The updated report from the Institution of Civil Engineers, Financing Low-Carbon Infrastructure, suggests that civil engineers can bridge the gap for investors who lack the technical insight to interpret evidence and decide whether a project is worthy of investment.
It comes as delegates at the COP27 climate summit in Egypt debate how to turn the money pledged by pension funds, finance institutions and governments in Glasgow in 2021 into shovel ready projects. Global spending on physical assets to achieve net zero is expected to average $9.2tn per year between now and 2050.
Despite an appetite in the private sector to invest in green infrastructure, the report found that many projects fail to attract funding, partly due to the high initial construction costs and the long timelines associated with seeing value from infrastructure projects. The report also notes anxiety among investors around the risks and the quantifiable carbon reductions of some projects, especially those that use untested technologies.
In a statement, report contributor Alex Doyle, deputy chief impact officer at the UK Infrastructure Bank, said: "Engineers are one of the most important parts of the green finance story because, ultimately, everything comes back to the asset, and the asset is always designed with an engineer."
The report seeks to provide civil engineers with an introduction to some of the investment mechanisms used to finance infrastructure projects, explaining the potential concerns financiers may have when considering whether to invest, and how to answer these.
It also highlights case studies of innovative financial models that have been used, including for the Dogger Bank Wind Farm and associated South Bank Quay in north-east England, the Orca direct air carbon capture and storage plant in Iceland, and community renewable energy projects in South Africa.
Mark Hansford, director of knowledge at the ICE, said: “There is a huge opportunity to unlock investment in the clean, low-carbon infrastructure of tomorrow. Greater collaboration between the engineering and finance communities could be an important catalyst. I hope this report, and the network we are creating, will help professionals from different disciplines talk to each other and foster a spirit of cooperation.”
The report recommends that the ICE set up a new Knowledge Network on financing infrastructure, to support civil engineers learning about green finance, and to promote the ways in which engineers can help de-risk investment.
It also calls on civil engineers to approach all infrastructure projects with decarbonisation in mind, and to be transparent with their data and calculations to give financiers the evidence they need to invest.