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View this email in your browser <https://mailchi.mp/law/perspective-305?e=763bcf158c> 哥伦比亚大学国际直接投资展望中文版都可以在我们的网站查看： http://ccsi.columbia.edu/publications/columbia-fdi-perspectives. <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=716ad5191f&e=763bcf158c> *Columbia FDI Perspectives* Perspectives on topical foreign direct investment issues No. 305 May 17, 2021 Editor-in-Chief: Karl P. Sauvant ([log in to unmask]) Managing Editor: Riccardo Loschi ([log in to unmask]) *Mobilizing FDI for sustainable infrastructure investment* <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=dcd9681780&e=763bcf158c> * <#m_-219439110489528731__edn1> by Munir Akram** <#m_-219439110489528731__edn2> Achieving the Sustainable Development Goals <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=7b33b963ab&e=763bcf158c> (SDGs) by 2030 and net zero carbon emissions by 2050 requires a global transformation in infrastructure—energy, transport, housing, communications, industrial and agricultural production—to a sustainable model. Investment of US$l00-120 trillion in sustainable infrastructure will be needed to reach the target of zero emissions by 2050. According to UNCTAD <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=050866a945&e=763bcf158c>, of the current annual funding gap of at least US$2.5 trillion, two-thirds is in developing countries, where infrastructure investment declined by US$50 billion in 2020. In 2017 <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=e2739d8853&e=763bcf158c>, 83% of infrastructure investment was publicly funded. China’s Belt and Road projects and Europe’s Green Deal are funded mostly from public sources. The vast majority of developing countries do not have the public resources to finance infrastructure investments, nor the capacity to borrow at the low interest rates available to the advanced economies. It is evident that, due to the scale of the investment needed, both advanced economies and especially developing countries will have to find ways to access private money—and that means primarily FDI for the developing countries—to meet these goals. Global wealth in 2019 rose to US$399 trillion <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=791ff77af4&e=763bcf158c>, of which US$50 trillion was held by retirement and pension funds <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=400712f8f8&e=763bcf158c>. As Mark Carney, former BOE Governor, proposed, we need a financial system that “turns billions of dollars of public money into trillions of private investments.”[1] <#m_-219439110489528731__edn3> Private asset holders have remained reluctant to invest in infrastructure where projects are long term and complex, with lumpy up-front costs and uncertain returns. The limited private investment has been mostly in the downstream stages of projects, once public investment has underwritten the early-stage risks, and mostly in the form of loans rather than equity. Most developing countries have been unable to secure private infrastructure investment for multiple reasons: weak capacity to identify, prepare, structure, and negotiate complex infrastructure projects; a shortage of public money to undertake the risky, early-stage project development; high country and currency risk; the high costs of capital (with market interest rates ranging from 5-15%); an insufficiently attractive and/or stable investment environment (e.g., deficient regulatory frameworks, the absence of bankruptcy laws and “workout” mechanisms); and little or no direct interaction with private investors, asset managers, credit rating agencies, and other market players. In recent years, several mechanisms have been established to generate sustainable infrastructure investment in developing countries. Examples are the World Bank’s Global Infrastructure Facility and the G20’s Global Infrastructure Forum and Hub. There is also considerable public pressure on companies and asset managers to allocate to sustainable projects. The results are quite modest so far. Investment in sustainable development is a tiny fraction of total global investment. For example, only 1% of assets under management in Europe, North America and Australia are deployed in “sustainable” investments.