Infrastructure Investment

Infrastructure plays a crucial role in the global economy. The availability of transport, communication, electricity, safe water and sanitation, and other basic facilities has a tremendous impact on improving the quality of life and well-being. Infrastructure facilities and services are instrumental to efficient production, transport and trade that all spur economic growth, which in turn helps in reducing poverty. Recognising the essential role that long-term financing for investment plays in supporting strong, sustainable, balanced and inclusive growth, G20 Finance and Central Bank Deputies established a Study Group on Financing for Investment in 2013, which was transformed into the Infrastructure Investment Working Group (IIWG) in 2014 and then into the Infrastructure Working Group (IWG) at the end of 2017.

The OECD, drawing on its longstanding expertise and extensive work on “Institutional Investors and Long-Term Investment,” has been a key contributor to the G20 work on financing for investment and an active member of the IIWG and IWG. In 2013, upon G20 Leaders’ request, the OECD developed the G20/OECD High-Level Principles for Long-term Investment Financing by Institutional Investors. Following a call from Leaders, the OECD has continued its work on institutional investors through the G20/OECD Task Force on Institutional Investors and Long-Term Financing. More recent contributions include the G20/OECD Guidance Note on Diversification of Financial Instruments for Infrastructure and SMEs endorsed by G20 Finance Ministers and Central Banks Governors and Leaders in 2016.

Infrastructure as an asset class

Under the Argentinian Presidency the G20 has developed “The G20 Roadmap to Infrastructure as an Asset Class”, endorsed by Finance Ministers and Central Banks Governors in March 2018. The Roadmap aims to address common barriers to the emergence of infrastructure as an asset class, including the heterogeneous nature of infrastructure assets, the lack of a critical mass of bankable projects and insufficient data to track asset performance. The Roadmap is a major step to mobilize more private infrastructure investment, and particularly in infrastructure that support sustainable growth.  The OECD has been a key supporter of the G20 agenda to develop infrastructure as an asset class in particular on the diversification of financial instruments for infrastructure and on addressing data gaps.

In order to support these efforts, the OECD, along with the World Bank, prepared a Stocktake of Tools and Instruments Related to Infrastructure as an Asset Class. The stocktake identifies numerous gaps for further consideration by the G20 and other fora; including implementation of existing instruments, standardisation, and also the need for new guidance for instance on the treatment of new technologies such as blockchain. The OECD also acts as the Secretariat and contributes to the newly established Infrastructure Data Initiative, which brings together MDBs and other stakeholder including private investors, with the aim to address data gaps and information asymmetries that hinder infrastructure investment.