This high-level report explores what is needed in order to improve the connection between green-labelled funds and sustainable waterborne infrastructure projects.

Recent years have seen an increase in publications and forums discussing the financing of nature-based solutions and investments in nature. In this high-level study, representatives of the dredging sector, Swiss Re and B Capital Partners build on these publications in a joint exploration to identify and clarify the role of private finance in sustainable marine and freshwater infrastructure. The purpose of this exploration is twofold: to raise awareness of sustainable dredging solutions within the financial community and to start building a bridge between the worlds of sustainable dredging and private finance.

‘Both the sustainable marine and freshwater infrastructure sector and the financial sector seek to scale up their green portfolio, and it is quite obvious that synergy can be found in cooperation’, explains Arjan Hijdra, Managing Director of Vital Ports. ‘However, both sectors are mutually unfamiliar with each other’s environment, which hinders to capture this synergy right away. We believe that this dedicated report could help further engagement between these two sectors.’

Against a background of substantial future infrastructure investment needs, particularly evident in coastal protection, there is a widespread ambition to scale up private finance. Meeting these investment needs cannot be done through public resources alone. There is a critical complementary and supporting role that private capital can play to bridge the investment gap. Marine and freshwater infrastructure presents a promising financing opportunity. The recent developments in sustainable concepts could be an attractive avenue for private investors seeking to invest in sustainable infrastructure. This study aims to serve as a starting point for inspiration and to provide content for further dialogue on potential financing mechanisms for projects.

Financing Sustainable Marine and Freshwater Infrastructure

Within the early sections of the study, sustainable marine and freshwater infrastructure projects are characterised based on technical (physical) features and cashflow sources. In practice, projects tend to be highly tailor-made to both the physical context and the institutional setting. To illustrate how real-life projects can be viewed through these lenses, the report includes a series of case studies that provide tangible ideas on how things did or didn’t work.

The study addresses how public-private partnership (PPP) and concession-type marine and freshwater projects can ensure a commensurate private capital remuneration. Furthermore, it proves that industry specific concession-type legal frameworks, albeit still in development and not widely available yet, are coherent with usual infrastructure fund managers’ and lenders’ investment requirements. The report demonstrates innovative financial structures that are already being implemented but are less well known by the financial investors. In short, showing that green marine, waterways and coastal projects, which return long-term cashflows, can be appealing for private capital.

Specifications

Authors: Arjan Hijdra, Christine Kng, Kathleen de Wit, Lotte Vandekeybus, Mark van Geest, Polite Laboyrie and Sien Kok
Publisher: IADC/CEDA/Vital Ports, in partnership with Swiss Re and B Capital Partners
Published: September 2021
Language: English
Price: Free digital download
Available from https://www.financing-smafi.org