Presented at “Transforming Transportation 2012”, Washington DC

A N E W P U B L I C - P R I V A T E P A R T N E R S H I P F O R I N F R A S T R U C T U R E I N V E S T M E N T

ARISE

Dr. D

avid

J. Jhira

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6/2

012

Source:

THE IMPERATIVE FOR MULTI-FACETED INNOVATION

Source: IEA WEO 2011

INFRASTRUCTURE INVESTMENT NEEDS

Investment in new power plants and infrastructure in the New Policies Scenario

Source: GEF STAP

INCREASING DEMAND FOR TRANSPORT INFRASTRUCTURE

Source: Columbia CGT

THE NEED FOR LONG-TERM INVESTORS

WHY ARE SWF A GOOD FIT?

• Uniquely positioned as long-term investors• Can leverage their large asset base• Have the intergenerational outlook necessary for large-

scale infrastructure investment• Prefer to invest in large projects >$500m• Natural to expand their mission from preserving financial

wealth to include the preservation of environmental wealth by mitigating climate change

• Have access to the massive amounts of capital required for transformation to a low carbon economy

Source: Deutsche Bank

WHICH COUNTRIES HAVE AN SWF?

Source: SWF Institute

WH

ICH

AR

E T

HE

LAR

GES

T S

WF

Total Capital of around 3.6 trillion USD

WHAT ARE SOME KNOWN BARRIERS TO SWF INVESTMENT IN INFRASTRUCTURE?

• Comparatively larger risk than traditional investments

• Lack of relationship similarly long-term providers of debt financing to match SWF equity stake

• Lack of knowledge of international infrastructure investment markets and investment environments in target countries

• Lack of relationship with project development entities

• Can be perceived as not in line with mission of preserving and multiplying wealth for future generations

ACCELERATING RESILIENT INFRASTRUCTURE INVESTMENT FOR SUSTAINABLE ECONOMIES

• Launch a process and a working group consisting of Sovereign Funds, Multilateral Development Banks and other stakeholders;

• Focus on resilient and sustainable infrastructure investment with social and economic returns supplementing financial returns;

• Aim to mobilize an international infrastructure project preparation fund for Rio +20 launch;

• Employ cutting edge geospatial information systems to support project design and implementation, and the strategic switch from conventional to green infrastructure.

ARISE TOWARDS RIO

• Identify and Remove barriers to investment.• Facilitate dialogues between Sovereign Funds, Multilateral

Development Banks, financial institutions, companies and other stakeholders in a high-level working group

• Define “resilient and sustainable infrastructure”.• Develop qualitative and quantitative benchmarks to

define social, economic, and environmental sustainability and resilience of infrastructure projects.

• Develop metrics and methodologies to assess the suitability of potential infrastructure investments against these benchmarks.

• Develop a package of infrastructure projects to attract capital investment

ARISE LAUNCH AT RIO +20

• Announce a new and innovative public-private partnership to invest in resilient and sustainable infrastructure, including the Sovereign Wealth Funds (SWFs), Multilateral Development Banks (MDBs), foundations, and the private sector, in direct collaboration with beneficiary communities.

• Create a forum in which SWFs and MDBs will determine how to mobilize debt and equity in a timely manner on a project-by-project basis

• Attract innovative financing sources such as debt guarantees and grant funding to minimize technological risk and to overcome the initial capital cost hurdle of new technology.

• Commit funding and resources to an international project preparation fund to determine investment feasibility, including financial, social, economic and environmental risks and returns.

• Support policy and regulatory reforms to create an enabling environment for resilient and sustainable infrastructure development.

POTENTIAL INITIAL PARTNERS

ARISE

ILLUSTRATIVE PROJECT EXAMPLES

• Bus Rapid Transit Systems:• Dedicated lanes and bus stops

with easy access• Local, Express and Feeder

Services• Tickets integrated across whole

system and affordable for general public

• Reliable user information system• Clean buses with low emissions,

e.g. using CNG• Integrated into zoning to enable

transit-oriented hubs

CONCENTRATED SOLAR POWER PLANT

• Around 50MW Capacity

• Project cost of $300m• Annual power sales of

$ 50m• Cash-flow positive

within 24 months• Ideally sited where

some form of renewable energy sales credits or subsidies are available