161103 Mueller_Sustainable_infrastructure_imperative_07_S

The sustainable infrastructure imperative

Harvard Conference on Sustainable Cities

Cambridge, Boston 4th of November 2016

Sven-Uwe Mueller

Senior Advisor Sustainable Infrastructure

Seconded by GIZ

Email: [email protected]

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• Founded in 1959.

• Mission: To improve lives in Latin America and the Caribbean countries by supporting

efforts to reduce poverty and inequality in a sustainable, climate friendly way.

• IADB finances sovereign and private sector projects and programs through loans,

guarantees, grants and technical assistance in the LAC region.

• Owned by 48 member countries

26 Latin American and Caribbean countries and 22 non-borrowing countries.

• 2,000 employees across 4 continents with headquarters in Washington DC.

• IADB is rated AAA with stable outlook; triple-A rating since 1962.

WWW.IADB.ORG/INVESTORS All figures are as of December 31, 2015 unless otherwise noted.

About the Inter-American Development Bank (IADB)

To Promote Sustainable Infrastructure the Bank has Multiple Instruments

Financial Products Loans, Grants, Guarantees, Investments (IIC

and MIF only), Technical Cooperation Knowledge Generation Research and Data Project Preparation Facilities Infrafund, NDC invest, SECCI, …

1 Integration & Trade: Trade 79% and Regional Integration 21% Numbers might not add up due to rounding.

2015 Loan Approvals by Sector

Infrastructure &

Environment 39%

Institutions for

Development 32%

Social Sector 22%

Integration & Trade

8%

Energy 33%

Transport 25%

Water & Sanitation

22%

Environment & Natural Disasters

16%

Agriculture & Rural

Development 4%

WWW.IADB.ORG/INVESTORS All figures are as of December 31, 2015 unless otherwise noted.

Financial Markets

41%

Reform/ Modernization Of

The State

25%

Urban Development

& Housing 20%

Science & Technology

6%

Private Firms & SME

Development

5%

Industry

2%

• Livelihoods

• Gender

• Health and safety

• Indigenous people

• Resettlement

• Cultural heritage

• Employment

•Landscapes

•Biodiversity

•Resource use

•Wastes (GHGs)

•Noise

•Disasters

•Resilience

• Access to services

• Economic viability

• Maintenance

• Cost recovery

• Benefit sharing

• Poverty reduction

• Strategic need

• Planning

• Design

• Governance

• Stakeholder engagement

• Transparency

• Accountability

• Capacity building

Institu-tional

Economic and

Financial

Social Environment

Sustainability is more than safeguards

Sustainable infrastructure is good, but...

...there are challenges:

•The challenge of speed

•The challenge of upstream planning

•The challenge of stakeholder involvement

•The challenge of proving the value of SI

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The challenge of speed

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Jeffrey Sachs: Sustainable infrastructure after the Automobile Age.

“I PROPOSE THE opposite approach to short-term “stimulus.” I’d call it “long-term thinking,” even “long-term planning” (…). Rather than trying to deploy construction workers within the next 60 days, I propose that we envision the kind of built environment we want for the next 60 years.”

Source: Boston Globe, Opinion, Sept. 26, 2016

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Upstream planning leads to more efficient public investment and better projects

Source: adapted from IMF 2015 (Fig.7 from p.39, The sustainable infrastructure imperative)

The challenge of upstream planning: It is not the traditional focus of MDB’s

BANK PROJECT CYCLE

The challenge of involving stakeholders: This happens, if you don’t do it properly…

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Example for stakeholder involvement in Montes del Plata Paper Pulp Plant in Uruguay

Montes del Plata’s industrial complex (Punta Pereira, Colonia):

• A state-of-the-art cellulose pulp production mill.

• A biomass energy creation station.

• A port terminal for pulp exports and supply entry.

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Mitigating social project risks by involving the communities

Measures taken:

• Analysis of potential impacts

• Capacity building among the local workforce

• Productive integration with local farmers

• Major concerns at the construction site

• Addressing the impacts of increasing traffic

• Large influxes of workers in small communities

• Active dialogues

Mitigating project risks by improving health and safety for

the affected communities

Priority area of action: Reduce traffic on roads and truck fatalities

Measures taken:

• 700 drivers trained in safety

and driving courses

• Real time monitoring of the

truck fleet with GPS

• Reducing truck traffic by

setting up a system of barges

for river transport

• First company in Latin

America to receive roadway

safety certification by the

Fédération Internationale de

l`Automobile (FIA)

The challenge of proving the value of sustainable infrastructure:

• Sustainable infrastructure pays off:

Involving stakeholders from the very beginning decreases the risk of social conflict and opposition

Better upfront planning and integration in masterplans avoids wrongly sized projects and reduces cost overruns

Improving energy & resource efficiency reduces OPEX

Better planning makes project implementation more efficient

Changing utilization patterns to more sustainable pathways reduces the need for additional infrastructure investments

Using ecosystem services and green infrastructure reduces need for grey infrastructure

Integrating the external costs of projects shifts the project economics towards sustainability

Better upstream planning

Effective engagement of

stakeholders and local communities

Building a better business case

Sustainable infrastructure

project design & execution

How to ensure sustainability of infrastructure?

Learn more at: www.iadb.org/sustainability THANK YOU! Sven-Uwe Mueller [email protected]