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  • Published: 01 April 2019

Infrastructure for sustainable development

  • Scott Thacker   ORCID: orcid.org/0000-0003-2683-484X 1 , 2 ,
  • Daniel Adshead 2 ,
  • Marianne Fay 3 ,
  • Stéphane Hallegatte   ORCID: orcid.org/0000-0002-1781-4268 3 ,
  • Mark Harvey 4 ,
  • Hendrik Meller 5 ,
  • Nicholas O’Regan 1 ,
  • Julie Rozenberg 3 ,
  • Graham Watkins 6 &
  • Jim W. Hall 2  

Nature Sustainability volume  2 ,  pages 324–331 ( 2019 ) Cite this article

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  • Civil engineering
  • Developing world
  • Sustainability

Infrastructure systems form the backbone of every society, providing essential services that include energy, water, waste management, transport and telecommunications. Infrastructure can also create harmful social and environmental impacts, increase vulnerability to natural disasters and leave an unsustainable burden of debt. Investment in infrastructure is at an all-time high globally, thus an ever-increasing number of decisions are being made now that will lock-in patterns of development for future generations. Although for the most part these investments are motivated by the desire to increase economic productivity and employment, we find that infrastructure either directly or indirectly influences the attainment of all of the Sustainable Development Goals (SDGs), including 72% of the targets. We categorize the positive and negative effects of infrastructure and the interdependencies between infrastructure sectors. To ensure that the right infrastructure is built, policymakers need to establish long-term visions for sustainable national infrastructure systems, informed by the SDGs, and develop adaptable plans that can demonstrably deliver their vision.

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Acknowledgements

We appreciate the contributions of the Infrastructure Transitions Research Consortium, which is funded by the Engineering and Physical Sciences Research Council by grants EP/101344X/1 and EP/N017064/1. S.T. thanks the United Nations Office for Project Services, specifically R. Jones, G. Morgan, S. Crosskey and T. Sway for providing useful suggestions that improved this manuscript.

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Scott Thacker & Nicholas O’Regan

University of Oxford, Oxford, UK

Scott Thacker, Daniel Adshead & Jim W. Hall

World Bank, Washington, DC, USA

Marianne Fay, Stéphane Hallegatte & Julie Rozenberg

Department for International Development (DFID), London, UK

Mark Harvey

German Agency for International Cooperation (GIZ), Bonn, Germany

Hendrik Meller

Inter-American Development Bank (IADB), Washington, DC, USA

Graham Watkins

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S.T. designed the study. D.A., S.T. and J.W.H. performed most of the analyses. J.W.H., S.T. and D.A. wrote most of the manuscript. All authors contributed to the development of the manuscript through methodological advice, analysis, comments and edits to the text and figures.

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Thacker, S., Adshead, D., Fay, M. et al. Infrastructure for sustainable development. Nat Sustain 2 , 324–331 (2019). https://doi.org/10.1038/s41893-019-0256-8

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essay on infrastructure development

The vital role of infrastructure in economic growth and development

In 1956, in an America recovering from the economic and psychological consequences of World War II, President Dwight D. Eisenhower signed into effect a bill that authorised the construction of an interstate highway system. The lasting effects of that decision were profound for both the American economy and the morale of its people. Eisenhower predicted that government investment in infrastructure had the power to stimulate the economy in the short-term and create the conditions for longer-term prosperity and growth for future generations. Today, Eisenhower’s decision to invest in public infrastructure is regarded as a key factor that contributed to the era of American prosperity that followed.

The COVID-19 pandemic has produced similar conditions of global upheaval not seen since the 1940s. The stress placed on our structural systems has revealed their vulnerabilities and limitations, and the impact on our global economy is likely to be long-lasting. Subsequently, this is a period of great uncertainty but also great possibility. We have collectively been presented with an opportunity for what the World Economic Forum has called a global ‘Great Reset’ . Now is the time to take stock of where we are and decide where we’d like to be.

As G20 economies continue to stabilise, the emphasis in spending will naturally shift from mitigating the immediate crisis of the pandemic to an investment in stimulating economic recovery and facilitating medium and long-term growth and stability. The present challenge for the world’s nations is to best direct their limited resources where they will have the greatest impact.

The case for infrastructure investment as a stimulus

Infrastructure investment has a strong impact on economic growth, as evidenced by a 2020 GI Hub study that found the economic multiplier for public investment (including infrastructure) is 1.5 times greater than the initial investment in two to five years – much higher than other forms of public spending.

The study also showed that the infrastructure outcome was a factor that influenced the positive effect of the investment.

This analysis suggests that infrastructure investment can play a key role in supporting economic recovery and stability, however simply investing in infrastructure is insufficient. It needs to be the right kind of infrastructure that has transformative outcomes for the people and the planet.

View more in our Knowledge Hub

Our Knowledge Hub is a library of resources from the GI Hub and other organisations across the infrastructure ecosystem.

The right kind of infrastructure

In order to have the greatest impact on stimulating economic recovery in the short-term and lasting stability in the long-term, infrastructure should be sustainable, resilient and inclusive. This type of transformative infrastructure can help produce prosperity for all.

Transformative infrastructure is infrastructure that provides lasting social and economic value for everyone, produces long-term prosperity for future generations and creates the conditions to transition towards a resource-efficient, sustainable economy. It's designed with the flexibility to respond to future trends and challenges, able to adapt to technological improvements, and incorporate better solutions as they become available. Transformative infrastructure is therefore longer lasting and more resilient, meaning it can adapt to crises better and provide more benefits over time versus more traditional infrastructure.

Transformative infrastructure is socially inclusive. Its design is guided by the notion of being beneficial to the greatest number of people. Infrastructure designed and implemented in this way will provide maximal utility to the largest number of people, increasing its stimulus effect and facilitating the goal of a more equitable world.

The next step

In November 2021, the GI Hub launched our newest resource, Transformative Outcomes Through Infrastructure . Its purpose is to uncover the G20 priorities that underlie the USD3.2 trillion of infrastructure investments announced post-COVID, and to help direct future spending into areas that could yield the greatest possible benefits for people and the planet.

With conscious decision-making we can plan, design and procure infrastructure projects  that have the capacity to be resilient, sustainable and inclusive. This can allow us to realise the immediate short-term benefits of infrastructure investment in stimulating the economy across a range of markets and regions, and maximise the benefits and longevity of that investment going forward, all while moving towards a greener, equitable future.

Infrastructure Monitor

Infrastructure Monitor identifies and analyses global trends in private investment in infrastructure to inform future investment and policy.

Pipeline Access

Pipeline Access is a directory of project pipelines that enables government and industry to track projects and assemble market analyses.

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Why Infrastructure Matters: Rotten Roads, Bum Economy

Subscribe to the brookings metro update, robert puentes robert puentes nonresident senior fellow - brookings metro @rpuentes.

January 20, 2015

  • 12 min read

Cities, states and metropolitan areas throughout America face an unprecedented economic, demographic, fiscal and environmental challenges that make it imperative for the public and private sectors to rethink the way they do business. These new forces are incredibly diverse, but they share an underlying need for modern, efficient and reliable infrastructure.

Concrete, steel and fiber-optic cable are the essential building blocks of the economy. Infrastructure enables trade, powers businesses, connects workers to their jobs, creates opportunities for struggling communities and protects the nation from an increasingly unpredictable natural environment. From private investment in telecommunication systems, broadband networks, freight railroads, energy projects and pipelines, to publicly spending on transportation, water, buildings and parks, infrastructure is the backbone of a healthy economy.

It also supports workers, providing millions of jobs each year in building and maintenance. A Brookings Institution analysis Bureau of Labor Statistics data reveals that 14 million people have jobs in fields directly related to infrastructure. From locomotive engineers and electrical power line installers, to truck drivers and airline pilots, to construction laborers and meter readers, infrastructure jobs account for nearly 11 percent of the nation’s workforce, offering employment opportunities that have low barriers of entry and are projected to grow over the next decade.

Important national goals also depend on it. The economy needs reliable infrastructure to connect supply chains and efficiently move goods and services across borders. Infrastructure connects households across metropolitan areas to higher quality opportunities for employment, healthcare and education. Clean energy and public transit can reduce greenhouse gases. This same economic logic applies to broadband networks, water systems and energy production and distribution.

Big demographic and cultural changes, such as the aging and diversification of our society, shrinking households and domestic migration, underscore the need for new transportation and telecommunications to connect people and communities. The percentage of licensed drivers among the young is the lowest in three decades, as more of them use public transit and many others use new services for sharing cars and bikes. The prototypical family of the suburban era, a married couple with school-age children, now represents only 20 percent of households, down from over 40 percent in 1970. Some 55 percent of millennials say living close to public transportation is important to them, according to a recent survey by the Urban Land Institute.

Yet unlike Western Europe and parts of Asia, the United States still has a growing population. We’ve added 25 million people in the past 10 years. This tremendous growth, concentrated in the 50 largest metropolitan areas, will place new demands on already overtaxed infrastructure. Metropolitan areas must be ready to adapt not only to serve millions of new customers but also to help poorer residents, many of whom are jobless, have the best chance possible to find work.

A recent Brookings analysis found that only a quarter of jobs in low-skill and middle-skill industries can be reached within 90 minutes by a typical metropolitan commuter. Successful cities will be those that connect workers to jobs and close the digital divide between high-income and low-income neighborhoods. The White House notes that broadband speeds have doubled since 2009 and that more than four out of five people now have high-speed wireless broadband, adoption rates for low-income and minority households remains low (about 43 and 56 percent, respectively.)

Our economy is changing as fast as our society. Over 83 percent of world economic growth in the next five years is expected to occur outside the United States, and because of rapid globalization, it will be concentrated in cities. This offers an unprecedented opportunity for American businesses to export more goods and services and to create high-quality jobs at home. It also amplifies the importance of our seaports, air hubs, freight rail, border crossings and truck routes, which move $51 billion worth of goods quickly and efficiently each day in the complex supply chains of the modern economy.

The diverse energy boom also disrupts our infrastructure. Natural gas needs new truck, pipeline and rail networks. Rooftop solar panels have rattled electric utilities, which are scrambling to find ways to incorporate and store the energy they produce while keeping the grid operating. At the same time, finding the money to pay for the development of a smart electricity grid and for clean energy presents challenges, as hundreds of thousands of small and large projects are projected to come online in coming decades.

High-profile natural disasters, such as Hurricane Sandy, drew attention to problems with water infrastructure. Overwhelmed waste water systems, washed-out roads, shorted electrical circuitry and flooded train stations not only highlighted the economy’s reliance on these networks, but also revealed their poor condition. The nation’s water systems are now being rebuilt. Cities are working to capture storm and rain water rather than building costly pipes to sluice it away. The Center for an Urban Future recently described how New York City plans to spend $2.4 billion over 18 years in so-called “green” infrastructure such as rooftop vegetation, porous pavements, and soils to soak up rain.

Over and above the new types of needed infrastructure is a big change in how projects are financed.

Despite the importance of infrastructure, the U.S. has not spent enough for decades to maintain and improve it. It accounts for about 2.5 percent of the economy, compared to about 3.9 percent spent in Canada, Australia and South Korea, 5 percent for Europe and 9-12 percent in China. The McKinsey Global Institute estimates that the U.S. must spend at least $150 billion more a year on infrastructure through 2020 to meet its needs. This would add about 1.5 percent to annual economic growth and create at least 1.8 million jobs.

Split between Republicans and Democrats, the federal government appears incapable of doing this. For the foreseeable future, the Highway Trust Fund, the State Revolving Funds for water and others will face cuts and squeezed budgets. Other experiments, such as a National Infrastructure Bank, seem prohibitively complex in the current political environment. And of course, rising interest costs on federal debt, increases in entitlement spending and declining traditional revenue sources such as the gasoline tax mean that competition for limited resources is fiercer than ever.

Some cities and states are enjoying budget surpluses because property and sales tax revenues. But most localities will take years to build back their reserves, repay additional debt incurred during the recession and pay for deferred maintenance on infrastructure. Unfunded pension obligations and other debts facing all levels of government mean there just aren’t the public funds to pay for necessary infrastructure. And though interest rates remain at historically low levels, the ability of many governments to borrow from capital markets is hindered by debt caps and weak credit ratings.

Despite gradual acceptance in the past decade that infrastructure is vital to economic growth, debate of spending remains an amorphous and simplistic. Infrastructure is made up of interrelated sectors as diverse as a water treatment plant is from an airport, a wind farm, a gas line or a broadband network. The focus on infrastructure in the abstract led to unrealistic silver-bullet policy solutions that fail to capture the unique and economically critical attributes of each. In reality, each infrastructure sector involves fundamentally different design frameworks and market attributes. And they are owned, regulated, governed and operated by different public and private entities.

The federal role should not be exaggerated. American infrastructure in selected, built, maintained, operates and paid for in a diverse and fragmentary fashion. For certain sectors, such as transportation and water, federal spending is relatively high, averaging $92.15 billion each year from 2000 to 2007. But even there, according to the Congressional Budget Office, Washington’s share of spending never topped 27 percent. For other sectors, such as freight rail, telecommunications, and clean energy, the federal role is more limited.

So what does all this mean and how are we going to pay for what we need?

Roads, bridges and transit must be paid for largely from public funds. Ballot measures have been important for fund raising, particularly at the local level, because general obligation bonds require popular approval. That’s how regions and municipalities pay for public transit systems, bridges, road construction, water and sewer improvements and a host of other infrastructure projects. Many cities are following this trend. Those places, especially in Westerns cities such as Los Angeles, Phoenix and Salt Lake City, are taxing themselves, dedicating substantial local money and effectively contributing to the construction of the nation’s infrastructure.

Metropolitan transportation initiatives are popular among voters. According to the Center for Transportation Excellence, 71 percent of measures were passed in 2014 as were 73 percent in 2013. While state level ballot measures on infrastructure spending are far less common, in 2013, eight states voted to raise taxes for such projects. This includes both conservative strongholds such as Wyoming and Democrat-controlled legislatures in states such as Maryland.

A number of cities are using market mechanisms that capture the increased value in land that accrues from infrastructure. This provides a more targeted way to finance new or existing transportation projects by matching the benefit from infrastructure with its cost. These techniques include impact fees where land developers are assessed a charge to support associated public infrastructure improvements, generally local roads and public works like sidewalks. The lease or sale of air rights is another practice that has been used by to finance development around transit stations for decades, famously around Grand Central Station in New York, and more recently in Boston and Dallas.

Another growing trend is the use of tax increment financing districts. These TIFs support infrastructure projects by borrowing against the future stream of additional tax revenue the project is expected to generate. Examples include a TIF used to pay for improvements at the Atlantic Station project in Atlanta and Portland, Ore.,’s similar strategy to fund its streetcar by creating a local improvement district that leveraged the economic gains of nearby property owners.

For its part, the federal government can allow greater flexibility for states and cities to innovate on projects that connect metros. Passenger Facility Charges used to fund airport modernization are artificially capped at $4.50 and do not begin to cover the airport’s operating and long-term investment costs. Busy airports could be freed to meet congestion and investment costs by removing the caps. Archaic restrictions on interstate highways tolls could also be lifted. Metropolitan and local leaders, with the states, are in the best position to determine which segments of road could best raise revenue.

Other infrastructures could be public-private partnerships. These often complex agreements allow the public sector to bring in private enterprises to take an active role during the life of the infrastructure asset. At their heart, these partnerships share risk and costs of design, construction, maintenance, financing and operations.

The public-sector interest in partnerships is propelled by the shortage of money. Ever since the recession, many states and local governments have been plagued by high debt, low credit ratings and limited options to borrow. PPPs are not “free money,” but they can offer benefits such as better and faster completion of the project, more budgetary accountability and overall savings.

