Developing nations need to invest 4.5% of GDP in infrastructure to…

first_imgThe WorldBank report estimates that this ongoing O&M would cost an additional 2.7%of GDP per year. A new World Bank report finds that investments of 4.5% of GDP will allow developing countries to achieve their infrastructure-related Sustainable Development Goals and stay on track to limit climate change of up to 2°C. AFD and Eskom commit to a competitive electricity sector  Infrastructure spending Featured image: Stock  Climate-smart infrastructure The report also emphasises that improving services requires more than capital expenditure; ensuring a steady flow of resources for operations and maintenance (O&M) is a necessary condition for success. Its scenario-based approach demonstrates that the amount countries need to spend depends on their ambition and efficiency. Thespending goal of 4.5% of GDP represents a preferred scenario whereby countriesadopt policies that account for long-term climate goals to avoid expensivestranded assets later, invest in renewable energy, combine transport planningwith land-use planning, develop railway systems attractive to freight, anddeploy decentralised technologies in rural areas—such as mini-grids forelectricity. Georgieva continued:“With the right choices, infrastructure can be built that helps achieveglobally agreed emissions targets. The focus must be on smarter and moreresilient investments, not necessarily more money.” The report shifts the focus from spending more on infrastructure towards spending better, using specific objectives and relevant metrics. Additionalnew research released by the World Bank provides the first consistentlyestimated data set on current infrastructure investments in developingcountries. Finance and Policy Uncountednumbers are unable to access work and educational opportunities due to the absenceor high cost of transport services.center_img But in other scenarios, with similar ambitions but without supportive policies, the price tag doubles. Read more: Smart cities to generate $100bn in revenue for utilities by 2027 Generation It findsthat these countries spend between 3.4% of GDP and nearly 5%, with a centralestimate of around 4%. “Our analysis clearly shows that developing countries can build the climate-smart infrastructure they need by spending around 4.5% of GDP. The good news is this is close to what many countries already spend,” said Kristalina Georgieva, Interim President of the World Bank Group. TAGSClimate changeinfrastructure developmentinvestmentSDGsWorld Bank Previous articleOpinion: Industry 4.0 and the changing job landscapeNext articleEd’s Note | Can foreigners fix Eskom? Guest ContributorThe views expressed in this article by the author are not necessarily those of the publishers and/or association partners. While every effort is made to ensure accuracy, the publisher and editors cannot be held responsible for any inaccurate information supplied and/or published. RELATED ARTICLESMORE FROM AUTHOR BRICS Beyond the Gap, also finds infrastructure investment compatible with full decarbonisation need not cost more than more polluting alternatives. Until now,realistic estimates of infrastructure spending needs have been elusive andincomplete. Today theinfrastructure gap is huge: 940 million people live without electricity, 663million lack improved sources of drinking water, 2.4 billion lack improvedsanitation facilities, one billion live more than two kilometers from anall-season road, and four billion people lack internet access. The report’s innovative approach presents infrastructure spending estimates in an “if-then” framework (if the country wants this, and these are the assumptions made, then this is how much it would cost). The report and associated interactive website also go into more regional and sectoral detail. Low carbon, solar future could increase jobs in the future – SAPVIA UNDP China, CCIEE launch report to facilitate low-carbon developmentlast_img