IISD's brief on best practices for infrastructure banks indicates that the European Investment Bank (EIB) provides the best example of the products and services, with lending, blending, and advising.
The brief offers eight recommendations for the establishment of an infrastructure bank, including pursue finance financially viable projects, but not solely those that are revenue generating; avoid crowding out private capital and prioritize additionality.
January 2018: The International Institute for Sustainable Development (IISD) has published a brief on best practices for the establishment of infrastructure banks. The brief notes that, while many countries are setting ambitious goals for infrastructure development, full implementation is beyond most governments’ budgets. As a result, countries need to explore innovative financial solutions, such as infrastructure banks, in order to leverage government resources to attract private capital.
The brief indicates that the European Investment Bank (EIB) provides the best example of the products and services that an infrastructure bank could offer to stimulate infrastructure investments. These projects and services are identified as: lending, such as project and framework loans; blending, to enable access to financing from other sources such as through guarantees and project bonds; and advising, with administration and project management services.
The brief also reviews the products and services offered by the European Bank for Reconstruction and Development (EBRD), Infrastructure Development Fund Netherlands, U.K. Treasury Infrastructure Finance Unit (TIFU), UK’s Green Investment Bank (GIB), Municipality Finance Plc Finland (MuniFin), and Nordic Investment Bank (NIB).
The brief offers eight recommendations for the establishment of an infrastructure bank: pursue finance financially viable projects, but not solely those that are revenue generating; avoid crowding out private capital and prioritize additionality; tap capital markets for additional funds; include sustainability as a criteria for project selection and apply stringent environmental standards; finance projects with high social and economic multipliers; leverage the bank’s resources by providing risk capital or credit enhancement; provide project preparation and technical assistance; and finance projects at all levels of government. [Infrastructure Banks: Solutions and Best Practices]