Executive Summary

Pipelines of infrastructure projects – or simply “project pipelines” – are a common concept in infrastructure planning and investment discussions. The term “pipelines” is often used to emphasise specific, upcoming investment opportunities, such as low-carbon infrastructure projects to develop renewable energy over the next decade. As such, project pipelines have become a key focal point of countries’ efforts to implement their climate and development commitments, including the Nationally Determined Contributions.

Meeting climate mitigation objectives requires the delivery of many new low-carbon infrastructure projects in a range of technologies, which of course need substantial investment. The latest global estimates of infrastructure investment needs may differ, but they all point to a financing gap of trillions of dollars per year until at least the year 2030. Public finance on its own will be insufficient. The private sector, therefore, will need to invest, build and support the development, operation and maintenance of those projects in the pipelines, as well as the retrofit or decommissioning of existing infrastructure to align it with mitigation and other sustainability objectives.

Climate mitigation discussions frequently highlight that the global infrastructure investment gap is not a result of the lack of capital. Rather, there are not enough identifiable, investment-ready and bankable projects to which private sector investors and project developers can commit time, effort and funding. To address this, governments can develop robust infrastructure project pipelines, including the provision of effective policy tools and institutional support to the development of the projects that constitute these pipelines. This report focuses on the concrete actions needed to develop low-carbon project pipelines.

Due to the lack of detailed infrastructure investment plans and poor integration of these plans into national policy contexts, it is not always clear what and where project investments are needed, when they should be built, how to finance them, or if they are sufficient to meet long-term objectives. Poorly defined infrastructure planning and inadequate policy links could open the door to investments that should not be made and could even hinder the flow of infrastructure investment. In contrast, well-defined infrastructure planning can facilitate investment flows; investors and project developers want to identify and source investment opportunities that match their needs from the available options, which are usually driven by government policies and goals.

An important prerequisite is to clarify what is meant by project pipelines, since the term is used and interpreted in many different ways. To date, no formal definition exists for pipelines nor has there been a comprehensive examination of the pipeline concept and its role in planning for or meeting climate objectives. Infrastructure planning efforts vary greatly in scope and scale and very much depend on specific country or regional contexts and infrastructure “starting points”. Governments tailor the development of their project pipelines based on these unique national and local contexts. This report suggests that a pipeline can only be as robust as the (investment-ready and bankable) projects that constitute it, as effective as institutions that deliver it, and as ambitious as the objectives to which it is linked.

Countries’ efforts to develop robust pipelines ultimately need to: promote and scale up investment in “suitable” projects across sectors; accommodate the requirements of investors; and allocate preparatory support to certain projects that may help a country achieve its mitigation objectives but which are not yet bankable. Literature review and discussions with experts suggest that, with respect to aligning infrastructure to long-term climate objectives, governments can develop robust pipelines of projects if they:

  • link policy making to forward-looking objective setting and the programmes and institutions to deliver them, providing overall co-ordination and leadership to champion project pipelines

  • focus on strengthening the interface and mechanisms that governments employ to disseminate information and convene actors, offering transparent processes and communicating relevant information on projects and the pipeline with the financing and investment community

  • take a holistic, whole-of-government approach to infrastructure planning and investment, feeding lessons back into policy-making processes to bolster the investment-enabling environment and providing funding or institutional support to projects when appropriate

  • fast-track suitable infrastructure project investment in a way that brings the carbon and energy intensities of the country’s economy to target levels, prioritising the deployment of “high-value” and strategically important projects and sectors

  • foster the development of a diverse set of bankable projects and promote business models suitable for private sector needs, setting strong eligibility criteria to determine which projects should be built and supported and which should not

  • increase country resilience to changes in climate and development needs, deploying infrastructure that remains pertinent and relevant over time and tailored to changing external conditions, and avoiding expensive path dependency or lock-in.

The report examines six factors in a series of case studies from a diverse set of countries and regions. These case studies explore the various attributes and important applications of the factors listed below and highlight emerging good practices of its use:

  1. 1. Leadership, as it relates to governments as a whole, or specific agencies, championing the development of a robust project pipeline.

  2. 2. Transparency, as it relates to having transparent approaches to developing sectoral investment plans, sourcing projects, and using data effectively.

  3. 3. Prioritising, as it relates to expediting strategically valuable projects – and shepherding them through development processes.

  4. 4. Project support, as it refers to various elements of the investment-enabling environment that affect the risk-return profiles of projects such as policy incentives, the supply of public funds and institutional support.

  5. 5. Eligibility criteria to ensure a pipeline of projects is properly aligned to or in support of long-term climate objectives and necessitate strong systems to assess which projects should be promoted and which should not.

  6. 6. Dynamic adaptability describes the capacity of governments to keep project pipelines aligned with policy objectives over time, to be pertinent and relevant in the long term, and tailored to changing external conditions.

The findings from this report aim to stimulate thinking on what it means for governments to build robust project pipelines and what can be done to strengthen them. The in-depth review of existing pipeline approaches highlight that:

  • governments and public institutions are already taking actions to develop robust pipelines in a range of country settings

  • these efforts nevertheless need to be strengthened significantly to meet long-term climate mitigation objectives

  • there is a considerable opportunity for governments to share lessons and bolster their own efforts by learning from the good practices of others.

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