Partnerships with the private sector are not appropriate for all infrastructure sectors or projects. Some may not be profitable enough to attract investors. Green infrastructure or public parks, for example, may lack a revenue stream. Private conservancies maintain and oversee parks in New York, Pittsburgh, Houston and St. Louis, but they are all nonprofit organizations set up solely for that purpose and do not help spread risk.

The best infrastructure projects for private sector involvement are those with a clear revenue stream from rate-payers, such as water infrastructure and toll roads. The private sector can bring in new technologies for metering and billing that can improve services. Thoughtful procurement can also facilitate projects that do not include ratepayers. Nearly any project can be suitable for a private partnership as long as there is a mechanism to spread risk among all parties, even without user fees. So-called availability payment models allow the public sector to pay a recurring user fee for the use of an asset based on its condition and accessibility. These payments are a form of debt since but require continuous public expenditure and a binding budgetary obligation.

It would help spur public-private partnerships if there were standard contracts and pricing, risk sharing and returns. In the past, Washington has set these kinds of standards for such vast areas of the consumer market as housing and small business. But the federal government appears unlikely to do so for infrastructure investment. A mix of public, private and civic bodies will have to do so instead.

An emerging example is the West Coast Infrastructure Exchange, a collaboration between California, Oregon, Washington and British Columbia standardizing transparency, contracts, labor and risk allocation. The goal is to build a market for projects. By sharing details, project finance and delivery methods can be scaled and replicated.

If successful, the WCX could be a model for other state, city and metro infrastructure exchanges. Each exchange could focus on the infrastructure delivery and finance strategies suited to the culture, traditions and needs of the region it serves. An East Coast or Mid-Atlantic Exchange could focus on rebuilding coastlines and climate resiliency after Hurricane Sandy, or on transportation projects that cross state borders. A Midwestern Exchange might focus on water infrastructure in a largely slow growth environment or on projects with Canada. A Southern Exchange might facilitate new infrastructure to accommodate fast growth and new manufacturing, supply chains and movement of goods. Regardless of their focus, exchanges could be linked through a project clearinghouse to share data, information and best practices.

Energy, telecommunications and freight rail will remain dominated by the private sector typically with federal and state regulatory oversight. But there will also be new types of public and private relationships in these sectors, too. For example, while broadband networks are still delivered by private companies, local governments recognize that this kind of network access is equally important to the future economic success of households as well as businesses. So as cities such as Los Angeles explore ways to extend broadband to all homes, they also are working to figure out the financing arrangements and business opportunities for firms interested in developing those networks.

The trade and logistics industry is highly decentralized, with private operators owning almost all trucks and rails, and the public sector owning roads, airports, and waterway rights. Unlike such countries as Germany, Canada and Australia, the U.S. does not have a unified strategy that aligns disparate owners and interests around national economic objectives. Innovative partnerships are therefore necessary to make freight movements in and around big cities more efficient and reliable. The CREATE program in Chicago aligns several such interests in a citywide effort to relieve freight and passenger bottlenecks that cause delays. The $2.5 billion for the program will come from a mix of traditional sources (federal grants), private investments (railroads), state loans (bonds) and existing local sources.

It is clear that projects are becoming more complex. There is not one-size-fits-all form of financing for them. It very much depends on the place, time and particulars of each project. The level of private engagement will depend on market and business opportunities.

In many respects, America’s ability to realize its competitive potential depends on making smart infrastructure choices. These must respond to economic, demographic, fiscal, and environmental changes if they are to help people, places and firms thrive and prosper.

This commentary was originally published by the Washington Examiner .

Infrastructure

Brookings Metro

William H. Frey

June 6, 2024

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Anthony F. Pipa

June 4, 2024

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Infrastructure development in India: a systematic review

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It is now well-accepted that infrastructure development is essential for the growth of any economy. Successive governments in India, both at the Union and State level have given a thrust towards increased budgetary spending on infrastructure to help economic growth. On the eve of the 75th year of independence, there is a reiteration for long-term initiatives, including focused programs for roads, railways, airports, waterways, mass transport, ports, and logistics to further boost infrastructure spending. Keeping this in mind, the authors sought to systematically review the literature on how infrastructure development has unfolded in India between the years 2000–2022. The study shows that with diverse economic growth in India, there is interest in infrastructure development aligned with public interests. Infrastructure development is contextual and location-specific. Access to infrastructure positively impacts social and economic outcomes. There is however growing concern for sustainable development with rapid urbanization.

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Indira, A., Chandrasekaran, N. Infrastructure development in India: a systematic review. Lett Spat Resour Sci 16 , 35 (2023). https://doi.org/10.1007/s12076-023-00357-5

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Infrastructure Development and Economic growth: Prospects and Perspective

P. Rao , B. Srinivasu

Jan 15, 2013

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Quality indicators

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Key takeaway

Infrastructural development plays a crucial role in promoting economic growth and reducing poverty and deprivations in a country..

Infrastructure is the prerequisite for the development of any economy. Transport, telecommunications, energy, water, health, housing, and educational facilities have become part and parcel of human existence. It is difficult to imagine a modern world without these facilities. These are vital to the household life as well as to the economic activity. Infrastructure plays a crucial role in promoting economic growth and thereby contributes to the reduction of economic disparity, poverty and deprivations in a country. Greater access of the poor to education and health services, water and sanitation, road network and electricity is needed to bring equitable development and social emposwerment. It is an important pre-condition for sustainable economic and social development. Infrastructural investments in transport (roads, railways, ports and civil aviation), power, irrigation, watersheds, hydroelectric works, scientific research and training, markets and warehousing, communications and informatics, education, health and family welfare play a strategic but indirect role in the development process, but makes a significant contribution towards growth by increasing the factor productivity of land, labour and capital in the production process, especially safe drinking water and sanitation, basic educational facilities strongly influence to the quality of life of the people. This study establishes the relationship between infrastructure and economic growth using growth theories by empirical evidences. Finally it concludes infrastructure and poverty reduction in the Indian context.

Essays on public infrastructure investment and economic growth

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2014 Theses Doctoral

Essays on Infrastructure and Development

Tompsett, Anna

Spending on infrastructure accounts for several percentage points of global world product, reflecting its perceived importance to growth and development. Previous literature has made limited progress in providing unbiased estimates of its impacts, or causal evidence about policy changes that can alter this impact. Primarily, this is because of the selection problem: locations in which infrastructure is built differ from those in which it is not built. This dissertation provides evidence towards three important questions related to infrastructure and development. First, what role does manmade transport infrastructure play in determining and maintaining patterns of economic geography? Second, to what degree does the relocation of economic activity in response to changes in the transport infrastructure network affect estimates of the economic impact of those changes? Third, what is the effect of involving beneficiary communities in decision-making on projects to improve local infrastructure? To address the selection problem, Chapters 2 and 3 exploit quasi-experimental variation in distance to a land transport route created by the opening and location of bridges over major rivers in the historical United States, using a new dataset containing every bridge built over the Mississippi and Ohio rivers. Chapter 4 presents evidence from a randomized experiment in Bangladesh.

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essay on infrastructure development

The widespread economic benefits of infrastructure development

Infrastructure development plays a key role in ensuring fast economic growth and alleviating poverty in South Africa. South Africa has a good core infrastructure network such as a transport system, power, communications network, sewage and water. However, while there is a good core network, previously disadvantaged areas and rural areas don’t have the same adequate infrastructure as developed communities due to high social inequality. The core difference between these communities affects the citizens who reside there but also the economic development of South Africa. 

Below, we will explore how various sectors can benefit from infrastructure development. 

The energy sector

In modern society, energy is vital as it plays a role in most human activities and helps improve the standard of living. Energy makes life easier and is needed for sectors to run smoothly. Most rural areas don't have adequate energy infrastructure, which hinders productivity within the areas and limits any contribution to the economy. This is why the DBSA is focused on creating an inclusive and integrated rural economy through energy infrastructure . To do this, we plan to develop and finance infrastructure projects that will offer everyone in South Africa access to affordable, reliable, modern and, more importantly, sustainable energy. This will help power the country and ensure economic growth in bo th rural and urban areas.

Water and sanitation sector

Water is a basic need for human survival. While a large number of South Africans have access to safe, clean drinking water through pipe systems, there is a large number of citizens who live in informal settlements and rural areas who don’t have access to potable water. Investing in water and sanitation is an effective way of improving the economy. It will allow communities to live healthily, improve the health sector, and improve productivity in the country. Water affects the health sector and has a ripple effect on education, construction, manufacturing, and more. With integrated infrastructure planning , various sectors can benefit and thrive, ensuring economic growth beneficial for all citizens. The DBSA understands the importance of access to clean, safe, quality water. This is why we work to ensure that water is available for citizens and facilitate sustainable management of water and sanitation for South Africans. 

The transport sector

Transportation is fundamental for a booming economy. It helps transport goods and services and enables people to access work, schools and recreational activities, which also play a role in the economy. Without any improvement, the transport system will hinder continuous economic growth, especially in rural areas. A well-developed transport system will ensure the sustainable development of the economy throughout South Africa. At the DBSA, we invest in transport systems that will ensure all citizens experience safe, efficient and sustainable systems in their communities, pushing economic activity and increasing job opportunities. 

When it comes to infrastructure spending, ICT is an important addition that must be prioritised. The digital space continues to improve and grow, and for South Africa to compete and trade effectively with other countries, there needs to be adequate infrastructure development. It will also help create jobs, improve efficiency within the economy and boost productivity in all sectors. The DBSA knows the impact of infrastructure development on economic growth, particularly with ICT, which is why we assist in guiding businesses in modernising their infrastructure and giving support for business innovation.

Social sector

Health, housing and education play a prominent role in the economy and improving quality of life. While the social sector is improving, it needs infrastructure development for human development in South Africa. This will ensure quality education for citizens, which will help improve the unemployment rate, alleviate poverty and ensure economic growth. Infrastructure improvement in the health system will ensure doctors and nurses aren’t overworked, efficient equipment, and quality healthcare for all citizens. With the help of DBSA, citizens can benefit from alleviated poverty, job creation, proper housing conditions and quality health care.  

Final thoughts

Infrastructure development is key in developing South Africa and its economy. Our main objective at DBSA is to assist in ensuring impactful development finance solutions for South Africa and Africa as a whole, which will help improve the quality of health care and a healthy economy. To do that, we need project funding from the public and private sector in helping create a better Africa.

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Essay On Importance Of Infrastructure

Infrastructure is any man-made structure built to make human life easier. This includes sewers, water and power lines, buildings and facilities. It builds a physical image of an economy of a certain place. It is an investment for the improvement of the economy. Infrastructure is essential to a nation for it can provide quality education, health care and protection, transportation, more resources, easier travelling, trades, business. It could also connect peoples, support communities, generate job. Infrastructure could support these making it able to boost an economy with ease. Educational facilities, hospitals and also military installations are examples of infrastructure. So does roads, railroads, airports, and ports which then supports local and international travel. With infrastructure that supports transportation, trades are also possible with local and …show more content…

It would also make local businesses grow and expand. Infrastructure comes with innovation since it is a cause of the increasing number of infrastructure built as the time progresses. Infrastructures come in different types and functions but it is mainly to help build a nation. It acts as the framework in a community. It could support almost everything in the community from its citizen’s basic living needs to boosting its economy. It bring convenience to human life. Innovation is the process of improving the quality of an equipment, material, or infrastructure. It also represents the development of a certain area. A well-developed area is innovated in terms of infrastructures and man-power. Philippines have reached a milestone in developing the country. It is one of the countries in East Asia who achieved a title of “fast growing economy” in the year 2017. It is undeniable that Philippines have developed a lot throughout the

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“The government can borrow at very low rates and build highways and bridges, improve ports, clean up waterways, repair dams, extend commuter railways—in short, undertake a whole raft of public projects that enhance productivity, create jobs, and stimulate spending” (Morris 105). Charles R. Morris uses punctuation in order to create meaning to infrastructure. Informing the reader what it does in order to build America and extend the job market. This emphasis placed on the different forms of infrastructure brings the third portion of the four key parts of America's growth to the audience; “an infrastructure build” (Morris 145-146). The writer presents these topics in a chronological order that makes it easy for the reader to comprehend that oil did the exact opposite of what everyone else was expecting.

Rhetorical Analysis Of State Of The Union Address

Reminding congress that the US “used to b No. 1 in the world in infrastructure” but has “sunk to 13th in the world” serves to bolster his argument for investing in the US infrastructure. This reality undermines the seemingly prosperous image the US tends to claim it has and urges Congress to work towards bettering its nation’s infrastructure. The US loses face at its fall in rank, this sort of shame caused by the degradation of the US position motivates congress to prove that the US has not declined in its ability and standing as a country. Thus, nationalistic sentiments to defend the image of their country arise and act as a tool to enable effective solutions to pressing issues, which, in this case, is

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New York, the city of dreams, the land of riches, all because of the great canal. Begun in the 1817 and opened in its entirety 1825, the Erie Canal is considered the engineering marvel of the 19th century and will be that way for many years to come. The canal was 363 miles long and connected New York to the Great Lakes. The once derided as "Clinton's Folly" which is now known as the Erie Canal alternated by creating a vibrant economy, spreading religion, and growth in population along the new transportation network.

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The Washington state railroads had a monumental impact on the development of Washington. The first Transcontinental Railroad, the Northern Pacific, was built, uniting the western half of America, including Washington State, with the eastern half. Radical thinkers such as Governor Stevens proposed a direct connection from the East to the untouched resources of the West. The United Sates government supported the railway lines by providing state grants. They gave the railroad millions of acres of land in the undeveloped West.

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The Industrial Revolution began in England in the 1700’s within the textile industry. The Industrial Revolution was the transition to new manufacturing processes by using different machines. Before the Industrial Revolution people made different things by hand or simple tools. For example, people wove textiles by hand, and after the Industrial Revolution machines were used instead. The Industrial Revolution began in England because of many reasons.

Regional And Economic Growth In The 1800's

Regional & Economic Growth Assessment The North and South were both different and similar in how they operated. They were mostly based on the categories of transportation, agriculture, geography/climate, labor/industry, and society during the early 1800’s. These categories decided how much the North and South would progress as the country continued to grow. Geography/Climate In the North, they had all the four seasons of fall, winter, spring, and summer.

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The US went through revolutionary advancements in transportation from 1800 to 1840. The transportation improvements had substantial effects on the economy and also individual development. People could now buy goods that were made in places faraway because access was easier to towns and cities and people’s experiences grew as they were able to be more mobile (309). The roads were inadequate in 1800, so the federal government funded the National Road in 1808 to establish its dedication to improve the roads in the nation and so then by 1839 the East and West would be tied together (309). Commerce was still inadequate even with the National Road funded which improved transportation.

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The Tremendous Impact of Railroads on America In the late 19th century, railroads propelled America into an era of unprecedented growth, prosperity, and convenient transportation. Prior to the building of the railroads, America lacked the proper and rapid transportation to make traveling across the country economical or practical. Lengthy travel was often cumbersome, costly, and dangerous.

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The building of roads, canals and railroads played a large role in the United States during the 1800s. They served the purpose of connecting towns and settlements so that goods could be transported quickly and more efficiently. These goods could be transported fast, cheap and in safe way through the Erie Canal that was built to connect the Great Lakes to New York. Railroads were important during Civil War as well, because it helped in the transportation of goods, supplies and weapons when necessary. These new forms of transportation shaped the United States into the place that it is today.

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An introduction to highway building: Although there are many methods to constructing a road, all are based on the principle that geographical objects are removed and replaced with harder and more wear-resistant materials. The pre-existing rock and earth is removed by digging or explosions. Tunnels, embankments and bridge are then added when necessary. The material that the road is being constructed from is then laid by various pieces of equipment, which will be looked at in greater detail in this assignment. The construction management of roads has become increasingly more difficult as larger structures are constantly being required in increasingly short amounts of time.

