Global investors and development finance institutions join forces to unlock trillions for vital projects
Trillions of dollars in private capital are now being targeted for emerging market infrastructure, as development finance institutions (DFIs) from the Group of Seven (G7) economies launch a new initiative to address the global investment gap.
According to Allianz Global Investors, the world needs to invest about US$4.2tn annually in infrastructure, with two-thirds of this requirement in emerging markets—a challenge intensified by reductions in aid and bilateral lending from wealthier nations.
The newly established G7 Infrastructure Investment Council is led by FinDev Canada under Canada’s G7 presidency. It brings together development finance institutions (DFIs) from the UK, France, Germany, Japan, Italy, and the European Investment Bank.
FinDev Canada reports that the council also includes major institutional investors such as BlackRock’s Global Infrastructure Partners, Actis, Brookfield, Macquarie, and Ninety One, among others.
The Council aims to co-create investment vehicles and facilitate the flow of private capital into emerging markets, focusing on sectors such as energy, digital infrastructure, transportation, and water systems.
Barriers such as limited access to power, clean water, and modern transport networks continue to hinder economic development in many emerging economies, and private investment has often been constrained by a range of market obstacles.
The Council intends to address these issues by enabling knowledge exchange and structured engagement between DFIs and private sector partners, according to a statement from FinDev Canada.
Lori Kerr, chief executive officer of FinDev Canada, said the initiative “will mobilise capital at scale for infrastructure and advance economic prosperity and sustainable development in emerging and developing markets.”
Randeep Sarai, Secretary of State (International Development), noted that the Council will help private investors coordinate with DFIs to support infrastructure projects “like roads, energy and water systems” in the countries that need them most.
The Investor Leadership Network (ILN), launched by the G7 in 2018, will support the Council’s efforts to facilitate collaboration among institutional investors and drive the transition to a sustainable global economy, as per FinDev Canada.
The Council’s approach centres on designing investment vehicles and sharing market expertise to unlock private capital and address the scale and complexity of infrastructure needs in emerging markets.
