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Engineers have ‘vital’ role in unlocking trillions for green infrastructure

Date
16 November 2022

Understanding and making the investment case for low-carbon infrastructure is now an essential skill for engineers.

Engineers have ‘vital’ role in unlocking trillions for green infrastructure
The report highlights examples of financial models with projects that are working, such as offshore wind farms. Image credit: Shutterstock

The skills and knowledge of civil engineers should be used much more widely to unlock vast flows of private finance into green infrastructure projects, according to a new ICE report.

Financing Low-Carbon Infrastructure argues that many projects fail to progress because of a lack of available finance.

This is despite unprecedented interest from the private sector and banks to invest in this area.

The report comes as delegates at the COP27 climate summit in Egypt debate how to turn the trillions of dollars pledged by pension funds, finance institutions and governments into spades-in-the-ground projects.

The 'hard sell' of infrastructure

Researchers at ICE spoke to a wide range of engineers, client bodies, institutional investors, economists, and legal and financial advisers to write the report.

They found that infrastructure can be a hard sell for investors, partly due to the high initial construction costs and long periods it can take before seeing returns on their investment.

But it also notes anxiety among investors around the risks and the quantifiable carbon reductions of some projects – especially those that use untested technologies.

Despite this, the report highlights innovative examples in the UK and around the world of financial models that are working, and of the value engineers can add.

Alex Doyle, deputy chief impact officer at the UK Infrastructure Bank, said: "Engineers are one of the most important parts of the green finance story.

"Because ultimately everything comes back to the asset, and the asset is always designed with an engineer."

'An essential skill'

One of the key messages of the report is that the skills and knowledge of civil engineers can be used much more widely to help make projects commercially attractive.

Understanding and making the investment case for low-carbon infrastructure is now an essential skill for engineers.

The report aims to provide a grounding in how infrastructure is funded and what investors are looking for.

According to Rohit Das, executive director of the Pollination investment firm, investors typically have three questions:

  • Is this project technically feasible?
  • Is it environmentally beneficial?
  • And how do we make money out of it?

The report also notes that future carbon reporting criteria will be more stringent, and that those involved in developing infrastructure should make carbon reporting integral to the design process.

'Spirit of cooperation'

The ICE will be setting up a Knowledge Network to support civil engineers to learn about green finance, and to promote the ways in which engineers can help to de-risk investment.

Mark Hansford, director of engineering knowledge at the ICE, said: "Greater collaboration between the engineering and finance communities could be an important catalyst.

"I hope this report, and the network we are creating, will help cross the aisle and foster a spirit of cooperation."

Find out more

  • Kai Tabacek, media relations manager at ICE