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The critical role of infrastructure for the Sustainable Development Goals

The critical role of infrastructure for the Sustainable Development Goals is an essay written by The Economist Intelligence Unit and supported by UNOPS, the UN organisation with a core mandate for infrastructure. The research uses three pillars—the economy, the environment and wider society—as well as the overarching theme of resilience through which to assess the role of infrastructure in meeting global social and environmental goals.

  • Marianne Fay, chief economist for climate change, World Bank
  • Jim Hall, director and professor of climate and environmental risks, Environmental Change Institute, University of Oxford
  • Mark Harvey, head of profession (infrastructure), UK Department for International Development
  • Morgan Landy, senior director of global infrastructure and natural resources, International Finance Corporation
  • Virginie Marchal, senior policy analyst, Environment Directorate, OECD
  • Jo da Silva, founder and director, International Development, Arup
  • Graham Watkins, principal environmental specialist, Inter-American Development Bank

Introduction

From the water we drink to the way we travel to work or school, infrastructure touches every aspect of human life. It has the power to shape the natural environment—for good or for ill. As the world’s population expands, urbanisation accelerates and emerging middle classes in developing countries demand more services, the need for infrastructure is rising rapidly. Meanwhile, increasingly severe weather events and rising sea levels pose direct threats to infrastructure assets and the critical services these provide, with lack of precise knowledge about future climate change making long-term planning increasingly difficult.

So how can we address these challenges? Many argue that the answer lies in new approaches to sustainable infrastructure development. The New Climate Economy’s Sustainable Infrastructure Imperative sees investing in sustainable infrastructure as “key to tackling the three central challenges facing the global community: reigniting growth, delivering on the Sustainable Development Goals, and reducing climate risk in line with the Paris Agreement.” 3

Indeed, the Paris Agreement, the 2030 Agenda for Sustainable Development—which supports the Sustainable Developments Goals (SDGs) developed by UN member states—the New Urban Agenda and the Sendai Framework for Disaster Risk Reduction all require investments that deliver climate-resilient infrastructure that supports sustainable development.

Among the SDGs, SDG 9 explicitly refers to building resilient infrastructure. However, all the goals are underpinned by infrastructure development. “Infrastructure is really at the centre of the delivery of the SDGs,” says Virginie Marchal, senior policy analyst in the OECD’s Environment Directorate. She cites inequality as a key example. “How can you make sure that by building the right type of infrastructure you not only have a positive impact on the environment and meet climate goals but you also contribute to reducing inequality within societies?”

Achieving SDG 10—reduced inequalities—means meeting a number of the other SDGs. For example, SDG 6—availability and sustainable management of water and sanitation for all—demands investments in infrastructure of at least US$114bn a year, according to the World Bank. 4 When it comes to meeting SDG 7—access to affordable, reliable, sustainable and modern energy for all—investments needed include US$52bn per year to achieve universal electrification by 2030, only half of which is covered by planned investments. 5 And by helping empower women and girls, infrastructure contributes to meeting the objectives of SDG 5.

But what do we mean by “sustainable infrastructure”? First, while they offer solutions to sustainable development, infrastructure assets can have negative impacts. For example, infrastructure is responsible for more than 60% of global greenhouse gas (GHG) emissions. 6 The construction of large infrastructure assets, such as dams and railways, can disrupt and displace communities.

Sustainable infrastructure therefore needs to be planned, designed, delivered, managed and decommissioned to minimise its negative impacts and maximise its positive impacts. Meanwhile, infrastructure assets—throughout their entire lifecycle—should have positive impacts on the economy, society and the environment.

In this essay, Chapter 1 discusses the benefits of infrastructure, Chapter 2 examines the barriers to delivering sustainable infrastructure, and Chapter 3 highlights solutions and best practices.

The dividends

Delivering economic gains.

Investments in infrastructure will be instrumental in meeting the SDGs. By creating jobs and economic activity, infrastructure enables development. It also provides the services that underpin the ability of people to be economically productive, for example via transport. “The transport sector has a huge role in connecting populations to where the work is,” says Ms Marchal.

Infrastructure investments help stem economic losses arising from problems such as power outages or traffic congestion. The World Bank estimates that in Sub-Saharan Africa closing the infrastructure quantity and quality gap relative to the world’s best performers could raise GDP growth per head by 2.6% points per year. 7

In the US, it is estimated that about 63m full-time jobs in industries such as tourism, retail, agriculture and manufacturing depend on the quality, safety and reliability of transport infrastructure. 8 And McKinsey Global Institute analysis suggests that increasing infrastructure investment by 1% of GDP could create major new job opportunities across the world (see chart 1). 9

The failure of infrastructure is also a useful indicator of its economic value. For example, in 2013, when the Dawlish sea wall in south-west England was destroyed during storms, the repairs to the wall itself cost £35m, but the loss of a critical transport connection to the south west of England was estimated to cost the UK economy £1.2bn. 10

Infrastructure itself can also become more economically productive. The McKinsey Global Institute estimates that increasing the productivity of infrastructure can cut spending needs by 40%. Steps it recommends include optimising portfolios to avoid investing in projects that fail to meet needs or deliver sufficient benefits, streamlining processes, and implementing measures that increase the performance of existing assets. 11

Protecting the natural environment

From renewable energy to transport systems, the environmental benefits of infrastructure are manifold. For example, in the US, estimates are that if someone commuting 20 miles a day switches from driving to public transportation, it would lower their carbon footprint by 4,800 pounds annually. 12 Sustainable infrastructure assets can help to address climate and natural disasters, reduce greenhouse gas emissions and contamination, manage natural capital, and enhance resource efficiency. “The infrastructure built in the next five years will determine how we meet the Paris climate goals,” says Ms Marchal. “It’s a threat but also a huge opportunity for countries to leapfrog to infrastructure that is fit for climate.”

Professor Hall cites transportation as a tool in fossil-fuel reduction. “The transport sector needs to be largely electrified,” he says. “Whether you bank on electric vehicles or invest in mass transport in urban areas, it’s fundamental.”

Technology will facilitate significant environmental gains. In power infrastructure, for example, smart meters allow energy utilities to manage consumption patterns, creating price incentives to use electricity outside peak times, enabling them to reduce reliance on the more polluting “peaker plants” that supplement supply at peak demand times and that usually generate power using fossil fuels. 13

Integrating green infrastructure such as trees, plantings and forests into the portfolio of assets can improve air quality and contribute to removing carbon dioxide from the atmosphere or, in the case of mangroves, increasing flood protection and preventing soil erosion. Green roofs act as giant sponges, soaking up stormwater before it pollutes rivers and lakes, assist with flood control and, collectively, can reduce temperatures in cities during the summer. For example, one simulation study found that covering half of the available surfaces in downtown Toronto with green roofs would cool the city by up to 2˚C in some areas. 14

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However, Professor Hall argues that efforts to increase investments in green infrastructure should not eclipse work to ensure that traditional infrastructure is sustainable. This includes addressing the emissions created by constructing and operating infrastructure. Erecting and running buildings, for example, consumes 36% of the world’s energy and produces some 40% of energy-related carbon emissions, according to estimates by the International Energy Agency, a research group. Meanwhile, while regulations are being introduced in many countries to reduce the environmental impact of construction, emissions generated by existing infrastructure must also be managed. In the developed world, for example, only about one in 100 buildings is replaced by a new one every year. 15

“If we focus only on green infrastructure, we lose sight of the amount that’s being spent on grey infrastructure and the potential for locking in patterns of development that may or may not be sustainable,” Professor Hall says.

Underpinning social progress

From schools, hospitals and roads to power and water networks, sustainable infrastructure enables governments and the private sector to provide services that contribute to sustainable individual livelihoods, as well as broader economic growth, while improving quality of life and enhancing human dignity. As part of this, ensuring equitable access to these services is critical, an aspiration enshrined in many of the SDGs, which call for basic services such as health, education, shelter, water and sanitation to be available to all.

When it comes to gender equality, infrastructure plays an important role, both protecting women and accelerating their advancement. For example, public transport systems both enable women to enter the workforce but also, when well designed, provides them with safety and security and ensures that they have equal access to opportunities and services.

Sanitation infrastructure is also crucial in ensuring equal participation in economic and education opportunities. If safe toilets or private hygiene facilities in schools or workplaces are unavailable, during menstruation women and girls are often forced to stay at home or leave school or their jobs altogether. The World Bank estimates that at least 500m women and girls globally lack adequate facilities for menstrual hygiene management. 16

This can also be harmful to women and girls. “Maternal mortality rates are affected by the quality of water and hygiene. And it tends to be the girls who don’t go to school because they have to go and fetch water,” says Ms Fay. “Services do have these differential impacts on gender.”

Infrastructure is a tool in increasing social mobility. For example, introducing solar power to Sudan and Tanzania in schools enabled an increase in completion rates at primary and secondary schools from less than 50% to almost 100%. 17

Morgan Landy, senior director of global infrastructure and natural resources at the International Finance Corporation (IFC), argues that infrastructure’s social impact is rising up the agenda. “If you are going to have a wind power project you need to bring a community lens to that to make sure the benefits are shared,” he says. “That’s the future. The environmental side will always be strong, but the next frontier will be social impact.”

The role of resilience

Infrastructure that can withstand the shocks and stresses experienced over its lifetime provides resilience and protects development by having a positive impact across all three pillars of sustainability.

Resilient infrastructure protects the economy by reducing disruptions to industry from shocks, such as severe storms. Similarly, when resilient infrastructure ensures the continuity of critical services such as power and water during a crisis, it offers greater stability to communities and reduced disruption to their livelihoods. “During hurricanes in the Caribbean, you lose particular bridges,” says Graham Watkins, principal environmental specialist in the climate change division of the Inter-America Development Bank (IDB). “So if you strengthen those bridges that are critical, you can maintain conduits and people suffer less.”

If infrastructure has to be less frequently rebuilt or repaired, governments not only save money—they also need to use fewer natural resources. Moreover, using green infrastructure to protect against climate-related floods and intense storms helps communities adapt to the effects of climate change. Examples range from street plantings, parks and green roofs in cities to wetlands and mangrove forests, which protect coastal communities from storm surge and sea-level rise.

Japan is well recognised for its ability to build highly resilient infrastructure that can withstand frequent or severe earthquakes. This includes the construction by many towns and cities of new energy infrastructure based on micro-grids—groups of interconnected and distributed energy resources that act as single, controllable entities—and decentralised power sources. Supporting such developments is the country’s National Resilience Programme, established in the wake of the 2011 earthquake and tsunami. 18

However, Ms da Silva stresses that resilient infrastructure goes beyond the assets explicitly designed for the protection and mitigation of disasters to all systems that support society—such as energy, transport and water—and how they connect with each other.

“When you look at the definition of critical infrastructure, it is critical if, when it fails, it has a severe detrimental effect on human wellbeing and economic development,” says Ms da Silva, who leads the Resilience Shift, an initiative supported by the Lloyds Register Foundation to raise awareness of the need for infrastructure to be resilient and develop new approaches that will drive changes to current practice.

“Given the complexity of modern infrastructure and the pressures on infrastructure systems due to increasing demand, ageing and/or climate change, failure is a possibility,” she says. “So infrastructure has to be resilient or it’s going to have a severe effect on society.”

The Challenges

Growing demand.

As the world’s population expands, delivering basic services will become increasingly challenging. And as more and more people live in cities, pressures on urban infrastructure are becoming intense. By one estimate, infrastructure investment of up to US$3.2trn-US$3.7trn per year is needed between now and 2030. 19 Infrastructure investment gaps are already an issue in many emerging and developing markets, totalling US$452bn over 2014-20, with actual spending of an estimated US$259bn dwarfed by requirements of US$711bn (see chart 2).

The G20-backed Global Infrastructure (GI) Hub estimates that investments of US$94trn in infrastructure will be needed by 2040. More than half of these investment needs are in Asia, according to GI Hub. At US$28trn, representing 30% of global infrastructure investment needs, China will have the greatest demand over this period.

Some of the gaps look daunting. Take water and sanitation infrastructure. In 2015 some 844m people lacked even a basic drinking-water service, according to the World Health Organisation, and at least 2bn people were using drinking water sources contaminated with faeces. 10

Meanwhile, if current spending trends continue, the US—where an estimated US$3.8trn needs to be invested in infrastructure 21 —is forecast to have the world’s biggest spending gap to 2040, according to the GI Hub. 22 This imposes a high price on Americans, with one estimate that the cost to the average motorist of poor road infrastructure is US$599 annually, or US$130bn nationally in repair costs, accelerated vehicle deterioration and depreciation, increased maintenance, and additional fuel consumption. 23

The increasing risks and vulnerabilities brought about by climate change will also increase pressure to upgrade infrastructure and repair or replace assets damaged during extreme weather. For example, tens of billions of dollars of damage to infrastructure in New York and New Jersey was caused by Hurricane Sandy in 2012, prompting the creation of the Hurricane Sandy Rebuilding Task Force. 24

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Funding and resource gaps

Given the rate at which governments need to build infrastructure, many will struggle to secure the financing to meet demand. Tight public-sector budgets, particularly in developing countries, mean governments will need to tap into some of the trillions of dollars in global capital markets.

Yet the many risks to infrastructure investments, from complex permitting and potential construction delays to the large amount of time before assets generate cash flow and produce a return on investment, deter private investors. Of the more than US$120trn in assets under management by banks and institutional investors globally, infrastructure makes up only about 5%. 25

Moreover, for assets that deliver public good, it is often hard to find a business model that would generate the kinds of financial returns private investors seek. “In some cases, it’s easy to leverage private-sector funding,” says Ms Marchal. “With power plants, you have the regular flow that makes it financially sustainable, but water is much more difficult to monetise.”

Meanwhile, countries often lack human resources with the required skills to plan, deliver and manage sustainable, resilient infrastructure at the scale required to meet demand, particularly in developing countries, where the lion’s share of the world’s infrastructure gaps exist.

“There just aren’t enough engineers, town planners and technical specialists in many of the countries that are aiming to fill their infrastructure gaps,” says Mark Harvey, head of profession (infrastructure) at the UK’s Department for International Development (DFID). “So capacity is money but it also means having technical expertise and staff to manage projects, finance and procurement.”

He argues that much of the skills development needs to take place in government. “We still have around 85% of infrastructure globally funded through public resources and there’s not as much attention paid to building that capacity as there should be,” he says. 26

In many cases it is weak governance that exacerbates the shortage of skills, with the codes and regulations that are needed to shape hiring and training decisions lacking.

Questions of governance

A number of governance hurdles exist to the development of sustainable infrastructure, including the short-termism in policy development created by election cycles, lack of appropriate legislation, codes and standards, and lack of capacity.

Given the sums of money involved, lack of transparency and corruption often accompany the development of infrastructure assets. And even if outright graft is not involved, infrastructure can be shaped by the motives of those developing it. “Politicians are fond of vanity projects,” says Professor Hall. “Infrastructure provides big opportunities for rent-seeking, and the number of white elephants and grossly over-budget or underperforming infrastructure projects around the world is disturbing.”

For governments, there can also be competing priorities. Developing countries may put rapid economic growth ahead of environmental and social protection. Linking the different elements of sustainable development is harder because of the silos that exist within government and between those executing different stages of infrastructure, from planning and delivery to operation and maintenance. “Institutions are set up with their own vertical silos, and crossing those is not so easy,” says Mr Landy.

Even within infrastructure sectors, silos exist. “Within the water sector, for instance, you have a whole raft of different people and institutions, some private some public, responsible for different aspects of water,” says Ms da Silva. “You’ll have an environmental agency worrying about flood risk and a water company worrying about potable water.”

