Sustainable infrastructure

There is a growing consensus among G20 countries regarding the importance of sustainable infrastructure – the permanent assets that a society needs for the orderly and inclusive operation of its economy as a driver of growth, jobs, competitiveness and sustainability.

Whenever a well-prepared infrastructure project – such as a new railway line, road or water treatment plant – is completed, there is a combination of (i) immediate economic and social benefits through job creation during construction and (ii) increases in users’ productivity and improved quality of life.

OECD and IMF analysis has shown that for every US dollar of investment in well-prepared high-quality infrastructure, there is a multiplier of 1.6x in the form of a boost to short-term employment and longer-term productivity gains in the economy.

Infrastructure also plays a central role in the achievement of other development objectives, and this includes contributions to the green economy. Given the long life cycle of infrastructure assets, policy and investment decisions that are taken today in the area of sustainable infrastructure will have lasting implications for the climate and the UN Sustainable Development Goals (SDGs) more broadly.

The financing gap

Despite its importance, there is a major financing shortfall for infrastructure investment.

The GI Hub’s Global Infrastructure Outlook indicates that the average annual infrastructure investment gap over the period from 2022 to 2040 is US$ 650 billion, with that figure increasing at an average rate of 3 per cent per year. More immediately, the EBRD regions will require significant investment in infrastructure between 2026 and 2030, with the value of that investment ranging from 2 to 4 per cent of gross domestic product (GDP) per year.

Bridging this infrastructure gap is a key priority of the G20 investment agenda, as well as a critical component of the Paris Agreement and the SDGs.

High-quality sustainable infrastructure

We are in the midst of a global infrastructure boom, and the infrastructure investment choices that are made now will have an impact on emission levels, quality of life and economic growth for decades to come.

The EBRD is committed to delivering sustainable infrastructure – that is to say, infrastructure that is of high quality, green and future-proof.

Through its Green Economy Transition (GET) approach, the Bank helps the countries of the EBRD regions to transition to green, low-carbon, resilient economies. It does this by aligning all of its activities with the Paris Agreement (which it has done since January 2022) and using a combination of policy engagement and investment activities.

In 2019, the G20 set out six voluntary, non-binding principles that provide a strategic direction for infrastructure investment. These Quality Infrastructure Investment (QII) Principles build on the consensus that infrastructure is a significant driver of economic prosperity and that well-built and sustainable infrastructure maximises the positive impact of such valuable investment.

The six QII Principles cover the following areas:

Maximising the positive impact of infrastructure to achieve sustainable growth and development
Raising the economic efficiency of infrastructure investment in view of life cycle costs
Integrating environmental considerations into infrastructure
Building resilience against natural disasters
Integrating social considerations into infrastructure investment
Strengthening infrastructure governance

According to the G20, applying these principles enables countries to pursue infrastructure investments that maximise the economic, social, environmental and developmental impact of infrastructure – the foundation for achieving sustainable, resilient and inclusive growth.

The role of international financial institutions (IFIs)

While IFIs account for only a small percentage of the total financing of infrastructure projects, they play a critical role in building capacity, strengthening institutions, assisting with project pipelines, improving project designs and structures, and ensuring compliance with high international standards in order to attract private capital. IFIs reduce transaction costs and project risks, and they support the institutional and legislative reforms that are needed to foster sound and competitive economies. In short, they ensure that projects are sustainable and enhance welfare.

With support from the G20, IFIs have doubled down on efforts to crowd in private finance, setting significantly increased targets for the mobilisation of such funding. Such investment projects must comply with the highest possible infrastructure standards, as well as employing an integrated, systematic approach. Multilateral development banks have, for example, formulated quantitative ambitions for high-quality projects, encouraging bankable financing structures, catalysing private resources, fostering collaboration between new and existing IFIs and development finance institutions, and strengthening pipeline development through project preparation and advice on public-private partnerships.

The EBRD’s work on sustainable infrastructure encompasses the municipal, transport and energy sectors.

In the municipal sector, the EBRD supports local governments and private operators in the delivery of essential urban services, notably as regards water and wastewater, public transport, urban mobility, street lighting, solid waste management, district energy, buildings, social infrastructure and energy efficiency. The EBRD Green Cities initiative – our flagship programme for the municipal sector – leverages our work in this area.

With transport, we promote safe, secure and sustainable transport systems that balance economic, environmental and social needs.

