annual investment requirement would equal roughly 2.5% of world GDP.

Private sector funding can complement government efforts to narrow the prevailing infrastructure development gap in many emerging countries; just a small portion of private sector resources could significantly reduce current investment deficits. In this context, development banks play an important role in correcting market inefficiencies by providing specialized instruments and catalytic mechanisms for leveraging public and private funds.

The IDFC´s Sustainable Infrastructure WorkingGroup will examine global infrastructure investment flows and barriers using information garnered through a financial mapping exercise, and develop a position paper on leveraging public and private funds for sustainable infrastructure projects, highlighting lessons learned and best practices from IDFC members. The Working Group also plans to investigate prospective business opportunities and new international funding channels, and explore potential and innovative tools for infrastructure planning.

Contact

Contact

IDFC Secretariat
 
KfW, Palmengartenstraße 5-9, 60325 Frankfurt, Germany

Case Study Sustainable Infrastructure:

Comprehensive Urban Development in Guayaquil

The “Ciudades con Futuro” (Cities of Promise) Program, launched by CAF –Development Bank of Latin America– is a high social impact initiative aimed at improving the quality of life of urban populations through integrated multi-sectoral interventions. The program has four major components: 1) inclusive urban development, 2) productive transformation, 3) environmental sustainability, and 4) institutional strengthening and public safety. The first phase of the program will cover five major Latin American cities, including Guayaquil, Quito, Panamá, Fortaleza and Lima.

Comprehensive Urban Development in Guayaquil

In the case of Guayaquil, from 1996 to 2012 CAF provided almost USD 515 million in funding for the completion of a variety of critical transport and water and sanitation projects that form part of the city´s new urban development model. Another USD 297 million in financing originated from the municipal government and private sector entities, for a total of USD 813 million to date. One of the major transport projects included the modernization of the Metrovía rapid-transit system, a deal structured to transfer costs and operational risks to the private sector through a competitive concession process, and based on competitive user fares without government subsidization. CAF also provided 55% of the financing for a new sewage system covering several marginalized areas of the city, with the municipal government and private water and sewage utility –INTERAGUA– coving the remaining 45% of the necessary funding.

CAF´s comprehensive urban regeneration program has not only represented a profound beautification of the city of Guayaquil, but has also provided employment for thousands of workers, accelerated the national and local economy, boosted tourism, and improved the quality of life and overall welfare of the city’s habitants.

Case Study Sustainable Infrastructure:

Bursa Light Rail System

The light rail system of Bursa Metropolitan Municipality was initiated in 1990s by Bursa Metropolitan Municipality with the financial contribution of KfW. KfW extended a combined financing in amount of EUR 126.5 million (development loan/promotional loan) to Turkish Treasury to be onlent to the Municipality. As a complement, training measures were supported in the start-up phase and the first two operating years at a total cost of EUR 1.69 million financed from grant funds. All these efforts given for this initial part of the system (“Section I A”) resulted in a perfectly operating light rail system for the citizens of city of Bursa.

Bursa Light Rail System

The KfW financed project which encompass the construction of 17,4 km of light rail track (LRT), 17 stations, the purchase of 48 light rail vehicles from Siemens, construction of a vehicle storage facilities, a workshop for maintenance with office building and operation management facilities started operation in 2002. In addition, training and a tram driving simulator were provided to enable the new staff to operate and maintain the system. Accompanying measures consisted of restructuring of urban bus system as feeder buses and taking 600 private taxis out of operation in the service area of the LRT system. The implementation of this 1st phase light rail system was the first step of the municipality to establish an efficient public transport system with the light rail as a backbone.

The private companies involved in this BLRS (“BursaRay Light Rail System”) Section I A were Siemens AG, Siemens A.Ş., Simko A.Ş., Güriş A.Ş. Tüvasaş (as the “contractor and supplier”) and Yapi-ICF Kaiser A.Ş. (as the “implementation consultant”).

Upon the efficient results achieved in this section, BLRS Section I B (5.5 km+6 stations) financed by EUR 55 million European Investment Bank (EIB) loan under the guarantee of Turkish Treasury was constructed. The private companies involved in this BLRS Section I B were Siemens AG, Siemens A.Ş., Tekfen A.Ş. (as the “contractor and supplier”) and Yapi-ICF Kaiser A.Ş. (as the “implementation consultant”).

This followed by BLRS Section II which comprises of extension lines of 8.9 km to the existing light rail system, 8 stations and purchase of 30 LRT vehicles from Bombardier. BLRS Section II was financed by sovereign-guaranteed loan from EIB (EUR 100 million) and a sub-sovereign loan from EBRD (a total of EUR 70 million) accompanied with a technical assistance. The private companies involved in this BLRS Section II which was prepared by Optim Obermeyer Proje A.Ş were Yapi Merkezi A.Ş., Tewet GmbH and Bombardier GmbH (as the “contractor and supplier”) and Kaiser Consultancy A.Ş. (as the “implementation consultant”).

According to a project launched to identify carbon potential of the BLRS II, average expected emission reductions of the BRLS II are 14,689tCo2 per year.

The project contributes to the sustainable development of the industrial city of Turkey, Bursa in various ways: (i) improves the living standards of the population with a comfortable, fast and safe transportation system; (ii) reduces traffic jam, pollution and accidents; (iii) generates new residential and business areas; (iv) creates job opportunities.

Renewable Energy

Renewable Energy

Improvement of quality of Members’ strategies in RE

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Energy Efficiency

Energy Efficiency

Best practices and facilitation of Members’ collaboration

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Social & Economic Inclusion

Social and Economic Inclusion

Enhancement of poverty mitigation mechanisms

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Green Finance Mapping

Green Finance Mapping

Transparent and comprehensive overview of green financing

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