Vision 2030: A Thriving Infrastructure Ecosystem

The year is 2030 and the way in which infrastructure is financed and developed has changed profoundly. A thriving infrastructure ecosystem has begun to drive climate resilience and sustainable development throughout the world at a pace that was unimaginable just a few years ago.

The investment gap – estimated at $3 trillion back in 2022(1) – has closed significantly, while investors now put their money into countries and sectors with a confidence that was for a long time absent. As a whole, the sector is now originating and building projects, and distributing funds on a faster cycle, matching capital to infrastructure financing at the appropriate stage and scale.

Even more importantly, the number of people without access to basic infrastructure like water and electricity has dropped significantly, greenhouse gas emissions are finally dropping, and the rate of biodiversity loss has been reversed.

So how did we get here?

Chief among some notable successes for the sector has been the burgeoning pipeline of bankable projects, with a large, diversified pool of operational de-risked assets now attracting private investment at scale. As one of the biggest challenges facing the sector, to get here by 2030 was never going to be a simple journey. So it has proved, with a number of key factors contributing along the way.

One instrumental factor has been the focus on early-stage project development (and the deployment of patient capital) – a stage where heightened investor risk, both real and perceived, had for many years acted as a barrier to project progress. At PIDG, this has long been the work of our development arms: InfraCo Africa and InfraCo Asia. Through them we have originated, developed, structured, invested in and managed projects, with the aim of addressing early-stage risks and accelerating progress through to operation. We have also deployed equity to address one of the most persistent financing gaps in today’s market: existing platforms or players ready to scale-up, pilot new products, or enter new markets – especially in the off-grid and mini-grid space.

In 2024, we had already turned $2 billion in official development assistance (ODA) into $5.7 billion in investment commitments by PIDG in projects worth $41 billion. This means that for every dollar of ODA, 20 times its value was catalysed, with over half of that investment coming from the private sector. Now in 2030, we are proud to say we have doubled our yearly commitments. Our investments are moving markets and accelerating much larger finance flows as a result.

Philanthropy in action?

This focus on early-stage project development hasn’t been limited to institutional investors either. Philanthropists have also played an important role in helping to build the pipeline of bankable projects. On the back of discussions that grew out of COP26 and COP27, many saw the pressing need to scale up a new type of investment platform combining philanthropy, development finance institutions and the private sector.

A prevalence of such collaborative platforms has since emerged, making targeted investments that bridge gaps at the early stages of climate-focused projects. It has been wonderful to see these projects consistently mobilising private capital in multiples that far exceed the initial investments – and the collective approach to project development that is now in place. We at PIDG have focused on orienting platform players toward a shared set of rules, making investment decisions easier to compare.

With almost three decades of experience in mobilising blended finance, we at PIDG are thrilled that the approach has gained such widespread adoption. Across project preparation and development, guarantees, local currency credit enhancement, and public-private partnership development facilities, it has become the go-to method for getting capital moving and multiplying, throughout the project lifecycle but especially at the early stages. By combining technical assistance grants with long-term, patient capital, it has reduced financial risk and ‘crowded in’ the private sector in ever greater numbers.

Along the way, we have seen an improved understanding of the role of development capital within a blended finance structure. Today, in 2030, I am happy to say there is a widespread recognition that development finance is here to do just enough to ‘tip the scales’, making opportunities attractive and viable without subsidising private profits. As a result, instances of development finance ‘crowding out’ private investors are now few and far between. In 2030, it is a standard practice to call out development actors who try to take the place of private investors before deals are done.

Focusing on the opportunity

Accompanying this has been a subtle yet influential shift in the blended finance narrative. What was for many years an inward-looking conversation, conducted in the language of development goals and needs, eventually shifted to focus on the investment opportunity. In emphasising the viability and attractiveness of these opportunities, the new narrative is helping to drive more and more private capital into climate projects.

Multilateral development banks (MDBs) also deserve much credit for re-orienting themselves to play a more dynamic role in meeting the needs of the sector. By understanding themselves and their resources not as a complete answer but rather as a catalyst, they have begun to unlock the much larger resources of the private sector, in multiples that far exceed their own commitments.

MDBs – as well as development finance institutions (DFIs) and their government shareholders more generally – have also embraced a new openness to risk. This shift was critical to the success of the blended finance approach, which requires development capital to absorb some of the risk where private capital is unable to do so. As part of this, we have seen significant governance changes, a realignment of internal incentives with the needs of the sector, and new initiatives aimed at pooling risk. The deployment of performance-linked instruments has also allowed all parties to share the risks and opportunities more equitably. In combination, these factors have enabled more risk to be embraced in the pursuit of greater impact.

Pulling together, as one

Thanks to a coordinated effort across the sector, standards have begun to align, helping investors to more easily understand the opportunities they are looking at. This has included much needed certification schemes such as the Blue Dot Network and FASTInfra which, especially since merging into a single industry-recognised scheme in 2028, have allowed ‘quality’ projects to be quickly and reliably identified. More broadly, this has enabled institutional investors to better understand the infrastructure asset class in developing economies. This standardisation has also extended to project documentation (such as Power Purchase Agreements) and credit ratings, removing much of the friction slowing the development and financing of projects in emerging and developing markets.

