22 October 2020

Why and how we invest in infrastructure

We invest across many sectors but prioritise those that help further development. Our seven priority sectors have the strongest potential to create the most jobs for the capital invested and contribute towards many of the UN’s Sustainable Development Goals. These sectors are infrastructure, financial institutions, food and agriculture, health, manufacturing, construction and real estate, and education.

In the second of our sector strategies, we set out why the infrastructure sector matters to us and what our investment priorities are.

Infrastructure is the foundation of economic development. Without reliable electricity, clean water supplies, efficient transport infrastructure and widespread access to communications networks, productivity is stifled and incomes remain low.

In South Asia and Africa, underdeveloped infrastructure keeps hundreds of millions in poverty. Their populations are also disproportionately vulnerable to acute and chronic climate shocks brought about by climate change. Dramatically increasing the quality, reach and resilience of infrastructure in these regions, in a manner that is consistent with the Paris Agreement and a just transition to net zero carbon emissions, is a prerequisite for achieving the United Nation’s Sustainable Development Goals.

Meeting this challenge requires massive investment. The Global Infrastructure Hub (a G20 initiative) estimates that the “infrastructure funding gap” amounts to at least $100 billion a year in Africa and $60 billion a year in South Asia.

Development finance institutions such as CDC, the private sector and other non-governmental entities can play an important role in addressing this gap. CDC has a longstanding commitment to infrastructure in these regions. Our investments help to extend access to electricity, water, transport and communications technology. And, through our activities, we increase the willingness of private sector investors to participate in challenging markets.

Our infrastructure sector strategy sets out how we achieve these objectives, and translates them into four ‘investment themes’ – creating economic growth and jobs, tackling climate change, mobilising capital and catalysing private investments, and improving access to infrastructure and quality of life.

To find out more about our approach, read our sector strategy.

CDC is becoming British International Investment