[2] <#m_-219439110489528731__edn4> The Green Bond market <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=48b17dfb5a&e=763bcf158c> is only around US$13 billion, i.e., 2.5% of sustainable development investment since 2009. On the one hand, private investors complain about the absence of a large enough pipeline of sustainable investment projects and opportunities. On the other hand, some development institutions caution against the “green washing” of investments in the absence of clear criteria regarding “sustainability”. Clearly, a comprehensive and in-depth analysis and discussion, involving all stakeholders—private asset managers, development institutions, donors, and developing country governments—is needed to determine what it takes to dramatically scale up private sector investment in sustainable infrastructure. The United Nations, given its universal membership, convening power and its country offices in almost all countries, is well placed to lead such an effort. A multi-stakeholder policy dialogue, under UN auspices, could, inter alia, develop a template for national and international frameworks to incentivize private investment in sustainable development projects, especially in developing countries; propose and develop measures to de-risk sustainable infrastructure investment (e.g., through blended finance, green bonds, sovereign guarantees, insurance schemes, or “first loss” mechanisms); and enlarge the capability of developing countries to access public finance (e.g., from international financial institutions, the Global Environment Facility and other existing and new facilities). It could also develop agreed criteria to determine the sustainable nature of projects. By coherently utilizing the nearly 200 country offices of the UN system, the World Bank Group and regional development banks, a multi-stakeholder mechanism (e.g., the Financing for Development Forum’s Investment Fair) could help developing countries to acquire the capacity to identify, prepare and structure sustainable infrastructure projects, thus building a sizable pipeline of such projects; build the regulatory and equitable incentive structures to attract private and public investment; and accelerate the early-stage preparation of projects. Such a multi stakeholder mechanism could also develop a database of sustainable infrastructure projects and connect existing platforms (e.g., World Bank, G20, Africa) with each other, to ensure the real-time exchange of information among stakeholders, to accelerate decisions. Such an inclusive global approach offers the best prospect of mobilizing sizable private sector investment to realize the SDGs and transition to a global green economy. ------------------------------ * <#m_-219439110489528731__ednref1> *The Columbia FDI Perspectives are a forum for public debate. The views expressed by the author(s) do not reflect the opinions of CCSI or Columbia University or our partners and supporters. Columbia FDI Perspectives (ISSN 2158-3579) is a peer-reviewed series.* ** <#m_-219439110489528731__ednref2> Munir Akram ([log in to unmask]) is Permanent Representative of Pakistan to the United Nations. The author wishes to thank Michael Likosky, Justin Lin and Lou T. Wells for their helpful peer reviews. [1] <#m_-219439110489528731__ednref3> Mark Carney, “A chance to reboot globalisation”, *Financial Times*, March 19, 2021 <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=a08d83b477&e=763bcf158c> . [2] <#m_-219439110489528731__ednref4> WRI, UNEP-FI and 2nd Investing Initiative, “Climate strategies and metrics: Exploring options for institutional Investors,” Discussion Paper, (2020) <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=873417907e&e=763bcf158c>, p. 13. *The material in this Perspective may be reprinted if accompanied by the following acknowledgment: “Munir Akram, ‘Mobilizing FDI for sustainable infrastructure investment,’ Columbia FDI Perspectives No. 305, May 17, 2021. Reprinted with permission from the Columbia Center on Sustainable Investment (**www.ccsi.columbia.edu* <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=fd9e132afb&e=763bcf158c>*).” A copy should kindly be sent to the Columbia Center on Sustainable Investment at **[log in to unmask]* <[log in to unmask]>*.