Often infrastructure investments meet single goals, rather than taking into account all stakeholders in society and the environment. For example, infrastructure focused on mitigating climate change, such as large hydro power plants or wind turbines, may meet resistance from indigenous groups or other local communities fearing disruption or loss of their land. “Even if you have some aspects of sustainability, you’re tripping over other ones,” says the IDB’s Mr Watkins. “Unless you take the whole integrated package, it’s going to slow your delivery.”

The Way Forward

From new forms of finance to the use of digital technologies, new approaches to sustainable infrastructure are emerging. Equally important are efforts to move away from treating infrastructure projects as individual investments and to view them as part of a system that comprises a portfolio of interlinked assets that provide essential services for society. “We talk about bridges and roads when we should be talking about mobility, connectivity and ensuring the flow of goods, services and people,” says Ms da Silva.

Harnessing innovative finance

While public-sector budgets may be insufficient to finance the infrastructure governments need to build, some are finding new ways to tap into the global capital markets and encourage more private-sector investment in the sector. For example, using concessional climate finance from sources such as the Green Climate Fund and the Climate Investment Funds, it is possible for governments to assume a first loss position, reducing risk for private investors. 27

The growing interest in impact investing (investments that generate both financial and social and environmental returns) and use of ESG (environmental, social and governance) considerations to prioritise investments could also unleash new streams of funding for infrastructure. This growing enthusiasm is reflected in the gradual rise of the green bond market in recent years (see chart 3).

Because impact investors—from individuals to institutions—are often prepared to invest with longer time horizons or accept lower than market-rate returns for increased impact, they could play a particularly important part in financing sustainable infrastructure.

Policymakers can pave the way for these kinds of investments. For example, in the US the NY Green Bank was set up in 2014 by the State of New York to increase capital flows into the clean energy market. The bank has developed the expertise to identify clean energy projects and, since many involve untested business models or emerging technologies, to assess their risk, making it easier to attract investors to these projects.

However, some argue that accessing more capital is not the only answer to sustainable infrastructure, particularly in developing countries. “We tend to focus on finding more financing to be able to spend more as opposed to being able to spend better,” says the World Bank’s Ms Fay. She argues that it is more cost-effective to improve planning and procurement. “In many cases, countries could get more out of the financing they do have,” she says.

Countries can also tap into existing legislation to increase private-sector investment in sustainable infrastructure. Washington, DC, for example, has regulations that require developers in certain districts to incorporate into their developments green infrastructure (such as parks, grass roofs and plantings), which soaks up untreated stormwater, preventing it from polluting rivers and other waterways. 28

If installing green infrastructure is not feasible, developers can purchase stormwater retention credits from those that have invested in green infrastructure in areas not covered by the regulations. 29 The project not only demonstrates the effectiveness of green infrastructure in reducing the harmful effects of severe storms. It also offers an innovative financing mechanism to accelerate the investment into these green systems.

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Tropical Landscapes Finance Facility, Indonesia

Financing sustainable infrastructure often requires cross-sector collaboration. This is the case in Indonesia, where a financing facility is bringing together a number of global public- and private-sector stakeholders to foster investments in renewable energy and improved management of forests, biodiversity and ecosystem restoration services throughout the country.

The Tropical Landscapes Finance Facility (TLFF) was launched in October 2016 by the Indonesian government and is a partnership between UN Environment, the World Agroforestry Centre, ADM Capital and BNP Paribas.

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With two sources of capital—a lending platform run by ADM Capital and BNP Paribas and a grant fund run by UN Environment and the World Agroforestry Centre—the TLFF provides technical assistance and co-funds early stage development costs enabling donors and foundations to harness private-sector funding. 30

Filling the project pipeline

In many countries, the biggest challenge to infrastructure development is in the pipeline of viable projects. “One of the problems with sustainable infrastructure is that there are just not enough bankable projects in the market, especially in the poorest countries,” says Mr Landy.

The problem is felt in different ways. First, the ability to develop a pipeline of viable projects—a strategic set of projects that governments plan, prioritise and implement—is often lacking. Countries need to build “upstream planning”, which enables them to identify the projects that will most help them to meet their development targets. And inability to do this makes it hard to create a pipeline of projects and encourage private-sector investors to participate.

To address the pipeline problem, the UK Infrastructure Transitions Research Consortium (ITRC), a consortium of seven leading UK universities, led from the University of Oxford, is working to support infrastructure planning in the US, Australia and the Netherlands. The ITRC has created a process for developing long-term strategies for national infrastructure that includes a modelling platform and database called NISMOD (the National Infrastructure Systems Model) that will enable academia, industry and policymakers to access infrastructure datasets, simulation and modelling results. 31 A similar tool, NISMOD-Int, will be applicable in developing countries. 32

Second, the project lifecycle—from feasibility studies to design, delivery and operation—is hampered by lack of capacity. As part of World Bank Group’s efforts to address this gap, it has established a US$150m global infrastructure project development fund called InfraVentures, designed to ensure more projects become a reality.

However, filling the project pipeline usually requires more than funding. This is something InfraVentures takes into account, explains Mr Landy. He cites its work as a co-developer of the Nachtigal Hydropower project in Cameroon, supporting the country’s goal to extend access to electricity to 88% of the population by 2022. 33 “We put on a venture capital hat,” he says. “We also spent 2,000 hours of IFC environmental specialist time looking at the project to make sure it was being designed to meet our standards, and that we were baking into the design things we want to see as an investor.”

Global Infrastructure Project Pipeline

To help governments attract private-sector funding for their infrastructure projects, the G20’s Global Infrastructure (GI) Hub has created a free digital platform providing details of government infrastructure projects across the world.

Launched in 2016, the Global Infrastructure Project Pipeline platform allows potential investors to search for projects at different stages, from the initial government announcement and feasibility studies to projects that are in the final stages of construction or already in operation.

The idea behind the platform is to give private-sector investors detailed information on potential projects and enable them to track the projects as they move from design to operation. By providing free access to this information, the GI Hub aims to make it easier for investors to evaluate investment opportunities in public infrastructure across a wide range of jurisdictions and markets. 34

Blending green and grey

Great potential is seen in green infrastructure, which can both mitigate the effects of climate change and help society to adapt to climate change through the restoration of wetlands and floodplains or the installation of grass roofs, rain gardens, parks and street plantings in cities.

Green infrastructure can often lower the cost of infrastructure development compared with traditional grey infrastructure. For example, research conducted on the cost-savings associated with the green infrastructure investments of Lancaster, a city in south central Pennsylvania in the US, found that the green infrastructure plan would deliver an estimated US$120m in savings over 25 years compared with grey infrastructure. 35

Natural infrastructure can also be combined with traditional grey infrastructure. For example, in south-western Pennsylvania, frequent rainfall and ageing sewer infrastructure are degrading waterways and posing threats to human health. Rather than expensive expansion of the underground pipes and tanks that convey wastewater to sewage treatment facilities, it is deploying green infrastructure approaches—from permeable paving to bioswales (vegetation and layers of gravel and soil that slow stormwater movement and filter pollutants) to manage stormwater where it falls. 36

In New York, a plan called BIG U developed by the Bjarke Ingels Group in the wake of Hurricane Sandy is designed to protect the city from flooding by creating a series of levees, a floodwall and a park that would not only help protect the island from inundation but would also provide a new green space for residents. 37

And in San Francisco, as the Public Utilities Commission upgrades its sewer system over the next 20 years, it will use infrastructure that is both green (natural management tools that reduce stormwater impacts and beautify neighbourhoods) and grey (upgrades to pipes and treatment plants for reliability, resiliency and regulatory compliance).

Making infrastructure smart

In the move to create sustainable infrastructure, building information modelling (BIM), sensors, big data and machine learning will be increasingly important tools, improving the planning of new assets and the retrofitting of existing ones, increasing infrastructure’s operational efficiency and reducing its environmental impact. Smart infrastructure—which combines physical with digital infrastructure—improves the quality, speed and accuracy of decision-making while generating cost savings.

For example, 3D visualisation and BIM software enable planners to consider different design alternatives and take into account the impact of conditions, such as local climate, before starting construction. Meanwhile, advances in virtual and augmented reality as well as computer simulations and BIM are enabling engineers and architects to visualise designs at an early stage to model their resilience to climate shocks and measure their impact on the environment. 38

“Systems of digital modelling enable you to plan and design infrastructure assets before they get built, and you can then monitor how that infrastructure performs and behaves when it is used,” says DFID’s Mr Harvey. “Big data can tell us how people are behaving in relation to that infrastructure. And when you put these together, that’s powerful for improving performance, value for money and sustainability.”

Technology can also increase the environmental sustainability of existing assets while cutting costs associated with maintenance. This is the aim of Singapore’s WaterWiSe system. Using a combination of hardware and software, the system monitors in real time the city’s water distribution network. Sensors track indicators, such as pressure, flow rate, pH levels, turbidity and dissolved organic matter. The system enables quicker detection of leaks or burst pipes and facilitates long-term planning for maintenance and system expansion. 39

Smart technologies not only get more out of key assets—they make infrastructure a more appealing investment opportunity. According to the University of Cambridge’s Centre for Smart Infrastructure & Construction, smart infrastructure is worth up to £4.8trn globally. 40

Smart sustainable infrastructure does not necessarily require sophisticated technologies, but can also be the result of smart planning. In some cases, creative thinking can avoid substantial costs. For example, to cope with rapid growth of the Brazilian city of Curitiba, planners had originally called for the construction of a subway system. Instead, the city pioneered the development of bus rapid transit (BRT) systems, where buses run along dedicated routes not used by other vehicles, avoiding the high cost of building a subway network. 41

Improving transparency

Given the traditionally poor transparency in the infrastructure sector and the opportunities it offers for corrupt practices, international attention has focused on increasing visibility into how funds spent on infrastructure are distributed. “Corruption is the biggest obstacle to sustainable development,” Neill Stansbury, director of the Global Infrastructure Anti-Corruption Centre, told delegates at the recent Global Engineering Congress in London. “The infrastructure sector and engineering are probably one of the biggest areas where corruption takes place internationally because of the amount of money which is spent on it.” 42

A number of initiatives are emerging to tackle the problem. For example, in 2012 CoST—the Infrastructure Transparency Initiative, also known as the Construction Sector Transparency—was launched with the support of the World Bank to encourage the disclosure, validation and interpretation of data from infrastructure projects. Working with governments, industry and civil society, CoST promotes reforms that can reduce mismanagement, inefficiency and corruption in building projects. 43

“Transparency and open procurement [are] critical if governments are to persuade the private sector to invest in infrastructure,” says the OECD’s Ms Marchal. “You need to provide ongoing monitoring and reviewing of the efficiency of public-private partnerships in the process and to implement safeguards to avoid corruption.”

Professor Hall points to Nigeria as an example of good practice. “The Infrastructure Concession Regulatory Commission has made all the contracts for public-private partnership concessions publicly available,” he says. “That serves the purpose of transparency, but it also helps competition because concessionaires are aware of the prices that their successful competitors are bidding.”

In some cases, capacity-building initiatives can also increase transparency. For example, the Africa Infrastructure Development Association (AfIDA)—part of the Africa Finance Corporation (a development finance institution)—was set up to foster increased project development activities in Africa. The AfIDA does this is by creating standardised project development template documents, fostering knowledge-sharing between members, and setting ethical and professional standards—measures that also serve to increase transparency. 44

Similarly, the International Infrastructure Support System, an online tool developed by the Sustainable Infrastructure Foundation and the Asian Development Bank gives countries templates on which to prepare projects, and enables project teams to work together online—but it also has features that enable the sharing of information with investors and the public. 45

Managing infrastructure

Increased climate uncertainties, growing demand and tightening finances all demand a more flexible, adaptive approach to infrastructure development than has been seen in the past. “People are increasingly focusing on how different kinds of infrastructure interrelate to create systems of infrastructure,” says Mr Landy.

He sees much of the progress on this front taking place in cities. “Thoughtful mayors are working across those boundaries and pushing their systems to connect the dots,” he highlights.

A systems approach also means looking at infrastructure from more than one angle. For example, with their extremely high temperatures, cement plants can be used as incinerators if municipalities locate waste-management facilities near them. Fibre optic cables can be run along rail lines. Lampposts equipped with sensors and motion detectors can monitor and manage traffic and pollution and save energy by illuminating only when a vehicle or pedestrian approaches.

This systems approach demands strong institutions, the breaking down of silos need and the de-linking of planning from political cycles. Part of this means putting in place long-term strategies, such as the Investing in Canada infrastructure plan, the objectives of which are to create long-term economic growth, to support a low-carbon, green economy and to build inclusive communities. 46

Others have established dedicated infrastructure departments designed to work across political cycles. In Australia, the latest incarnation of such a dedicated department is called Department of Infrastructure, Regional Development and Cities (founded in 2017). And in 2015, the UK launched an independent National Infrastructure Commission (see case study). 47 “If we could begin to replicate that sort of thinking in some of the countries where we work, that would be no bad thing,” says DFID’s Mr Harvey.

“Infrastructure involves resource allocation and decisions about building things in people’s backyards, so you can’t depoliticise it,” argues Professor Hall. “But these are more technocratic bodies that also have a mandate to look for the long term and to bridge different political administrations so you don’t get the stop-start of projects whenever there’s a change of government.”

Establishing an integrated cross-sector planning process and a long-term national plan has another advantage: increasing market confidence, making it easier to attract private-sector financing and supporting the creation of a project pipeline of viable and bankable projects.

Future-proofing infrastructure

Recognising the importance of infrastructure and adopting a systems approach is what will underpin the resilience not only of infrastructure itself but also of society and the planet. “One side of the sustainable development agenda is linked to one planet-living and finite resources,” says Ms da Silva. “The other side is about resilience. But over the past decade, we’ve become more aware of how complex and interconnected the world is, how much uncertainty is out there, whether it’s climate change or economic downturns like 2018, and how we’re all interconnected. We cannot predict the future, but the ability for critical infrastructure to continue to function and provide essential services for society whatever happens is what matters.”

First, because infrastructure assets may need to be in place for decades, it is critical to “future-proof” those assets. This can be done by anticipating changes in climate, use patterns and growth in demand over their lifecycle as well as by building in flexibility and the potential to add capacity over time.

London’s Thames Estuary 2100 strategy, to manage tidal flood risk in the Thames estuary over the next 100 years is one example of infrastructure design that uses an adaptive capacity approach to not only current risks but also future climate adaptation. Milestones and reviews are scheduled at defined points, along with a plan for how to enhance capacity of not only a specific flood barrier but also of the wider system over the next century. 48

Ms da Silva argues that this approach—looking at resilience within and between critical infrastructure sectors—has yet to become widespread. Developing resilience, she says, means not only thinking about how to deliver services but also how to prevent collapse. “It’s a mind shift and one of the fundamental shifts is to contemplate failure,” she says. “Resilience engineering is about ensuring that assets can continue to function even if all sorts of things happen. It’s designing for the ordinary and then thinking about the extraordinary.”

The UK’s National Infrastructure Commission

Countries often struggle to disentangle infrastructure plans from other national and private-sector interests and implement plans beyond election cycles. Launched in 2015, the National Infrastructure Commission is designed to address such challenges. “It’s still set up through political and democratic processes, but its intention is to get the politics out of long-term infrastructure investment,” explains Mark Harvey, head of profession (infrastructure) at the UK’s Department for International Development.

The commission provides the government with impartial expert advice on major long-term infrastructure challenges. It assesses the UK’s national infrastructure assets and needs, and the technologies that may change over time. At the start of each five-year parliament, it produces a report with recommendations for infrastructure project priorities. 49

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Seen individually, sustainable infrastructure assets perform an essential role in providing people with the services they need, improving quality of life and protecting the environment. Some of this is delivered through construction of new infrastructure. However, creative ways can be found of making current systems more efficient—through smart meters, for example—without the need for disruptive and resource-intensive new construction.

