Industry welcomes G7 infrastructure ambition rising “from billions to trillions”

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Plans would dramatically ramp up funding for global infrastructure, but G7 acknowledges the need for industry help to modernise its tools for delivery.   

The new G7 Leaders’ Statement puts the partnership for infrastructure and investment on a new footing, aiming to strengthen country-led partnerships and use multilateral organisations more widely. 

Leaders announced plans to scale up international investment in infrastructure “from billions to trillions in finance from our economies” and to cooperate with multi-lateral development banks (MDBs) and other independent financial institutions to assess and set best conditions for mobilising private finance, aligned with the objectives of the Paris Agreement.

As with other efforts, such as the recently announced EU Global Gateway, a key challenge to delivering this will be preparing high quality projects, and global industry is offering to help with this urgent task.

Dr Nelson Ogunshakin, OBE, chief executive of the international body that represents the global engineering industry, FIDIC, said: “There needs be an integrated effort to build pipelines of high quality and bankable projects – especially in lower income countries where leveraging private investment can be much harder due to higher levels of risk. Only by preparing large numbers of projects to the highest standards now, will investors feel sufficiently reassured to invest and generate the necessary scale of outcomes in this decade.”

“The G7 leaders statement does show the right ambitions for global infrastructure and is another big step in addressing climate change, global poverty and sustainable development. But the need for credible project pipelines must also be developed in parallel with the urgent need for capacity building of the national delivery agencies, supply chain, and adoption of standard procurement process, such as FIDIC standards Form Contracts which is widely adopted by almost all MDBs, to ensure capital projects investment are well structured, in the emerging countries where the infrastructure needs are much greater.”

“Based on our global footprint in over 100 countries and access to 40,000 engineering firms, FIDIC would be open to dialogue with the G7 and their MBDs partners to mobilise the consulting engineering industry to support this initiative to significantly increase the bankable green investable infrastructure projects ”

Leveraging private finance is important to the G7. Its new statement makes clear it will be seeking measures to increase capacity to leverage private finance, including supporting the implementation of the G20 Sustainable Finance Roadmap.

The G7 will also work with partners to deliver previous agreements for the mobilisation of $100bn, including through voluntary channelling of Special Drawing Rights.

It also proposes the creation of a new Resilience and Sustainability Trust within the International Monetary Fund, while the G7 will also review and further modernise its toolkits to drive innovations to help developing countries access sustainable finance from capital markets.