* For further information, including information regarding submission to the *Perspectives*, please contact: Columbia Center on Sustainable Investment, Riccardo Loschi, [log in to unmask] *Most recent Columbia FDI Perspectives* <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=18b3a7da91&e=763bcf158c> - No. 304, Anne van Aaken and Diane Desierto, “The Hague Rules on Business and Human Rights Arbitration,” Columbia FDI Perspectives, May 3, 2021 - No. 303, Gary Clyde Hufbauer, “Dangers lurking in the OECD tax proposals,” Columbia FDI Perspectives*,* April 19, 2021 - No. 302, Pierce O’Reilly, “International tax reform and FDI,” Columbia FDI Perspectives, April 19, 2021 *All previous FDI Perspectives are available at * *http://ccsi.columbia.edu/publications/columbia-fdi-perspectives/* <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=6942fcc02a&e=763bcf158c> *. * *Other relevant CCSI news and announcements* - *On May 26*, 11am-12pm ET, CCSI will host Investment Treaties and a New Legal Imagination <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=80e65af97b&e=763bcf158c>. In the recently published book, *Investment Treaties and the Legal Imagination*, Nicolás M. Perrone excavates the origins and evolution of the legal thinking underpinning the investment treaty regime and ISDS practice. Three distinguished speakers will discuss with the author the implications of these findings for the future of international investment law. *Please see our website <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=fb68dc2159&e=763bcf158c> for more details and to register for this online event.* - *CCSI is seeking a consultant* to support research, organization and delivery of capacity building programs, and advisory work related to CCSI’s work on investment law and policy. The project has a regional focus on investment laws and policies applicable in African countries, Regional Economic Communities (RECs), and at the continental level. Applicants should be familiar with the African Continental Free Trade Area (AfCFTA) and ongoing negotiations of protocols to the AfCFTA, including on investment. Further information about the project, consultancy requirements, and information on how to apply can be found here <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=8cbb8bc473&e=763bcf158c>. *The deadline to express interest is May 28, 2021*. Karl P. Sauvant, Ph.D. Resident Senior Fellow Columbia Center on Sustainable Investment Columbia Law School - Earth Institute Ph: (212) 854-0689 Fax: (212) 854-7946 *Copyright © 2021 Columbia Center on Sustainable Investment (CCSI), All rights reserved.* [log in to unmask] *Our mailing address is:* Columbia Center on Sustainable Investment (CCSI) Columbia Law School - Earth Institute, Columbia University 435 West 116th Street New York, NY 10027 Add us to your address book <https://columbia.us6.list-manage.com/vcard?u=ab15cc1d53&id=a61bf1d34a> unsubscribe from this list <https://columbia.us6.list-manage.com/unsubscribe?u=ab15cc1d53&id=a61bf1d34a&e=763bcf158c&c=05f62493d2> update subscription preferences <https://columbia.us6.list-manage.com/profile?u=ab15cc1d53&id=a61bf1d34a&e=763bcf158c&c=05f62493d2> [image: Email Marketing Powered by Mailchimp] <http://www.mailchimp.com/email-referral/?utm_source=freemium_newsletter&utm_medium=email&utm_campaign=referral_marketing&aid=ab15cc1d53&afl=1> -- *Karl P. Sauvant, PhD* *Resident Senior Fellow* *Columbia Center on Sustainable Investment* Columbia Law School - The Earth Institute, Columbia University 435 West 116th St., Rm. JGH 825, New York, NY 10027 | p: (212) 854 0689 | cell: (646) 724 5600 e: [log in to unmask] | w: www.ccsi.columbia.edu | t: @CCSI_Columbia <https://twitter.com/CCSI_Columbia> "A Multilateral Investment Facilitation Agreement can Help Advancing Development", *Investment Facilitation for Development: A Toolkit for Policymakers*, "More Attention to Policies! Improving the Distribution of FDI Benefits. The Need for Policy-oriented Research, Advice and Advocacy", "More and Better Investment Now!", "Facilitating Sustainable FDI in a WTO Investment Facilitation Framework: Four Concrete Proposals", "Multinational Enterprises and the Global Investment Regime: Toward Balancing Rights and Responsibilities”, “The *WIR* at 30: Contributions to National and International Policymaking", "An Inventory of Concrete Measures to Facilitate the Flow of Sustainable FDI: What? Why? How?", "Insulating a WTO Investment Facilitation Framework from ISDS", "The Case for an Advisory Centre on International Investment Law", "The Potential Value-added of a Multilateral Framework on Investment Facilitation for Development" are available at https://ssrn.com/author=2461782 . ____ AIB-L is brought to you by the Academy of International Business. For information: http://aib.msu.edu/community/aib-l.asp To post message: [log in to unmask] For assistance: [log in to unmask] AIB-L is a moderated list.