This presentation was delivered during the 6th Meeting of the OECD Southeast Asia Regional Programme’s Regional Policy Network on Sustainable Infrastructure, which took place on 25-26 April 2022 in Manila, the Philippines. The OECD’s Public Governance Directorate and Environment Directorate teamed up with the OECD Korea Policy Centre to organise the event. The National Economic and Development Authority (NEDA) of the Philippines co-chaired the event alongside the United States, and the Public Private Partnership Centre of the Philippines graciously provided the venue. For more details about the meeting, including the agenda and a short summary record, please visit: https://www.oecd.org/site/sipa/events/sipa-searp-philippines-2022.htm.

1. Virginie Marchal, SIPA Programme Manager, South East Asia
Regional Policy Network on Sustainable Infrastructure
25 April 2022
Manila, Philippines

2. A triple emergency
1. INFRASTRUCTURE GAP
• ASEAN $210 bn/ year
2. INCLUSIVE ECONOMIC
RECOVERY
• GDP SEA -4% 2020, +3%
2021
• Impact on the poorest and
SMEs, increased inequalities
3. CLIMATE AND
BIODIVERSITY
EMERGENCY
Infrastructure needs per year by 2030
Current spending

3. The world’s energy, transport,
buildings and water systems emit
more than 60% of today’s
greenhouse gas emissions

4. We have just over a decade to drastically reduce
emissions
A radical transformation of our infrastructure systems is needed

5. • Improve reliability of infrastructure service
provision, by reducing the severity and
frequency of disruption (e.g. less frequent
power shortages)
• Increase asset life of infrastructure, avoid
the cost of retrofitting
• Increase efficiency of service provision
(e.g. hydropower resources)
• Protect asset returns and reduce the risk of
stranded assets
• Co-benefits (e.g. preservation of
ecosystems, climate mitigation)
13 February 2020 5
Building resilience in our infrastructure systems is
essential
The benefits of building resilient infrastructure overall outweight the costs e.g. spending USD 50
billion per year (annualised) on flood defences for coastal cities would reduce expected losses in
2050 from USD 1 trillion to USD 60-63 billion (Hallegatte et al. 2013)

6. Based on OECD 2017 Investing in Climate, Investing in growth
Low-carbon, resilient infrastructure deliver on other
development goals

7. Infrastructure at the center
of climate and sustainable
development goals
Based on Waage et al 2015,
http://dx.doi.org/10.1016/S2214-109X(15)70112-9

8. A unique momentum for transformational climate
action
• At COP 26, many economies committed to ‘net-zero’ emission by
mid-century (China, Japan, Korea, Vietnam, Thailand….)
• Shrinking finance for coal-related investment (IFIs, bilateral export
credit, institutional investors)
• Massive national rescue and post-COVID recovery packages – 14.6
trillion USD (17 trillion USD)
• International infrastructure initiatives (BRI, Build Back Better World
(B3W))
• Energy security at the top of countries’s agenda
Channel new sources of finance in projects compatible with Paris goals and SDGs

9. 9
Current investment trends are not compatible with a
net zero pathway
$14.6 tn
Source: OECD 2021 interim outlook
How to orient investment flows into projects that are good for climate and growth?
0
1000
2000
3000
4000
2016-2020 NZE 2026-2030
Clean electricity
Efficiency and end use
Low emission fuels
billion USD/yr
Investment needs for net-zero
Source: OECD/IEA (2021)

10. Six transformative
areas to align financial flows with
low-emission,
resilient infrastructure
PHOTO: NASA

11. Why is it transformative?
• Avoid emissions lock-in
• Prevent stranded assets
Priority action areas
• Develop long-term low-emission strategies, through cross-ministry
collaboration and stakeholder consultation with development at its
core
• Strengthen climate capacity
• Develop pipelines of infrastructure projects compatible with climate
goals
• Mainstream climate-resilience considerations across planning
practices
• Prepare for different ‘futures’ through specialised foresight personnel
or units within ministries

12. Why is it transformative?
• Budgetary practices influence behaviours
• Current dependence of many governments on fossil fuel revenues
puts long-term fiscal sustainability at risk
Priority action areas
• Diversify government revenue streams
• Align fiscal incentives with climate objectives
• Leverage public procurement practices and indirect
spending through SOEs or development finance
institutions
• Ensure an inclusive transition along the way to facilitate
social acceptance

13. Why is it transformative?
• Sustainable infrastructure financing faces two problems:
• The need to scale-up all types of infrastructure finance
• The need to shift finance to the right types of infrastructure
Priority action areas
• Mainstream climate considerations in investment decisions
and strategies
• Disclose climate-related risks and opportunities
• Rethink financial supervision in light of the direct links
between long-term financial stability and climate change
effects

14. Why is it transformative?
• Today’s infrastructure choices will:
• determine the extent and impact of climate change
• contribute to the vulnerability or resilience of urban societies
• create the backbone for a strong, inclusive urban development
Priority action areas
• Integrate land-use and transport policies
• Align national and local fiscal regulations with investment
needs in cities
• Build climate-related and project finance capacity in cities
• Seize the development benefits of low-emission, resilient
planning

15. SIPA: An ambitious technical assistance and
capacity building programme
PROJECT
GOALS
ACTIVITIES
• Country-level technical assistance, policy dialogues and capacity building in
Thailand, Indonesia, the Philippines (and Kazakhstan, Uzbekistan and Mongolia)
• Regional and international peer learning through regional conferences,
trainings and workshops
• Support Asian governments transition towards net-zero, resilient
energy, transport and industry systems
• Leverage business and private sector investments
• Promote international standards for sustainable infrastructure
PARTNERS
Orientation of infrastructure investments on the goals of the Paris Agreement and the 2030 Agenda
in Central and Southeast Asia
21_I_405_ASIA_M_Infra Asia

16. A menu of activities across four transformative
areas
1. PLANNING
3. MOBILISING
FINANCIERS AND
BUSINESSES
2. ENABLING POLICIES
IN ENERGY,
TRANSPORT,
INDUSTRY
• Decarbonising transport strategies (national and
regional)
• Clean Energy Finance and Investment reviews
• Greening energy-intensive industries
Key partners: Sectoral Ministries, Ministry of Finance
• Long-term strategic infrastructure planning
• Project-level evaluation and prioritisation
Key partners (and coordinators): Planning Agencies
• Sustainable finance principles
• Due diligence for responsible business conduct
Key partners: Ministry of Finance, Businesses
4. REGIONAL AND
INTERNATIONAL PEER
LEARNING
• Regional Policy Network on Sustainable
Infrastructure
• Regional training programmes through local
knowledge institutions

17. • Achieving the climate and development goals requires a
fundamental transformation of our infrastructure systems
• This transformation requires a whole-of-government, whole-of-
society approach, to move from sectoral siloes to systems thinking
• Planning agencies, sectoral ministries, public and private finance
insitutions are at the center of this transformation
• Good governance principles matter
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Conclusion

18. THANK YOU
SIPA@OECD.ORG
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