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Sustainable Infrastructure for Urban Growth

Katherine Sierra

May 2013, English

Sustainability increasingly affects infrastructure investment patterns, particularly in cities in developing countries where urban populations will more than double—increasing by 2.6 billion people—by 2050. Some governments provide economic incentives to support long-term investments in sanitation and drainage systems that include green infrastructure such as green roofs, rain gardens, and permeable pavements. Energy-efficient power generation from wind, solar, and water sources is growing, and improved technology will decrease prices. Institutional partnerships are critical in creating finance strategies for sustainable infrastructure in cities, as illustrated by Katherine Sierra in this paper with three case studies of cities facing climate change challenges.

The regulation of carbon emissions has created a market for financing sustainable energy and transportation infrastructure in developing countries with carbon credits—payments for activities that sequester carbon or reduce emissions. Uganda’s West Nile Electrification Project (WNEP) is the World Bank’s first sub-Saharan project to issue carbon credits. The WNEP includes a 3.5-megawatt hydroelectric power plant and a 1.5-megawatt heavy fuel oil-fired power plant that issued more than 20,000 carbon credits. Other strategies identify environmental needs and form responsive public-private partnerships such as the Arab Financing Facility for Infrastructure (AFFI). The Middle East and North Africa region historically receives the smallest share of private participation in infrastructure, and the AFFI seeks to address the pressing needs of rapid population growth and unmet investment needs by supporting public infrastructure services and public-private partnerships that follow Islamic-compliant financing.

This paper was presented at the Lincoln Institute’s annual Land Policy Conference in 2012 and is Chapter 10 of the book Infrastructure and Land Policies.