Ensuring that infrastructure is sustainable also means approaching it not as a series of assets but as a system. For example, cities that are well equipped with public transport systems increase social mobility and equality, making it easier for people to go to school, work and access healthcare services. Shifting energy sources from coal-fired power generation to renewables not only cuts greenhouse gases but also reduces air pollution, improving health.

A systems approach to infrastructure can also deliver cost savings or avoid unnecessary expenditure, such as the construction of highways to borders with countries where trade agreements have yet to be secured or micro-grid solutions have yet to be developed in rural areas where people cannot afford to purchase electricity. Smart investments in public transit systems can reduce the need to build more roads, as is the case in Curitiba’s BRT systems.

Treating infrastructure as an interlinked portfolio of assets also enables more to be done to build resilience into the system. For instance, this can involve combining green and grey infrastructure while creating assets, such as parks, that not only contribute to clean air and stormwater retention but also provide public amenities that improve quality of life, as is the case in Washington, DC, where the stormwater retention programme fosters the development of parks that can be used for recreation.

The need to build resilient and sustainable infrastructure is urgent. Climate change is already disrupting life on the planet, something that is unlikely to change even if the world manages to achieve its climate goals. In the face of increasing risks to communities and their environments, resilient infrastructure will play a key role in shoring up energy and water systems and ensuring that communities can survive shocks and recover from them more quickly. In doing so, infrastructure is not just a means of delivering services; it is a critical enabler and guardian of sustainable development.

  • 1 McKinsey Global Institute, Bridging global infrastructure gaps, June 2016,  https://www.un.org/pga/71/wp-content/uploads/sites/40/2017/06/Bridging-Global-Infrastructure-Gaps-Full-report-June-2016.pdf
  • 2 Center for Climate and Energy Solutions, Reducing Your Transportation Footprint,  https://www.c2es.org/content/reducing-your-transportation-footprint/
  • 3 The New Climate Economy, The Sustainable Infrastructure Imperative, 2016,  https://newclimateeconomy.report/2016/
  • 4 World Bank, The Costs of Meeting the 2030 Sustainable Development Goal Targets on Drinking Water, Sanitation, and Hygiene: Summary Report, January 2016,  https://openknowledge.worldbank.org/bitstream/handle/10986/23681/K8632.pdf?sequence=4
  • 5 UNDP, Financing Solutions for Sustainable Development, Goal 7: Affordable and clean energy,  http://www.undp.org/content/sdfinance/en/home/sdg/goal-7–affordable-and-clean-energy.html
  • 6 World Economic Forum, Could infrastructure investment help tackle climate change?, February 2016,  https://www.weforum.org/agenda/2016/02/could-infrastructure-investment-help-tackle-climate-change/
  • 7 World Bank, Why We Need to Close the Infrastructure Gap in Sub-Saharan Africa, April 2017,  http://www.worldbank.org/en/region/afr/publication/why-we-need-to-close-the-infrastructure-gap-in-sub-saharan-africa
  • 8 TRIP,Bumpy Roads Ahead: America’s Roughest Rides and Strategies to Make Our Roads Smoother, 2016,  http://www.tripnet.org/docs/Urban_Roads_TRIP_Report_October_2018.pdf
  • 9 McKinsey Global Institute, Infrastructure productivity: How to save $1 trillion a year, January 2013,  https://www.mckinsey.com/~/media/mckinsey/industries/capital%20projects%20and%20infrastructure/our%20insights/infrastructure%20productivity/mgi%20infrastructure_executive%20summary_jan%202013.ashx
  • 10 The Resilience Shift, Critical Infrastructure Resilience Understanding the landscape, July 2018,  https://www.resilienceshift.org/wp-content/uploads/2018/10/Critical-infrastructure-resilience_RevA_Final_011018.pdf
  • 11 McKinsey Global Institute, Infrastructure productivity: How to save $1 trillion a year, January 2013,  http://www.mckinsey.com/insights/engineering_construction/infrastructure_productivity
  • 12 Center for Climate and Energy Solutions, Reducing Your Transportation Footprint,  https://www.c2es.org/content/reducing-your-transportation-footprint/
  • 13 Longe O M et al, “Time programmable smart devices for peak demand reduction of smart homes in a microgrid”, conference paper, March 2015,  https://www.researchgate.net/publication/283101576_Time_programmable_smart_devices_for_peak_demand_reduction_of_smart_homes_in_a_microgrid
  • 14 Pompeii II, W C, Assessing urban heat island mitigation using green roofs: A hardware scale modeling approach, Shippensburg University thesis, May 2010,  https://www.ship.edu/globalassets/geo-ess/pompeii_thesis_100419.pdf
  • 15 “Home truths about climate change”, Economist ,January 3rd 2019 
  • 16 “Menstrual Hygiene Management Enables Women and Girls to Reach Their Full Potential”, World Bank, May 25th 2018,  https://www.worldbank.org/en/news/feature/2018/05/25/menstrual-hygiene-management
  • 17 UNDESA, Electricity and education: The benefits, barriers, and recommendations for achieving the electrification of primary and secondary schools, December 2014,  https://sustainabledevelopment.un.org/content/documents/1608Electricity%20and%20Education.pdf
  • 18 “The Resilience Programme: Changing Japan’s grid”, Power Technology, February 19th 2018,  https://www.power-technology.com/features/resilience-programme-changing-japans-grid/
  • 19 World Bank, “Infrastructure Investment Demands in Emerging Markets and Developing Economies”, September 2015,  http://documents.worldbank.org/curated/en/141021468190774181/pdf/WPS7414.pdf
  • 20 WHO, Drinking-water, fact sheet, February 2018,  https://www.who.int/en/news-room/fact-sheets/detail/drinking-water
  • 21 The United States, GI Hub:  https://outlook.gihub.org/countries/United%20States
  • 22 “Infrastructure demand: A major global challenge”, GI Hub blog,  https://www.gihub.org/blog/global-infrastructure-demands/
  • 23 TRIP, Bumpy Roads Ahead: America’s Roughest Rides and Strategies to Make Our Roads Smoother, October 2018,  http://www.tripnet.org/docs/Urban_Roads_TRIP_Report_October_2018.pdf
  • 24 Hurricane Sandy Rebuilding Task Force, Hurricane Sandy Rebuilding Strategy, August 2013,  https://www.hud.gov/sites/documents/HSREBUILDINGSTRATEGY.PDF
  • 25 “Could infrastructure investment help tackle climate change?” World Economic Forum, February 2016,  https://www.weforum.org/agenda/2016/02/could-infrastructure-investment-help-tackle-climate-change/
  • 26 In developing countries the figure is 80-85%. See G20, “The G20 agenda on infrastructure financing – key concerns and actionable recommendations”, July 11th 2018,  https://civil-20.org/c20/wp-content/uploads/2018/07/C20-policy-paper_infrastructure-financing_.pdf.
  • 27 Meltzer, J, Blending climate funds to finance low-carbon, climate-resilient infrastructure, Brookings, June 2018,  https://www.brookings.edu/research/blending-climate-funds-to-finance-low-carbon-climate-resilient-infrastructure/
  • 28 CD Department of Energy & Environment, Stormwater Retention Credit Trading Program,  https://doee.dc.gov/src
  • 29 Ibid. 
  • 30 TLFF,  http://tlffindonesia.org/about-us/
  • 31 ITRC, NISMOD,  https://www.itrc.org.uk/nismod/
  • 32 ITRC, NISMOD-International,  https://www.itrc.org.uk/nismod/nismod-international/
  • 33 “Cameroon: World Bank Group Helps Boost Hydropower Capacity”, World Bank, July 19th 2018,  https://www.worldbank.org/en/news/press-release/2018/07/19/cameroon-world-bank-group-helps-boost-hydropower-capacity
  • 34 GI Hub News, December 6th 2016,  https://www.gihub.org/news/gi-hub-launches-project-pipeline/
  • 35 Environmental Defense Fund. Unlocking Private Capital to Finance Sustainable Infrastructure, 2017,  http://business.edf.org/files/2017/09/EDF_Unlocking-Private-Capital-to-Finance-Sustainable-Infrastructure_FINAL.pdf
  • 36 Washburn, M, Green infrastructure report status, University of Pittsburgh, March 2015,  https://www.iop.pitt.edu/sites/default/files/Reports/Status_Reports/Status%20Report%20-%20Green%20Infrastructure%20-%20March%202015.pdf
  • 37 Rebuild By Design, The BIG U,  http://www.rebuildbydesign.org/our-work/all-proposals/winning-projects/big-u
  • 38 Arup, Virtual and Augmented Reality changing the way we design and build infrastructure,  https://www.arup.com/perspectives/virtual-and-augmented-reality-changing-the-way-we-design-and-build-infrastructure
  • “From algorithms to virtual reality, innovations help reduce disaster risks and climate impacts”, World Bank blog, August 5th 2017,  http://blogs.worldbank.org/sustainablecities/algorithms-virtual-reality-innovations-help-reduce-disaster-risks-and-climate-impacts
  • “How Are Buildings and Infrastructure Changing in Response to Climate Change?”,  engineering.com
  • July 26th 2018,  https://www.engineering.com/BIM/ArticleID/17327/How-Are-Buildings-and-Infrastructure-Changing-in-Response-to-Climate-Change.aspx
  • 39 National Research Foundation, WaterWiSe,  https://www.nrf.gov.sg/innovation-enterprise/innovative-projects/urban-solutions-and-sustainability/waterwise-water-monitoring-system
  • 40 Bowers, K et al, Smart Infrastructure: Getting more from strategic assets, Centre for Smart Infrastructure & Construction,  https://www-smartinfrastructure.eng.cam.ac.uk/files/the-smart-infrastructure-paper
  • 41 “How Curitiba’s BRT stations sparked a transport revolution – a history of cities in 50 buildings, day 43”, The Guardian, May 26th 2015:  https://www.theguardian.com/cities/2015/may/26/curitiba-brazil-brt-transport-revolution-history-cities-50-buildings
  • 42 Institution of Civil Engineers, GEC 2018: Closing Plenary session, Day One, October 22nd 2018,  https://www.ice.org.uk/knowledge-and-resources/global-engineering-congress-2018/gec-2018-closing-plenary-session-monday
  • 43 CoST, Our story,  http://infrastructuretransparency.org/about-us/our-story/
  • 44 AfIDA,  https://www.afida-africa.org/about.php
  • 45 World Bank, The International Infrastructure Support System – A Project Preparation, Collaboration and Information Sharing Tool,  https://olc.worldbank.org/content/international-infrastructure-support-system-%E2%80%93-project-preparation-collaboration-and
  • 46 Infrastructure Canada, Investing in Canada Plan,  https://www.infrastructure.gc.ca/plan/about-invest-apropos-eng.html
  • 47 “Chancellor announces major plan to get Britain building”, UK government, October 5th 2015,  https://www.gov.uk/government/news/chancellor-announces-major-plan-to-get-britain-building
  • 48 Critical Infrastructure Resilience Understanding the landscape, The Resilience Shift, July 2018:  https://www.resilienceshift.org/wp-content/uploads/2018/10/Critical-infrastructure-resilience_RevA_Final_011018.pdf
  • 49 “Infrastructure at heart of Spending Review as Chancellor launches National Infrastructure Commission”, HM Treasury press release, October 30th 2015,  https://www.gov.uk/government/news/infrastructure-at-heart-of-spending-review-as-chancellor-launches-national-infrastructure-commission

Further reading

No resilience without preparedness.

More than 14 million deaths are estimated to have been directly or indirectly associated with the COVID-19 pandemic between 2020 and 2021.

Building health system resilience

A multitude of shocks—including the covid-19 pandemic, ongoing conflicts around the world, climate change and economic instability—have severely challenged global health systems in recent years.

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Clean Energy Infrastructure Funding Opportunity Announcements

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DE-FO2-0003126: Wholesale Electricity Market Studies and Engagements

The U.S. Department of Energy (DOE) is issuing, on behalf of the Grid Deployment Office (GDO), this Funding Opportunity Announcement (FOA). Awards made under this FOA will be funded, in whole or in part, with funds authorized under the Consolidated Appropriations Act, 2023 (Public Law 117-328).

Creating more efficient and flexible wholesale markets that will support a more resilient and reliable grid will be critical as new load and generation come online. Functioning wholesale markets provide a platform for energy trading and the integration of electric resources into the grid. Efficient, fair, and transparent market constructs are thus foundational to transitioning to a clean, reliable, equitable electric grid.

This FOA will assist applicants—States, ISOs/RTOs, and domestic entities that have partnered with States and/or ISOs/RTOs — that have formed partnerships with or otherwise include States, ISOs/RTOs to perform analytical studies on critical market issues or convene stakeholders to address issues facing developing or existing wholesale markets. GDO suggests five (5) broad priorities for proposed projects: 1) seams between markets, 2) regional resource adequacy, 3) market design and price formation, 4) regional footprint studies, and 5) integrated regional planning approaches.

Please see the full FOA document in the Documents section below.

Questions regarding the FOA must be submitted to [email protected].

The required Concept Paper due date for this FOA is 06/13/2024 at 5PM ET. The Full Application due date for this FOA is 08/22/2024 at 5PM ET.

In the event that an Applicant experiences technical difficulties with a submission, the Applicant should contact the eXCHANGE helpdesk for assistance ([email protected]).

Application Forms and Templates

The following forms and templates may be used as part of the application submission. Note that these forms and templates do not necessarily constitute all the documents required for a complete application. Please refer to the 'Application and Submission Information' of the published announcement to learn more about the required application content requirements.

Full Application

  • SF-424: Application for Federal Assistance and SF-LLL: Disclosure of Lobbying Activities

Contact Information

Frequently Asked Questions (FAQs)

Responses to questions are posted to the FAQs webpage .

Submission Deadlines

  • Concept Paper Submission Deadline: 6/13/2024 5:00 PM ET
  • Full Application Submission Deadline: 8/22/2024 5:00 PM ET
  • View Full Application Reviewer Comments Period: 9/27/2024 5:00 PM ET – 10/1/2024 5:00 PM ET

TPL-0000009: TREC Competitive DE-FOA-0003316 Teaming Partner List

DOE encourages eligible entities to team up on a single application in order to

(1) ease the administrative burdens associated with managing a federal grant,

(2) maximize the scope, reach, and level of ambition for the proposed projects and programs, and

(3) encourage sharing of capacity, knowledge, expertise, lessons learned and best practices across jurisdictions.

DOE is compiling a “Teaming Partner List” to facilitate the formation of new project teams for this FOA. The Teaming Partner List allows organizations who may wish to participate on an application to express their interest to other applicants and to explore potential partnerships. A teaming partner list may be used to facilitate the formation of new project teams for the announcement/topic area. The list allows organizations to express their interest and to explore potential partnerships, including representation from Minority Serving Institutions (e.g., Historically Black Colleges and Universities (HBCUs)/Other Minority Serving Institutions); and partnerships with Minority Business Enterprises, Minority Owned Businesses, Woman Owned Businesses, Veteran Owned Businesses, or tribal nations.”)

Updates to the Teaming Partner List will be available in the Infrastructure eXCHANGE website. The Teaming Partner List will be regularly updated to reflect new teaming partners who provide their organization’s information.

SUBMISSION INSTRUCTIONS: Users will see a new section, “Teaming Partners”, within the left-hand navigation in eXCHANGE. This page allows users to view published Teaming Partner Lists and any interested party that would like to be included on this list should submit a request within eXCHANGE to join the teaming partner list. Select the appropriate Teaming Partner List from the dropdown and fill in the following information: Investigator Name, Organization Name, Organization Type, Topic Area, Background and Capabilities, Website, Contact Address, General Email Address, and Contact Phone.

