Quality Infrastructure

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QUALITY INFRASTRUCTURE RESPONSIBLE & VIABLE OVER THE LIFECYCLE

Greg Medcraft Director Directorate for Financial and Enterprise Affairs

QUALITY INFRASTRUCTURE – THE INVESTOR’S PERSPECTIVE

Viable

Quality infrastructure Responsible

Long-term lifecycle

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1. POLICY ENVIRONMENT

POLICY FIT FOR PURPOSE? Infrastructure needs: $26 trillion in Asia, $95 trillion globally by 2030. Do we have a conducive policy environment? At the moment: 1. Lack of adequate national strategies and frameworks 2. Lack of connectivity and transparency in processes and methodologies, weak standardisation 3. Uneven environmental, financing and governance practices.

Filling the gap with viable, responsible infrastructure requires a whole-of-government approach. 3

1. POLICY ENVIRONMENT

WHAT GOOD LOOKS LIKE Guidelines for Quality Infrastructure 1. Economic efficiency 2. Resilience and safety 3. Job creation, capacity building 4. Environmental and social 5. Alignment with local development strategies

6. Good governance 7. Open access 8. Transparency 9. Debt sustainability 10. Mobilisation of private capital

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1. POLICY ENVIRONMENT

Standards and Guidelines

IMPLEMENTING BEST PRACTICE Principles for sustainable infrastructure strategies 2020

New benchmarks and indicators; new firm level database 2019/20

Guidelines on quality infrastructure 2019

Dedicated country reviews and guidance by OECD 2019/20

Convene stakeholders disseminate policy messages and cooperate internationally 2019/20

Capacity building through, implementation guidance and technical assistance 2019/20

Connecting the dots: dedicated projects with private and public partners 2019/20

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2. MARKET ENVIRONMENT

COMPARABILITY DRIVES ESG OUTCOMES

Q: ESG as a means to manage risks. How do we make ESG performance comparable? A: Make ESG performance comparable between infrastructure projects Two initiatives:

1. OECD Infrastructure Finance Initiative 2. Integrated Profit and Loss Initiative 6

2. MARKET ENVIRONMENT

INFRASTRUCTURE FINANCING INITIATIVE Identifies opportunities and use-cases

1. OECD/ Deloitte Study

Tests use cases, identifies principles

Lowers cost of capital

4. Capital Charge discount

lowering the cost of capital

Standardised asset class to grow investor base

2. Real-world pilot

3. STC Framework

Simple, transparent, comparable

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2. MARKET ENVIRONMENT

INTEGRATED PROFIT & LOSS INITIATIVE

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