How Sao Paolo uses Value Capture to Raise Billions for Infrastructure

GautrainThe infrastructure in many cities lags behind the population’s needs. This is a major challenge for city governments in both emerging, high-growth places and industrialised nations with low growth and less public funding to replace aging public spaces and utilities.

The on-going rebalancing of global economic power has led to unprecedented investment plans in infrastructure in the emerging markets. For example, the Asia Pacific market, driven by China’s growth, is expected to represent nearly 60% of global infrastructure spending by 2025. In contrast, Western Europe’s share is expected to shrink to less than 10% from twice as much just a few years ago, according to PwC and Oxford Economics’ Capital Project and Infrastructure spending outlook to 2025 report. But infrastructure is expensive and especially in emerging markets, the cost of capital can be prohibitive for large scale public investments.

The trick is to work with financial innovation and value capture. Today Marco Kamiya at UN Habitat pointed out an excellent brief article on CitiScope Global News, about how Sao Paolo in Brazil uses value capture to raise funding for infrastructure projects. Click on this link to read the article.

Screenshot 2015-07-29 21.09.25

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