The EBRD’s vision for the energy sector foresees a partnership between industry, governments and consumers that delivers the essential energy needs of societies and economies in a manner that is sustainable, reliable and at the lowest possible cost.

The municipal, transport and energy sectors all fall within the remit of the EBRD’s Sustainable Infrastructure Group (SIG), which accounts for approximately one-third of the Bank’s annual business activity.

Green city bus in front of traditional Georgian architecture

Infrastructure strategy

The EBRD's latest infrastructure sector strategy (which covers the period 2025-29) became effective on 1 January 2025. That new strategy is a combination of the previously separate strategies for the transport and municipal infrastructure sectors, reflecting the importance of sectoral interdependencies.

Transport

The EBRD is committed to the development of safe, sustainable and efficient transport systems. Such systems underpin economic growth and well-functioning markets by increasing access, inclusion and economic diversification, and improving connectivity for international trade and regional integration.

The EBRD’s key strategic objective in the transport sector is to develop transport infrastructure and services which are viable, green, resilient, well governed, integrated and inclusive, and which can, in turn, drive sustainable development. A cornerstone of the EBRD’s transition impact in the transport sector is support for market-based reform, commercialisation and the development of resilient, low-carbon transport systems.

To achieve this vision, we finance well-structured public and private-sector projects in all areas – railways, roads, aviation, maritime and logistics – offering a diverse range of financial products to meet the financing needs of our clients.

Alongside investment, we also place emphasis on policy dialogue, supported by technical cooperation, to engage on sector reform and the development of greener transport systems.

Municipal

The EBRD is committed to improving municipal infrastructure, in line with its mandate to build open and sustainable market economies. The municipal sector covers all infrastructure and services that are under the ultimate responsibility of local governments, whether they are provided by public or private entities.

Our core objective when investing in the municipal sector is to promote greater efficiency and higher quality in the provision of municipal services and support the establishment of well‑managed and financially sustainable operations that are based on commercial principles and a sound and market‑oriented institutional and regulatory framework.

The cornerstones of the EBRD’s transition impact in the municipal sector are decentralisation, commercialisation, energy efficiency, and environmental and social improvement. The EBRD mobilises technical cooperation grants to support project implementation, capacity development and institution building, with that donor funding being central to its impact in this sector.

See also the tab on the EBRD Green Cities programme.

Energy

The EBRD is active throughout the energy sector’s value chain, promoting efficiency and fostering innovative ways of managing and reducing electricity demand. In addition, in the context of the growing climate challenge, the EBRD actively supports the transition to a low-carbon energy sector as a key priority.

To this end, we are increasing our support for renewable energy sources (solar PV, wind, hydroelectric, and so on), as well as strengthening grids, rethinking energy systems in the context of new technologies (such as energy storage, smart grids and green hydrogen), and promoting demand-side efficiency and prices that reflect all costs (including externalities).

The EBRD also supports the production and distribution of cleaner energy through improvements in energy and resource efficiency, as well as the interconnection of energy markets.

Preparation of infrastructure projects in the energy, transport and municipal sectors

One of the reasons for the global shortage of investment in sustainable infrastructure is the weak and insufficient pipeline of bankable projects. This is often due to a limited capacity to structure, procure and deliver these complex projects.

While there is a general need to re-energise the reform agenda in many of the economies where the EBRD invests, this is particularly true of the infrastructure sector. Here, much-needed reforms and regulatory support mechanisms are often delayed or remain incomplete.

The Bank helps the public and private sectors to accelerate infrastructure investment across the EBRD regions. The main objective here is to offer an improved support and delivery mechanism for project preparation with the aim of improving the efficiency, quality and replicability of infrastructure projects.

The EBRD’s approach to the preparation of projects

The EBRD offers an improved support mechanism focused on the preparation of bankable projects, coupled with a coordinated approach to infrastructure policy dialogue.

The EBRD provides governments with high-quality, client-oriented project preparation and institutional strengthening, thus reaffirming the Bank’s position in the market as a leading provider of comprehensive, sustainable and inclusive infrastructure solutions.