DISCLAIMER: By submitting a request to be included on the Teaming Partner List, the requesting organization consents to the publication of the above-referenced information. By facilitating the Teaming Partner List, DOE is not endorsing, sponsoring, or otherwise evaluating the qualifications of the individuals and organizations that are self-identifying themselves for placement on this Teaming Partner List. DOE will not pay for the provision of any information, nor will it compensate any applicants or requesting organizations for the development of such information. Please note that by submitting a request to be included on the Teaming Partner List, the requesting organization is not submitting an application for this opportunity.

Teaming Partners

To access the Teaming Partner List for the announcement, click here .

DE-FOA-0003360: Request for Information on Inflation Reduction Act Domestic Manufacturing Conversion Grants For Electrified Vehicles; Small And Medium Size Manufacturers

This is a Request for Information (RFI) issued by the U.S. Department of Energy’s (DOE) Manufacturing & Energy Supply Chains Office (MESC). This RFI seeks public input to help inform DOE’s implementation of the Inflation Reduction Act Automotive Conversion Program. The program will support automotive manufacturing domestic facility conversion for electrified vehicles as a continuation of Funding Opportunity Announcement DE-FOA-0003106. This program will focus on small- and medium-sized manufacturers (SMMs) via state-federal partnerships. This RFI contains 24 questions in the Purpose section. Respondents are not required to answer all questions.

  • Full Application Submission Deadline: 5/20/2024 5:00 PM ET
  • View Full Application Reviewer Comments Period: 5/20/2024 5:00 PM ET – 5/21/2024 5:00 PM ET

DE-FOA-0003316: The Inflation Reduction Act (IRA) Section 50123 established the State-Based Home Energy Efficiency Contractor Training Grants, Training for Residential Energy Contractors (TREC)

The purposes of this modfication are to:

1. Extend the Letter of Intent submission deadline on FOA page 1;

2. Revise the Letter of Intent submission process in FOA Section V.C; and

3. Increase the resume page limit in FOA Section V.D.iii.

The State-Based Home Energy Efficiency Contractor Training Grants, also known as the Training for Residential Energy Contractors (TREC) Program, seeks to accomplish three goals: (1) reduce the cost of training contractor employees by providing workforce development tools for contractors, their employees, and individuals including, but not limited to, subsidizing available training, testing certifications, and licenses for high-quality jobs; (2) provide testing and certifications of contractors trained and educated to install home energy efficiency and electrification technologies and deliver residential energy efficiency and electrification improvements; and (3) fund states to partner with nonprofit organizations to develop and implement a State sponsored workforce program that attracts and trains a diverse set of local workers to deliver the influx of new federally-funded energy efficiency and electrification programs—including the IRA-funded Home Efficiency Rebates Program, Home Electrification and Appliance Rebates Program (Home Energy Rebates Programs); and Energy Efficiency Home Improvement Credit.

This program was established by Section 50123 of the Inflation Reduction Act. For this competitive program, DOE is making up to $40 million in TREC funds available to states, territories, and the District of Columbia to complement the previously announced TREC formula funding.

Topic Area Description

Topic Area 1: Training Small Contractor Firms

State Energy Offices may use topic area one funding to train and certify small contractor firms and their employees to deliver energy efficiency and electrification improvements. DOE will fund States to support existing small contractor firms through training and certifications so that the contractor firm employees can deliver energy efficiency and electrification improvements eligible for rebates under the Home Efficiency Rebates Program or the Home Electrification and Appliance Rebates Program.

Topic Area 2: Innovative, Effective, and Equitable Workforce Development Programs

State Energy Offices may use topic area two funding to implement innovative, effective, and equitable workforce development program models that deliver contractor training program curriculum. States can collaborate with nonprofit organizations to design/enhance and implement workforce development, training, certification, and employment programs that train, test, and certify underrepresented populations, new entrants to the workforce, youth ages 17-25, incumbent workers, displaced workers, and contractors to conduct home energy efficiency and electrification improvements under the Home Energy Rebates Programs.

Webinar Details

  • [email protected]   FOA Questions and Answers (Q&A) Inbox
  • [email protected]   For technical issues with the eXCHANGE website
  • Letter of Intent Deadline: 6/7/2024 5:00 PM ET
  • Full Application Submission Deadline: 7/12/2024 5:00 PM ET
  • View Full Application Reviewer Comments Period: 7/31/2024 7:00 AM ET – 8/2/2024 5:00 PM ET

DE-FOA-0003026: Assisting Federal Facilities with Energy Conservation Technologies (AFFECT) Bipartisan Infrastructure Law (BIL) Advancing Net-Zero Federal Facilities

Modification 0004 - See the Modification table in the FAC. Changes from modification 0004 are highlighted in yellow.

Modification 0003 - See the Modification table in the FAC. Changes from modification 0003 are highlighted in yellow.

Modification 0002 - See the Modification table in the FAC. Changes from modification 0002 are highlighted in grey.

Modification 0001 - See the Modification table in the FAC. Changes from modification 0001 are highlighted in grey.

The Energy Policy Act of 1992 authorized the Secretary of Energy to establish a fund with the stated purpose of providing competitive grants to federal agencies to assist them in meeting the energy and water conservation requirements in Section 543 of the National Energy Conservation Policy Act (NECPA), as amended (42 U.S.C. § 8253). Through this authority, the U.S. Department of Energy (DOE) Federal Energy Management Program (FEMP) created the Assisting Federal Facilities with Energy Conservation Technologies (AFFECT) program to provide funding to federal agencies for the development of energy and water saving technologies and to meet federal mandates. Pursuant to 42 U.S.C. § 8256 (b)(3), FEMP will make selections and awards under this Federal Agency Call (FAC) through a competitive process, with agency applications evaluated against the Technical Review Criteria set forth in Sections V.A and V.C.

Section 40554 of the Infrastructure Investment and Jobs Act (IIJA), also known as the Bipartisan Infrastructure Law (BIL), authorized to be appropriated to the Secretary of Energy to provide grants authorized under section 42 U.S.C. § 8256 (b), $250 million for fiscal year 2022, to remain available until expended. FEMP intends to award the $250 million authorized under BIL through this AFFECT BIL FAC.

FEMP is seeking to make awards that support achievement of the Administration’s goals for federal leadership as described in Section 543 of NECPA, as amended through the Energy Act of 2020 (EA2020) and codified in 42 U.S.C. § 8253, Executive Order (E.O.) 14057, Catalyzing America’s Clean Energy Economy Through Federal Sustainability and E.O. 14008, Tackling the Climate Crisis at Home and Abroad .

This AFFECT BIL FAC seeks applications from federal agencies for projects that will create individual showcase facilities and/or multi-site deployment projects that contribute to a net-zero building portfolio. These showcase facilities and multi-site deployment projects will serve as models for future replicability and/or scalability to develop and continue a long-term net-zero building strategy. Applications are sought from federal agencies that are in alignment with the four Topic Areas:

Topic Area 1A: Assistance with Net-Zero Buildings Project Development

Topic Area 1B: Assistance with Net-Zero Buildings Program/Procedures Development

Topic Area 2: Modify Existing Projects for Net-Zero Buildings

Topic Area 3: New/In Development Net-Zero Buildings Projects

-----------------------------

Please see the full text for the FAC in the DOCUMENTS section below.

Questions regarding the FAC must be submitted to [email protected].

Answers to the questions will be posted to an excel spreadsheet found in the DOCUMENTS section below.

Submission Deadlines:

  Phase 1: Summer 2023  May 31, 2023
  Phase 2: Spring 2024  June 27, 2024
  Phase 3: Spring 2025  April 18, 2025

FEMP hosted an Informational Webinar on April 4, 2023, at 2:00 PM ET for DE-FOA-0003026. The associated slide deck is available below and the recording is available at: https://www.youtube.com/watch?v=HtrR3uOOb_Q

FEMP hosted a training on eProject Builder (ePB) Template for AFFECT on April 18, 2024, at 2:00 PM ET for DE-FOA-0003026. The slide deck is available below and the recording is available at: https://www.youtube.com/watch?v=kyqtJXVoHck . Questions related to this training and completion of the ePB Template for this FAC must be submitted to [email protected] .

FEMP hosted a Phase 2 Informational Webinar on May 14, 2024, at 11:00 AM ET for DE-FOA-0003026. The associated slide deck is available below and the recording is available at: https://www.youtube.com/watch?v=Vkl7WvxhhsY .

FEMP hosted a Applying for AFFECT Funding: Best Practices and Lessons Learned Webinar on June 5, 2024 at 12:30 PM ET for DE-FOA-0003026. The associated slide deck is available below and the recording will be posted soon.

  • [email protected]   For questions related to the Infrastructure Exchange website.
  • [email protected]   For questions related to this Federal Agency Call.
  • Full Application Submission Deadline: 6/27/2024 5:00 PM ET

DE-RD2-0003056: Inflation Reduction Act of 2022 (IRA) Assistance for the Adoption of the Latest and Zero Building Energy Codes

Modification 0002 - See the Modification table in the FOA document.

Modification 0001 - See the Modification table in the FOA document.

This Infrastructure Exchange instance is for applications for ROUND 2 of the subject Funding Opportunity Announcement. Round 1 of this opportunity is now closed for submissions in Infrastructure Exchange under record/FOA number DE-FOA-0003056 . Round 1 Concept Paper due date was 2/9/2024 and Full Application due date was 4/30/2024.

DE-FOA-0003056 Round 1 record is here: https://infrastructure-exchange.energy.gov/Default.aspx#FoaIda25503b3-faa7-4a9e-8216-579246093ec7

This opportunity is now open for Round 2 Concept Paper submissions until the deadline of 6/28/2024 at 5:00 PM ET. Due to system limitations, submissions for Round 2 Concept Papers and Full Applications will be accepted in Infrastructure Exchange under record/FOA number DE-RD2-0003056.

The Office of State and Community Energy Programs (SCEP) is issuing this Funding Opportunity Announcement (FOA). Awards made under this FOA will be funded, in whole or in part, with funds appropriated by Section 50131 of the Inflation Reduction Act (IRA) of 2022, Assistance for Latest and Zero Building Energy Code Adoption.

The Inflation Reduction Act of 2022 (IRA) provides up to $1 billion for States and units of local government with the authority to adopt building energy codes to adopt and implement the latest building energy codes, zero energy building codes, or equivalent codes or standards. An energy code is one of several types of building codes that help contribute to the overall health, safety, efficiency, and long-term resilience of buildings. Energy codes can be adopted directly as a standalone code, such as the International Energy Conservation Code (IECC), which is commonly adopted by States and local governments. Moreover, energy codes are also fundamental components of certain more broadly adopted building codes, including the International Building Code (IBC) and International Residential Code (IRC), which are referenced in the United States as “parental” codes. Energy codes are often described as a subset of these broader building codes, representing distinct chapters of the IBC and IRC alongside other commonly recognized provisions, such as those pertaining to structural, plumbing, or electrical requirements, and other basic aspects of building design and construction. Adoption and implementation of such codes supports the decarbonization of new and existing residential and commercial buildings.

This opportunity assists eligible entities in further decarbonizing their buildings through the adoption of the latest national model building energy codes, zero energy codes, other codes that deliver equivalent or greater energy savings, including innovative approaches to decarbonize existing buildings through certain measurable and enforceable requirements. The IRA is unprecedented in its opportunity to support sustainable change at the State and local level with respect to advancing the energy efficiency of new, renovated, and existing buildings. DOE is particularly interested in supporting States and local governments in implementing local capacity building, multi-year investments in workforce and education, and long-term improvements in building energy codes through multi-cycle adoption and building performance standards (BPS).

Building energy codes establish minimum levels of energy efficiency for new and existing residential and commercial buildings. Model energy codes, such as the 2021 IECC and ASHRAE Standard 90.1-2019, are developed and updated through national consensus processes. States and local governments ultimately implement building energy codes, which are handled through various adoption, compliance, and enforcement processes and can vary widely across the United States. Many States have consistently received funding through their State Energy Plan to support the adoption of traditional building energy codes. In addition to this competitive funding opportunity announcement a formal funding announcement was published on September 19, 2023 for States pursuing pre-approved code packages.

Questions regarding the FOA must be submitted to [email protected].

Round 1 of this opportunity is closed for submissions in Infrastructure Exchange under record/FOA number DE-FOA-0003056 . The Round 1 Concept Paper due date was 2/9/2024 and Full Application due date was 4/30/2024.

This opportunity is now open for Round 2 Concept Paper submissions until the deadline of 6/28/2024 at 5:00 PM ET. Due to system limitations, submissions for Round 2 Concept Papers and Full Applications will be accepted in Infrastructure Exchange under this record/FOA number DE-RD2-0003056.

Concept Paper

For more information about this FOA, please view this recording of the informational webinar that was hosted by DOE on January 17, 2024.

Recording URL: https://pnnl.zoomgov.com/rec/share/gYB2F2RTFplJte6eWjQI9I37V69_f5eC3hqEpC0IFA3J4O75Rs1mh4nbAG4xIE68.0jdynbe3a3KBLykB?startTime=1705517911000

Passcode: #7oFSRhE

For more information about the Equivalence Methodology, please view this recording of the Equivalence Methodology Overview webinar that was hosted by DOE on February 1, 2024.

Recording URL: https://pnnl.zoomgov.com/rec/share/zq8n0RBkabq6Z6crkRB0zbIb7jFGjfnco1xGwXCVj8ETEEzzYzdHlZ5LDUWF0HMV.zNu0URlLGRQufn52

For more information about the Full Application requirements, please view this recording of the informational webinar that was hosted by DOE on March 28, 2024.

Recording URL: https://pnnl.zoomgov.com/rec/share/TTAxUs0X1-f_XoQ_wFQ7HDlRsdweLbNZI3Ei5XzwEa4l_cc3bZptvf_PcK5YaFvn.3_vErRqtrAVD6cVi

Passcode: FZW3W!Lv

  • [email protected]  
  • [email protected]  
  • Concept Paper Submission Deadline: 6/28/2024 5:00 PM ET
  • Full Application Submission Deadline: 9/13/2024 5:00 PM ET
  • View Full Application Reviewer Comments Period: 12/1/2024 5:00 PM ET – 12/10/2024 5:00 PM ET

DE-FOA-0003349: Section 242: Hydroelectric Production Incentive

The hydroelectric production incentive payments are a benefit available for electric energy generation and sold for a specified 10-year period as authorized under the Energy Policy Act of 2005. In the Infrastructure Investment and Jobs Act, DOE received $125 million to support this hydroelectric production incentive. At this time, DOE is accepting applications from owners and authorized operators of qualified hydroelectric facilities for hydroelectricity generated and sold in calendar year 2023.

Applications are due by April 23 rd  at 5 p.m. ET . Instructions for what to include in the application can be found in section VII(b) of the Guidance.

TPL-0000008: Teaming Partner List - DE-FOA-0003294

DOE is compiling a “Teaming Partner List” to facilitate the formation of new project teams for this FOA. The Teaming Partner List allows organizations who may wish to participate on an application to express their interest to other applicants and to explore potential partnerships.

DOE encourages eligible entities to team up on a single application in order to: (1) ease the administrative burdens associated with managing a federal grant, (2) maximize the scope, reach, and level of ambition for the proposed projects and programs, and (3) encourage sharing of capacity, knowledge, expertise, lessons learned and best practices across jurisdictions.

SUBMISSION INSTRUCTIONS: Users will see a new section, “Teaming Partners”, within the left-hand navigation in eXCHANGE. This page allows users to view published Teaming Partner Lists and any interested party that would like to be included on this list should submit a request within eXCHANGE to join the teaming partner list. Select the appropriate Teaming Partner List from the dropdown and fill in the following information: Investigator Name, Organization Name, Organization Type, Topic Area, Background and Capabilities, Website, Contact Address, Contact Email, and Contact Phone.