Infrastructure has also seen a new strategic alignment with the emergence of country-sector platform partnerships. What began as a vision – presented jointly by the heads of the MDBs, IMF and Climate Funds at COP28 in 2023 – has seen development finance partners work in a far more coordinated way, aligned to countries’ fiscal and policy frameworks. Coupled with a tripling of institutional finance capacity, this has allowed support to be galvanised around countries’ sectoral priorities as they strive to meet climate goals and ensure a just transition.

The right finance, at the right time

Expanding the project pipeline, vital as it is, was only ever going to be one side of the coin. Equally important in meeting the world’s infrastructure needs is the availability of the right finance, at the right time. Here too, great strides have been made in easing the path of capital, with a broad suite of financial products now widely available to projects, at every stage. This has been helped by the recognition that duplicate product offerings must be avoided, to allow scarce capital to be deployed to those platforms with a proven track record.

In 2030, we can see domestic capital markets in emerging and developing economies functioning more effectively, with loans increasingly offered for the longer terms that infrastructure projects need. Credit enhancement facilities (CEFs) have been instrumental here, by providing local-currency guarantees that in effect enhance the credit rating of projects. This has enabled risk-averse domestic lenders – such as pension funds, insurance companies and banks – to grow into what was a new and unfamiliar space, building their understanding of the infrastructure asset class through experience. And with local-currency finance widely available, projects are now able to avoid the exchange-rate risk associated with borrowing in a foreign currency.

A trustworthy, sustainable asset class has also been established, including a proliferation of gender and green bonds. These are now driving progress towards development goals while also allowing investors the liquidity to ramp their investments up and down when needed.

Of great help also has been an erosion of perceived risks, with private investors now increasingly confident putting their money into countries and sectors where they previously were not. Much of this is due to the pioneering investors and governments of earlier years, including PIDG’s own government owners. By developing, financing and delivering projects outside of the comfort zones of traditional infrastructure investment, they showed the infrastructure sector what was possible.

What we have seen overall is that multiple approaches to raising funds are needed. Within PIDG alone, our financing capabilities range from technical assistance grants, to equity and loans, to credit guarantees. For an example of how PIDG’s approach has evolved to meet market needs, we can look to the Emerging Africa and Asia Infrastructure Fund (EAAIF), which has completed some of the largest capital raises by a blended finance debt fund in recent years.

Generating the impact needed

At PIDG, our efforts to expand the pipeline of projects and unlock capital have all been to achieve our ultimate aim of accelerating climate resilience and sustainable development, while protecting and restoring nature. How wonderful it is to say that, in 2030, impact is more often than not now ‘baked’ into projects. From climate resilience and biodiversity protection to gender equality and inclusion, it is increasingly expected that a project’s design will incorporate the Sustainable Development Goals. This positive impact on people and planet is now priced into investments.?

As with the expansion of the project pipeline, efforts to embed the right performance and reporting metrics across the sector have become characterised by far greater alignment and coordination. IFRS Sustainability Standards are now the norm, covering, climate, nature, gender equality and inclusion, building on early work of the Taskforce on Nature-related Financial Disclosures (TNFD), the Taskforce on Climate-related Financial Disclosures (TCFD), and the ISO37001 anti-bribery standard.

This alignment has enabled much of the progress that is now being made on all fronts. New infrastructure is helping communities adapt to, and stay resilient in the face of, inevitable climate change while accelerating the transition to net zero. Likewise, there is now a real possibility that infrastructure may soon be considered a net contributor to biodiversity protection.

While the Paris goals remain the huge challenge facing our planet and species, we can say that they are now in clearer focus and appear far more achievable than they did as recently as 2025.

A new culture of collaboration

If there is one common feature that runs throughout all of the infrastructure sector’s recent success, it has been the openness with which partners of all shapes and sizes have come together to overcome challenges. From private investors and philanthropists, to NGOs, public (local, national and international) governments, DFIs and grant bodies. Wherever we look, we see a dynamic and productive infrastructure ecosystem: silos have been broken down, efforts have been strategically aligned, standards and frameworks have been harmonised, and learnings have been shared.

Given the scale of partnership and the deep, innovative culture of collaboration we have seen, it should come as no surprise that capital is mobilising and action accelerating like never before. At PIDG, we are supporting that with new members – insurers are now providing some of the funds that power our work, and we have established a pari passu fund arrangement with a sovereign wealth fund. We are seeing new pools of capital being made available for our work from multiple DFIs, and we are serving as the connective tissue to coordinate the strengths of all the players in our ecosystem.?

While our biggest challenges still lie ahead, we have shown ourselves the path to success.

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This is our vision for 2030. What do you think? If it aligns with your goals, then we want to talk to you about how, together, we can make it happen.

1 https://www.strategyand.pwc.com/lu/en/insights/scaling-up-blended-finance.html

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