Project scoping, due diligence and supervision

The EBRD supports clients and other beneficiaries throughout the project life cycle, mobilising the necessary expertise in order to:

plan, analyse and appraise options
determine the scope of the project
confirm that technical solutions are fit for purpose
assess financial and economic viability
identify where we can better support "asset care"
develop the implementation and procurement strategy
secure the necessary support during the tender process
supervise works
support and monitor infrastructure when it is put into operation
reveal reform components that could potentially help clients to better implement, operate and manage infrastructure.

Promoting tried and tested reforms, regulatory improvements and best practices

In parallel, the EBRD actively promotes infrastructure policy dialogue in order to deliver the policy changes that are necessary to move each sector closer to the market economy and support projects that would not be feasible in the current environment.

Specifically, the EBRD seeks to deepen policy knowledge and foster the dissemination of best international practices, allowing beneficiaries to finance projects based on advanced market-oriented structures such as the following:

Use of public-private partnerships (PPPs) and private-sector participation for the delivery of infrastructure assets and services. This is an area where the EBRD plays a leading role in delivering policy advice to stakeholders. The EBRD's work in this field covers all infrastructure sectors and facility management PPPs, as well as the various means of introducing private-sector participation into the development and delivery of infrastructure.
Commercialisation of infrastructure services and achievement of financial sustainability. This focuses on the improvement and commercialisation of services, predominantly in the presence of state ownership. Depending on the context, this could include:
- public service contracts (PSCs – typically used in the municipal sector)
- service level agreements (SLAs – used for the operation of national services such as railways and motorways).
Market-oriented use of EU funds. This applies to both EU member states and accession countries, and seeks to boost private-sector participation in the delivery of infrastructure services that are financed using EU funds.

Capacity building and institutional strengthening

The EBRD also provides support in the form of capacity building and institutional strengthening.

Only when the necessary human resources and capacity have been secured, and the appropriate regulatory frameworks and institutional reforms have been implemented, will clients and other beneficiaries be able to maximise the benefits of an investment.

This strategic vision is supported by a team of in-house experts who maintain a sharp focus on clients and transition impact.

This programme helps cities to establish a long-term vision through a Green City Action Plan (GCAP), facilitating and stimulating green investment in water and wastewater services, urban transport, renewable energy, district energy, low-carbon and climate-resilient buildings, solid waste, and nature-based solutions. Within each of these sectors, EBRD Green Cities promotes effective integration of resilience, nature, digital and smart solutions, gender and economic inclusion, and crowding-in of the private sector.

EBRD Green Cities provides technical support to city administrators and local stakeholders to ensure that policy measures and infrastructure investment identified in GCAPs can be developed, implemented and monitored effectively.

Other benefits for cities include access to grants and concessional loan financing for investment in sustainable infrastructure and the opportunity to network and share knowledge and best practices with other Green Cities and organisations.

In order to be eligible for participation in the programme, cities should be located in an EBRD region, have a population of at least 50,000, and be willing to develop a GCAP and launch an initial project as a trigger investment.

Private-sector participation and public-private partnerships

Public-private partnerships (PPPs) play a crucial role in the world’s search for high-quality sustainable infrastructure.

PPPs involve a procurement delivery model featuring a long-term contractual relationship between the public sector (whether at national, municipal, state-owned enterprise or utility level) and a private-sector entity, whereby the latter delivers and finances a public service using a capital asset, sharing the associated risks with the public sector, while also achieving greater value for money relative to a traditional procurement approach.

When direct project revenues from users are insufficient or non-existent (as in the case of social infrastructure), the public sector supports the PPP contract with long-term budgetary commitments.

PPPs exist in various permutations depending on the level of risk and responsibility that is transferred to the private sector. Such risk and responsibility may, for example, relate to the design, construction, operation, maintenance and financing of the asset or service in question.

The underlying rationale for PPPs relies on the private sector providing positive value for money through not only much-needed commercial financing, but also efficient management of new and improved infrastructure assets, at a cost that is lower, on an overall life cycle risk-adjusted basis, than the traditional public-sector alternative.

When designed and procured well, private participation in infrastructure provision can accelerate investment, promote digitalisation of services, deliver greater accountability, align incentives, increase the cost-effectiveness of operations and improve financial sustainability for infrastructure projects.

Under the right conditions, PPPs deliver a higher-quality service at a lower cost over the long term. The EBRD aims to help its public-sector clients to establish those conditions by providing dedicated PPP transaction advice for the benefit of governments.

In order to achieve bankable PPP structures that maximise value for money through public tender procedures and competition, it is essential to use experts and prepare projects properly.