DISCLAIMER: By submitting a request to be included on the Teaming Partner List, the requesting organization consents to the publication of the above-referenced information. By facilitating the Teaming Partner List, DOE is not endorsing, sponsoring, or otherwise evaluating the qualifications of the individuals and organizations that are self-identifying themselves for placement on this Teaming Partner List. DOE will not pay for the provision of any information, nor will it compensate any applicants or requesting organizations for the development of such information.

DE-FOA-0003294: Bipartisan Infrastructure Law (BIL): Advanced Energy Manufacturing and Recycling Grant Program (Section 40209)

Bipartisan Infrastructure Law (BIL) Funding Opportunity Announcement (FOA) DE-FOA-0003294: BIL - Advanced Energy Manufacturing and Recycling Grant Program (Section 40209) through the Office of Manufacturing and Energy Supply Chains (MESC).

-------------------------------------------------------------------------------------------

Modification 000001 - The purpose of this modification is to: (1) Extend the Submission Deadlines for Concept Papers and Full Applications; (2) Updates page number references in the BIL Section 40209 FOA Guide; (3) Update Section IV.D. of the FOA including: (a) Adjusting the approximate number of days between Concept Paper Notification and the Full Application Due Date, (b) Incorporate a Project Financial Model into the Full Application Content Requirements, and (c) Provide several clarifications within the Technical Volume Requirements.

Modification 000002 - The purpose of this modification is to: (1) Update page number references in the BIL Section 40209 FOA Guide; (2) Update Section I.B.i. to clarify other advanced energy property; (3) Update Section III.A.i. to clarify demonstration of eligibility for the energy bills requirement; (4) Update Appendix I - Eligible SAEP Guidance to clarify other advanced energy property

The BIL invests appropriations over Fiscal Years (FYs) 2022 through 2026 to establish the Advanced Energy Projects Grant Program, which will support industrial projects in eligible energy communities.

Through the two (2) Areas of Interest (AOI), the FOA will provide approximately $425 million in support of projects by small- and medium-sized manufacturing firms (SMMs).

AOI 1: Clean Energy Manufacturing and Recycling :

The objective of AOI 1 is to increase domestic manufacturing and recycling capacity for materials, components, and systems needed for the clean energy transition. DOE is seeking applications for projects in this AOI to establish new, or re-quip or expand, an existing manufacturing or recycling facility for the production or recycling, as applicable, of advanced energy property.

AOI 2: Industrial Decarbonization:

The overall objectives for AOI 2 is to reduce Greenhouse Gas (GHG) emissions in the United States manufacturing sector through substantial reductions in existing facilities and new builds that result in low carbon materials.

Subtopic AOI 2a: Re-equip an existing industrial or manufacturing facility with equipment designed to substantially reduce the GHG emissions of that facility.

Subtopic AOI 2b: Establish new, or re-equip or expand, an existing manufacturing or recycling facility that produces materials that result in substantially lower carbon intensity compared to an appropriate industry benchmark and are not derived from a primary feedstock of palm fatty acid distillates or fossil fuels including coal, natural gas, and petroleum.

------------------------------------------------------------------------------------------------

*** An Informational Webinar was held Thursday, March 14, 2024 at 3:30 PM ET ***

*** See below for a copy of the slide deck that was presented ***

For further information, please see the "Full Funding Opportunity Announcement" document in the Announcement Documents section below.

Attention: The eXCHANGE system is currently designed to enforce hard deadlines for Concept Paper and Full Application submissions. The APPLY and SUBMIT buttons automatically disable at the defined submission deadlines. The intention of this design is to consistently enforce a standard deadline for all applicants.

Applicants that experience issues with submissions PRIOR to the FOA Deadline: In the event that an Applicant experiences technical difficulties with a submission, the Applicant should contact the Exchange helpdesk for assistance ([email protected]).

*** An Informational Webinar  was held Thursday, March 14, 2024 at 3:30 PM ET ***

*** A link to the recorded Webinar is uploaded ***

  • [email protected]   For all technical issues involving Clean Energy Infrastructure eXCHANGE
  • [email protected]   For all questions regarding the content of this FOA
  • Concept Paper Submission Deadline: 4/22/2024 5:00 PM ET
  • Full Application Submission Deadline: 7/1/2024 5:00 PM ET

DE-FOA-0003229: Local Government Energy Program: Communities Sparking Investment in Transformative Energy

Modification 0002: The purpose of this modification is to revise language in Section III.C.i. Domestic Entities.

____________________________________________________________

Modification 0001: The purpose of this modification is to add optional application files under Section IV.C. Content and Form of the Full Application.

_____________________________________________________________

This Funding Opportunity Announcement (FOA) is being issued by the U.S. Department of Energy’s State and Community Energy Programs (SCEP) on behalf of the Local Goverment Energy Program (LGEP).

This FOA will support eligible local governments and Tribes to implement projects that provide direct community benefits, spark additional investments, meet community-identified priorities, and build local capacity. Community benefits may include creation of local economic opportunities for workers, workforce measures and agreements, community revitalization, lowered energy burdens, increased access to renewable energy, improved air quality, increased public participation in energy decision-making processes, and improved quality of life for local residents.

Projects may span a range of geographic scopes and wide variety of technology areas including, but not limited to: building efficiency and/or electrification, electric transportation, energy infrastructure upgrades, microgrid development and deployment, renewable energy, resilience hubs, and workforce development.

C-SITE Eligibility Map: https://arcgis.netl.doe.gov/portal/apps/experiencebuilder/experience/?id=785ee47a99d24b36b405acd03d97a5f9

Two public informational webinars will be held on the following dates:

March 7, 2024, 2:00 - 3:00 PM ET

Attendee link: https://teams.microsoft.com/l/meetup-join/19%3ameeting_MzAzOGMxMDItOTVjZi00YjRhLWFjNWEtMTI3NmFkM2I3NTQw%40thread.v2/0?context=%7B%22Tid%22%3A%226b183ecc-4b55-4ed5-b3f8-7f64be1c4138%22%2C%22Oid%22%3A%226f122630-d8b8-4444-887b-018784ba927b%22%2C%22IsBroadcastMeeting%22%3Atrue%2C%22role%22%3A%22a%22%7D&btype=a&role=a

March 21, 2024, 3:00 - 4:00 PM ET

Attendee link: https://teams.microsoft.com/l/meetup-join/19%3ameeting_NTFkMzZjNzktZjQ3MS00M2E5LTgzMDItYTUxZmRiN2FiMTkw%40thread.v2/0?context=%7B%22Tid%22%3A%226b183ecc-4b55-4ed5-b3f8-7f64be1c4138%22%2C%22Oid%22%3A%226f122630-d8b8-4444-887b-018784ba927b%22%2C%22IsBroadcastMeeting%22%3Atrue%2C%22role%22%3A%22a%22%7D&btype=a&role=a

SCEP hosted a "How to Apply to C-Site" webinar on May 9, 2024, see the link to the presentation: https://www.youtube.com/watch?v=29mi_n7NgEo

  • [email protected] FOA Mailbox
  • [email protected] Infrastructure-eXCHANGE Helpdesk
  • Full Application Submission Deadline: 5/31/2024 5:00 PM ET
  • View Full Application Reviewer Comments Period: 7/5/2024 5:00 PM ET – 7/10/2024 5:00 PM ET

DE-FOA-0003223: Bipartisan Infrastructure Law (BIL) - 40125b Cybersecurity for Research, Development, and Demonstration (RD&D)

The Office of Cybersecurity, Energy Security, and Emergency Response (CESER) is issuing this Funding Opportunity Announcement (FOA). Awards made under this FOA will use funds appropriated by the Infrastructure Investment and Jobs Act (IIJA), more commonly known as the Bipartisan Infrastructure Law (BIL).

Section 40125(b) of the BIL will invest appropriations of $250 million over a 5-year period from FY 2022 through 2026 to develop advanced cybersecurity applications and technologies for the energy sector through several research, development, and demonstration (RD&D) activities aligned with the 40125(b) provision. This FOA provides approximately $30 million in federal funding for RD&D projects to advance cybersecurity tools and technologies specifically designed to reduce cyber risks to renewable energy delivery infrastructure.

The activities to be funded under this FOA support BIL Section 40125(b) to lead to next generation tools and technologies not available today that will become widely adopted throughout the energy sector to reduce a cyber incident disruption to energy delivery.

  • [email protected]   For all technical questions about FOA 3223 or any of the Topic Areas
  • [email protected]   For problems or questions about the website or uploading files
  • Full Application Submission Deadline: 3/18/2024 5:00 PM ET

TPL-0000007: Energy Auditor Teaming Partner List

DE-FOA-0003204: Energy Auditor Training

DE-FOA-0003204: Bipartisan Infrastructure Law (BIL) 40503: Energy Auditor Training

The Energy Auditor Training (EAT) Program will provide Grant funding to States for the purpose of training individuals to conduct energy audits, or surveys, of commercial and residential buildings.

This program was established by Section 40503 of the Infrastructure Investment and Jobs Act (IIJA), more commonly known as the Bipartisan Infrastructure Law (BIL). The goals of the program are to offer auditor training certifications that include informed curriculum and program design that aligns with current and future standards; inform or empower States with current, standardized framing of the education and training requirements for energy auditors; enlarge the pipeline of diverse talent by closing gaps in job access; address workforce inclusion deficiencies and improve disparities with underrepresented groups; connect auditor trainees to career opportunities that promote job quality and economic mobility; and inspire sustainability through intentional practices and partnerships that support infrastructure development and the long-term value of a clean energy workforce. ELIGIBLE APPLICANTS: In accordance with the BIL Section 40503, funding is only available to States, the District of Columbia, and United States territories that have a demonstrated need for assistance for training energy auditors. These eligible entities are referred to throughout this FOA as “States”. No other entity types, including Local Government and Tribes, may be considered for this funding. In accordance with 2 CFR Section 910.126 and DOE Program Rule 10 CFR Part 420, eligibility for these awards is restricted to State Energy Offices.

FUNDING OVERVIEW: The BIL appropriated $40 million in funding to be issued through a competitive Grant program. DOE may issue one, multiple, or no awards. Individual awards may vary between $200,000 and a maximum of $2,000,000. DOE anticipates making approximately twenty (20) to thirty (30) awards under this FOA. In accordance with the BIL Section 40503(d)(1) the amount of a Grant awarded to an eligible State shall be determined by the Secretary, taking into account the population of the eligible State. DOE reserves the right to determine the final award amount of selected eligible States.

COST MATCHING: Cost match is not required for these awards. DOE encourages states to consider how they could leverage philanthropic and private sector funding to advance their goals and amplify the impact of the BIL funding.

WEBSITE LINK:   Energy Auditor Training Grant Program

  • [email protected]   For questions related to the registration process and use of the eXCHANGE website.
  • [email protected]   For questions related to the content of the FOA.
  • Concept Paper Submission Deadline: 4/12/2024 5:00 PM ET
  • View Full Application Reviewer Comments Period: 8/27/2024 8:00 AM ET – 8/29/2024 5:00 PM ET

DE-FOA-0003056: Inflation Reduction Act of 2022 (IRA) Assistance for the Adoption of the Latest and Zero Building Energy Codes

This Infrastructure Exchange instance is for applications for ROUND 1 of the subject Funding Opportunity Announcement. Round 1 of this opportunity is now closed for submissions in Infrastructure Exchange under this record/FOA number DE-FOA-0003056 . Round 1 Concept Paper due date was 2/9/2024 and Full Application due date was 4/30/2024.

This opportunity is now open for Round 2 Concept Paper submissions until the deadline of 6/28/2024 at 5:00 PM ET. Due to system limitations, submissions for Round 2 Concept Papers and Full Applications will be accepted in Infrastructure Exchange under record/FOA number DE-RD2-0003056. DE-RD2-0003056 Round 2 record is here: https://infrastructure-exchange.energy.gov/Default.aspx#FoaIde172a922-d692-4fba-841e-c2040fd07298

Round 1 of this opportunity is closed for submissions in Infrastructure Exchange under this record/FOA number DE-FOA-0003056 . The Round 1 Concept Paper due date was 2/9/2024 and Full Application due date was 4/30/2024.

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Energy Communities

Director’s Update – June 7, 2024

The  Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization (Energy Communities IWG)  is pursuing a whole-of-government approach to create good-paying union jobs, spur economic revitalization, remediate environmental degradation and support energy workers in coal, oil and gas, and power plant communities across the country.

§ 48C Round 2 Concept Papers Due June 21

The Office of Manufacturing and Energy Supply Chains (MESC) recently held a webinar to discuss the new Qualifying Advanced Energy Project Credit (§ 48C) program Round 2 guidance and application process.

In case you missed the webinar, below is some important information to help you navigate the application process for Round 2:

  • Links to access the entire webinar recording and slides .
  • Download concept papers templates to help kickstart your application process. Revised templates will be available soon.
  • To register, start your application, and find all necessary information, please go to the § 48C application portal .

Please note, the § 48C Round 2 concept paper submission window opened May 22, 2024, and will close June 21, 2024, at 5:00 p.m. ET. For each proposed project, applicants must submit a completed PDF template for the relevant project category and a completed datasheet.

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Updated Energy Communities Tax Credit Bonus Map

The Inflation Reduction Act’s Energy Community Tax Credit Bonus applies a bonus of up to 10% (for production tax credits) or 10 percentage points (for investment tax credits) for projects, facilities and technologies located in energy communities. Check out the updated map to see if your community qualifies .

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New Funding Opportunities & Announcements

  • EPA Announced More Than $300 Million in Brownfield Grants Through Investing in America Agenda to Rehabilitate and Revitalize Communities The U.S. Environmental Protection Agency (EPA) announced more than $300 million in grant awards to help states, Tribal Nations, local governments and nonprofit organizations assess and clean up polluted brownfield sites across the country. These grants will help transform once-polluted, vacant and abandoned properties into community assets, help create good jobs and spur economic revitalization in overburdened communities.
  • DOE Announced More Than $12 Million to Support Local Projects to Save Energy in 17 State and Local Governments The U.S. Department of Energy’s (DOE) Energy Efficiency and Conservation Block Grant (EECBG) Program, funded by the Bipartisan Infrastructure Law, will help advance state and local governments’ efforts to improve energy efficiency, reduce carbon emissions and lower overall energy use.
  • USDA Announced Projects to Strengthen Rural Infrastructure and Create Jobs Across the Nation Through three funding programs, the U.S. Department of Agriculture (USDA) is funding 47 projects in 23 states to improve access to reliable electricity and clean drinking water for more than one million people and to create good-paying jobs across the nation.
  • DOI Announced Nearly $80 Million From the Investing in America Agenda to Clean Up Legacy Pollution in Three States North Dakota will use its $25 million U.S. Department of the Interior (DOI) grant to plug approximately 46 orphaned oil and gas wells, reclaim 116 well sites and remediate more than 270 contaminated sites. West Virginia will use its $29.2 million award to plug approximately 200 orphaned oil and gas wells. Finally, New Mexico expects to plug approximately 117 orphaned oil and gas wells, remediate four sites and complete surface restoration of 33 locations with its $25 million grant.
  • ARC Awarded Nearly $1.7 Million to Grow Workforces in Key Industries Across Six Appalachian States The Appalachian Regional Commission (ARC) awarded four new Appalachian Regional Initiative for Stronger Economies (ARISE) grants totaling nearly $1.7 million to develop workforce capacity plans in key industries — cybersecurity, infrastructure, geographical information systems (GIS) development and housing.
  • EPA Announced $25 Million to Help Provide Small, Underserved, and Disadvantaged Communities with Clean and Safe Drinking Water The Small, Underserved, and Disadvantaged Community grant program will upgrade infrastructure to comply with the Safe Drinking Water Act, reducing exposure to per- and polyfluoroalkyl substances (PFAS), removing sources of lead, and addressing additional local drinking water challenges.

Funding Opportunities for Workforce Development

  • The Office of Brownfields and Land Revitalization will host an outreach webinar June 6, 2024, from 1 to 3:30 p.m. ET to explain the grant guidelines for interested applicants and to address commonly asked questions. Prior registration is not required.
  • Workforce Opportunity for Rural Communities (WORC) Round 6: A Grant Initiative for the Appalachian, Delta, and Northern Border Regions Due June 20 The U.S. Department of Labor’s (DOL) WORC grants are designed to address the employment and training needs of the local and regional workforce, created in collaboration with community partners and aligned with existing economic and workforce development plans and strategies.
  • DOL Building Pathways to Infrastructure Jobs Grant Program Round 2 Due July 1 DOL announced the availability of $35 million to enable public-private partnerships to develop, implement and scale worker-centered programs that train people for in-demand jobs in advanced manufacturing; information technology; and professional, scientific and technical service occupations.
  • Critical Sector Job Quality Grants Due July 15 DOL announced $12 million in additional funds to improve job quality and increase the availability of good jobs in critical industries. This includes an emphasis on training provided for jobs in the care economy, such as home, elder and childcare.

Upcoming Funding Deadlines

The following funding opportunities and technical assistance programs have application deadlines coming up in the next four weeks and can all be found in the Energy Communities IWG’s online clearinghouse . To learn more about how to navigate the clearinghouse, click here . U.S. Department of Energy

  • 2024 Renew America’s Schools Prize – Round 2 Due June 13
  • Clean Energy to Communities Program (C2C): In-Depth Partnerships Due June 14
  • Grid Resilience State and Tribal Formula Grants Due June 17
  • Regional Scale Collaboration to Facilitate a Domestic Critical Minerals Future: Carbon Ore, Rare Earth, and Critical Minerals (CORE-CM) Initiative Due June 24
  • Advanced Energy Manufacturing and Recycling Grant Program Section 40209 – Round 2 Due July 1
  • Carbon Capture Technology Program, Front-End Engineering and Design for Carbon Dioxide (CO 2 ) Transport Due July 9
  • Energizing Rural Communities Prize Due July 12
  • Training for Residential Energy Contractors (TREC) Program Due July 12
  • Wind Turbine Materials Recycling Prize Due July 19
  • Solar Ambassador Prize Due July 31
  • American-Made Solar Prize – Round 7 Due August 22

U.S. Department of Agriculture

  • Rural Decentralized Water System Grant Program Due June 28
  • Rural Economic Development Loan and Grant Due June 30

U.S. Department of Transportation

  • Ferry Service for Rural Communities Program Due June 17
  • Natural Gas Distribution Infrastructure Safety and Modernization Grants Due June 20
  • Strengthening Mobility and Revolutionizing Transportation (SMART) Grants Program Due July 12

U.S. Department of Health and Human Services

  • Affordable Housing and Supportive Services Demonstration Due July 15
  • Community Economic Development Projects Due July 17

U.S. Environmental Protection Agency

  • Air Quality Information: Making Sense of Air Pollution Data to Inform Decisions in Underserved Communities Overburdened by Air Pollution Exposures Due June 26
  • Clean Heavy-Duty Vehicles Due July 25

Events & Additional Resources

  • Advancing Appalachia: ARC 2024 Annual Conference September 4–5, 2024 Chattanooga Convention Center, Chattanooga, Tennessee ARC’s annual conference will highlight how Appalachia’s 13 states and 423 counties are working to advance the region by building businesses and workforces, investing in infrastructure and tourism, and growing local leadership capacity.
  • Southern Illinois IWG Funding Panel October 22–23, 2024 University of Illinois Extension Center, Carmi, Illinois
  • Rural Partners Network: Rural Innovator Initiative Nomination deadline: June 14, 2024 USDA Rural Development announced its Rural Innovators Initiative, which uplifts stories of extraordinary local leaders who are taking action to ensure their communities thrive for generations to come. Nominate a rural innovator today!
  • Anchoring Clean Energy Manufacturing Investments in Coal Country and Beyond Check out the U.S. Department of the Treasury’s newest blog post on the history of the § 48C program and how the credit is incentivizing and anchoring investments in clean energy manufacturing facilities across the country.
  • Rural Grant Applicant Toolkit for Competitive Transportation Funding The U.S. Department of Transportation developed a guide for potential applicants to identify and navigate discretionary opportunities for rural transportation projects. Although the Grant Applicant Toolkit focuses on rural transportation projects, many grant funding resources contained throughout can apply more broadly to other projects. 

Support § 48C as a Reviewer 

Are you interested in supporting the implementation of this impactful program? DOE’s MESC has exciting opportunities available to contribute to the § 48C Tax Credit Program Application merit review process. Learn more about how to apply here .

On behalf of all Energy Communities IWG member agencies, thank you for your continued interest in programs that support people living and working in America’s energy communities. Please feel free to share this newsletter with others in your network who may benefit.  

Best regards,

Brian J. Anderson, Ph.D. Executive Director,  Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization

To learn more about funding opportunities, visit the Energy Communities IWG Clearinghouse .

Check out the Getting Started Guide and Navigator .

Click here to share your success story.

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The state of AI in early 2024: Gen AI adoption spikes and starts to generate value

If 2023 was the year the world discovered generative AI (gen AI) , 2024 is the year organizations truly began using—and deriving business value from—this new technology. In the latest McKinsey Global Survey  on AI, 65 percent of respondents report that their organizations are regularly using gen AI, nearly double the percentage from our previous survey just ten months ago. Respondents’ expectations for gen AI’s impact remain as high as they were last year , with three-quarters predicting that gen AI will lead to significant or disruptive change in their industries in the years ahead.

About the authors

This article is a collaborative effort by Alex Singla , Alexander Sukharevsky , Lareina Yee , and Michael Chui , with Bryce Hall , representing views from QuantumBlack, AI by McKinsey, and McKinsey Digital.

Organizations are already seeing material benefits from gen AI use, reporting both cost decreases and revenue jumps in the business units deploying the technology. The survey also provides insights into the kinds of risks presented by gen AI—most notably, inaccuracy—as well as the emerging practices of top performers to mitigate those challenges and capture value.

AI adoption surges

Interest in generative AI has also brightened the spotlight on a broader set of AI capabilities. For the past six years, AI adoption by respondents’ organizations has hovered at about 50 percent. This year, the survey finds that adoption has jumped to 72 percent (Exhibit 1). And the interest is truly global in scope. Our 2023 survey found that AI adoption did not reach 66 percent in any region; however, this year more than two-thirds of respondents in nearly every region say their organizations are using AI. 1 Organizations based in Central and South America are the exception, with 58 percent of respondents working for organizations based in Central and South America reporting AI adoption. Looking by industry, the biggest increase in adoption can be found in professional services. 2 Includes respondents working for organizations focused on human resources, legal services, management consulting, market research, R&D, tax preparation, and training.

Also, responses suggest that companies are now using AI in more parts of the business. Half of respondents say their organizations have adopted AI in two or more business functions, up from less than a third of respondents in 2023 (Exhibit 2).

Gen AI adoption is most common in the functions where it can create the most value

Most respondents now report that their organizations—and they as individuals—are using gen AI. Sixty-five percent of respondents say their organizations are regularly using gen AI in at least one business function, up from one-third last year. The average organization using gen AI is doing so in two functions, most often in marketing and sales and in product and service development—two functions in which previous research  determined that gen AI adoption could generate the most value 3 “ The economic potential of generative AI: The next productivity frontier ,” McKinsey, June 14, 2023. —as well as in IT (Exhibit 3). The biggest increase from 2023 is found in marketing and sales, where reported adoption has more than doubled. Yet across functions, only two use cases, both within marketing and sales, are reported by 15 percent or more of respondents.

Gen AI also is weaving its way into respondents’ personal lives. Compared with 2023, respondents are much more likely to be using gen AI at work and even more likely to be using gen AI both at work and in their personal lives (Exhibit 4). The survey finds upticks in gen AI use across all regions, with the largest increases in Asia–Pacific and Greater China. Respondents at the highest seniority levels, meanwhile, show larger jumps in the use of gen Al tools for work and outside of work compared with their midlevel-management peers. Looking at specific industries, respondents working in energy and materials and in professional services report the largest increase in gen AI use.

Investments in gen AI and analytical AI are beginning to create value

The latest survey also shows how different industries are budgeting for gen AI. Responses suggest that, in many industries, organizations are about equally as likely to be investing more than 5 percent of their digital budgets in gen AI as they are in nongenerative, analytical-AI solutions (Exhibit 5). Yet in most industries, larger shares of respondents report that their organizations spend more than 20 percent on analytical AI than on gen AI. Looking ahead, most respondents—67 percent—expect their organizations to invest more in AI over the next three years.

Where are those investments paying off? For the first time, our latest survey explored the value created by gen AI use by business function. The function in which the largest share of respondents report seeing cost decreases is human resources. Respondents most commonly report meaningful revenue increases (of more than 5 percent) in supply chain and inventory management (Exhibit 6). For analytical AI, respondents most often report seeing cost benefits in service operations—in line with what we found last year —as well as meaningful revenue increases from AI use in marketing and sales.

Inaccuracy: The most recognized and experienced risk of gen AI use

As businesses begin to see the benefits of gen AI, they’re also recognizing the diverse risks associated with the technology. These can range from data management risks such as data privacy, bias, or intellectual property (IP) infringement to model management risks, which tend to focus on inaccurate output or lack of explainability. A third big risk category is security and incorrect use.

Respondents to the latest survey are more likely than they were last year to say their organizations consider inaccuracy and IP infringement to be relevant to their use of gen AI, and about half continue to view cybersecurity as a risk (Exhibit 7).

Conversely, respondents are less likely than they were last year to say their organizations consider workforce and labor displacement to be relevant risks and are not increasing efforts to mitigate them.

In fact, inaccuracy— which can affect use cases across the gen AI value chain , ranging from customer journeys and summarization to coding and creative content—is the only risk that respondents are significantly more likely than last year to say their organizations are actively working to mitigate.

Some organizations have already experienced negative consequences from the use of gen AI, with 44 percent of respondents saying their organizations have experienced at least one consequence (Exhibit 8). Respondents most often report inaccuracy as a risk that has affected their organizations, followed by cybersecurity and explainability.

Our previous research has found that there are several elements of governance that can help in scaling gen AI use responsibly, yet few respondents report having these risk-related practices in place. 4 “ Implementing generative AI with speed and safety ,” McKinsey Quarterly , March 13, 2024. For example, just 18 percent say their organizations have an enterprise-wide council or board with the authority to make decisions involving responsible AI governance, and only one-third say gen AI risk awareness and risk mitigation controls are required skill sets for technical talent.

Bringing gen AI capabilities to bear

The latest survey also sought to understand how, and how quickly, organizations are deploying these new gen AI tools. We have found three archetypes for implementing gen AI solutions : takers use off-the-shelf, publicly available solutions; shapers customize those tools with proprietary data and systems; and makers develop their own foundation models from scratch. 5 “ Technology’s generational moment with generative AI: A CIO and CTO guide ,” McKinsey, July 11, 2023. Across most industries, the survey results suggest that organizations are finding off-the-shelf offerings applicable to their business needs—though many are pursuing opportunities to customize models or even develop their own (Exhibit 9). About half of reported gen AI uses within respondents’ business functions are utilizing off-the-shelf, publicly available models or tools, with little or no customization. Respondents in energy and materials, technology, and media and telecommunications are more likely to report significant customization or tuning of publicly available models or developing their own proprietary models to address specific business needs.

Respondents most often report that their organizations required one to four months from the start of a project to put gen AI into production, though the time it takes varies by business function (Exhibit 10). It also depends upon the approach for acquiring those capabilities. Not surprisingly, reported uses of highly customized or proprietary models are 1.5 times more likely than off-the-shelf, publicly available models to take five months or more to implement.

Gen AI high performers are excelling despite facing challenges

Gen AI is a new technology, and organizations are still early in the journey of pursuing its opportunities and scaling it across functions. So it’s little surprise that only a small subset of respondents (46 out of 876) report that a meaningful share of their organizations’ EBIT can be attributed to their deployment of gen AI. Still, these gen AI leaders are worth examining closely. These, after all, are the early movers, who already attribute more than 10 percent of their organizations’ EBIT to their use of gen AI. Forty-two percent of these high performers say more than 20 percent of their EBIT is attributable to their use of nongenerative, analytical AI, and they span industries and regions—though most are at organizations with less than $1 billion in annual revenue. The AI-related practices at these organizations can offer guidance to those looking to create value from gen AI adoption at their own organizations.

To start, gen AI high performers are using gen AI in more business functions—an average of three functions, while others average two. They, like other organizations, are most likely to use gen AI in marketing and sales and product or service development, but they’re much more likely than others to use gen AI solutions in risk, legal, and compliance; in strategy and corporate finance; and in supply chain and inventory management. They’re more than three times as likely as others to be using gen AI in activities ranging from processing of accounting documents and risk assessment to R&D testing and pricing and promotions. While, overall, about half of reported gen AI applications within business functions are utilizing publicly available models or tools, gen AI high performers are less likely to use those off-the-shelf options than to either implement significantly customized versions of those tools or to develop their own proprietary foundation models.

What else are these high performers doing differently? For one thing, they are paying more attention to gen-AI-related risks. Perhaps because they are further along on their journeys, they are more likely than others to say their organizations have experienced every negative consequence from gen AI we asked about, from cybersecurity and personal privacy to explainability and IP infringement. Given that, they are more likely than others to report that their organizations consider those risks, as well as regulatory compliance, environmental impacts, and political stability, to be relevant to their gen AI use, and they say they take steps to mitigate more risks than others do.

Gen AI high performers are also much more likely to say their organizations follow a set of risk-related best practices (Exhibit 11). For example, they are nearly twice as likely as others to involve the legal function and embed risk reviews early on in the development of gen AI solutions—that is, to “ shift left .” They’re also much more likely than others to employ a wide range of other best practices, from strategy-related practices to those related to scaling.

In addition to experiencing the risks of gen AI adoption, high performers have encountered other challenges that can serve as warnings to others (Exhibit 12). Seventy percent say they have experienced difficulties with data, including defining processes for data governance, developing the ability to quickly integrate data into AI models, and an insufficient amount of training data, highlighting the essential role that data play in capturing value. High performers are also more likely than others to report experiencing challenges with their operating models, such as implementing agile ways of working and effective sprint performance management.

About the research

The online survey was in the field from February 22 to March 5, 2024, and garnered responses from 1,363 participants representing the full range of regions, industries, company sizes, functional specialties, and tenures. Of those respondents, 981 said their organizations had adopted AI in at least one business function, and 878 said their organizations were regularly using gen AI in at least one function. To adjust for differences in response rates, the data are weighted by the contribution of each respondent’s nation to global GDP.

Alex Singla and Alexander Sukharevsky  are global coleaders of QuantumBlack, AI by McKinsey, and senior partners in McKinsey’s Chicago and London offices, respectively; Lareina Yee  is a senior partner in the Bay Area office, where Michael Chui , a McKinsey Global Institute partner, is a partner; and Bryce Hall  is an associate partner in the Washington, DC, office.

They wish to thank Kaitlin Noe, Larry Kanter, Mallika Jhamb, and Shinjini Srivastava for their contributions to this work.

This article was edited by Heather Hanselman, a senior editor in McKinsey’s Atlanta office.

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