PPP Advisory Unit

The PPP Advisory Unit is a dedicated team of PPP infrastructure experts with extensive experience of infrastructure planning and project finance. This group of specialists has a long track record of supporting and advising governments across the EBRD regions. They adopt a bespoke approach, delivering both assistance with project preparation and, when needed, policy dialogue.

During the preparatory phase of a PPP project, the PPP Advisory Unit appraises and analyses the feasibility of the project (conducting technical, legal, financial, fiscal, environmental and social assessments), sounds out the market, and structures and drafts the procurement documents, before supporting the procurement process all the way through to the commercial and financial closure of the project. While doing this, it transfers significant capacity and knowledge to public officials involved in the preparation, approval and procurement of the project in question.

Benefits of PPPs

While the main motivation for public-sector clients to embrace PPPs is usually a desire to bring private financing – typically foreign direct investment – into the country, the PPP Advisory Unit seeks to reduce overall costs across the life cycle. Many public entities are not equipped to manage infrastructure assets. This requires a long-term overview of an asset’s investment needs, which normally emphasises preventive maintenance of the entire asset, as opposed to reactive ad hoc maintenance.

PPPs allow the public sector to focus on the administration of the public service, while the private sector is responsible for guaranteeing a pre-agreed level of service throughout the life of the contract.

Thought leadership with our sustainable infrastructure partners

The EBRD supports a comprehensive international policy agenda within the context of international financial institutions (IFIs) and the G20. This includes the G20’s Quality Infrastructure Agenda and private-sector mobilisation, the Global Infrastructure Facility (GIF), FAST-Infra, the
APMG Public-Private Partnerships Certification Programme (CP3P) and the MDB Infrastructure Cooperation Platform (ICP).

This approach to sustainable infrastructure goes well beyond the preparation of projects and is critical to the EBRD’s long-term strategic impact. These programmes help to enhance EBRD clients’ capacity to plan, prepare, deliver and monitor complex infrastructure projects.

G20 and IFI collaboration

The Global Infrastructure Facility, a G20 initiative, is a global collaboration platform that seeks to boost private investment in sustainable, high-quality infrastructure projects in developing countries and emerging markets.

The GIF provides technical assistance to emerging market governments, helping them with the preparation and structuring of infrastructure projects and programmes, with the aim of establishing bankable pipelines of infrastructure initiatives that attract private financing. The EBRD’s Sustainable Infrastructure Group (SIG) works closely with the GIF, with the Bank having received funding support for over half of all PPP advisory activities undertaken to date.

The CP3P is the definitive credential for individuals working on PPPs, designed to help standardise the PPP delivery process. This programme is implemented by the EBRD in partnership with the Asian Development Bank (ADB), the Inter-American Development Bank (IDB), the Islamic Development Bank (IsDB) and the World Bank Group (WBG), with funding from the Public-Private Infrastructure Advisory Facility (PPIAF), and aims to enhance international good practice in the area of PPPs. Approximately 10,000 public-sector officials have been granted CP3P certification since the programme was first established.

Our story

How we invest in changing lives

What we offer for businesses

Search

Sustainable infrastructure

The financing gap

High-quality sustainable infrastructure

The role of international financial institutions (IFIs)

Transport

Municipal

Energy

Preparation of infrastructure projects in the energy, transport and municipal sectors

The EBRD’s approach to the preparation of projects

Project scoping, due diligence and supervision

Promoting tried and tested reforms, regulatory improvements and best practices

Capacity building and institutional strengthening

Private-sector participation and public-private partnerships

PPP Advisory Unit

Benefits of PPPs

Thought leadership with our sustainable infrastructure partners

G20 and IFI collaboration

Sustainable infrastructure

The financing gap

High-quality sustainable infrastructure

The role of international financial institutions (IFIs)

Transport

Municipal

Energy

Energy

Municipal infrastructure

Transport

Preparation of infrastructure projects in the energy, transport and municipal sectors

The EBRD’s approach to the preparation of projects

Project scoping, due diligence and supervision

Promoting tried and tested reforms, regulatory improvements and best practices

Capacity building and institutional strengthening

Private-sector participation and public-private partnerships

PPP Advisory Unit

Benefits of PPPs

Thought leadership with our sustainable infrastructure partners

G20 and IFI collaboration