This presentation was made by Raffaele DELLA CROCHE, OECD Secretariat, at the 3rd OECD Forum on Governance of Infrastructure held in Paris on 26 March 2018

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BREAKING SILOS: ACTIONS TO
DEVELOP INFRASTRUCTURE AS
AN ASSET CLASS AND ADDRESS
THE INFORMATION GAP – AN
AGENDA FOR G20
Raffaele Della Croce
Senior Economist - Long Term Investment
Directorate for Financial and Enterprise Affairs- OECD
Raffaele.dellacroce@oecd.org
Session 4 : How evidence-based decision making can
help deliver infrastructure in the public interest
3rd OECD Forum on Governance of Infrastructure –
Monday 26th of March, Paris, OECD

2. 1. Developing quality and sustainable
infrastructure for the long term
2. Evidence available: Data for LTI
3. Actions for G20: Breaking Silos and
Developing Infrastructure as an Asset
Class
4. Reference Work
2
Summary

3. DEVELOPING QUALITY AND
SUSTAINABLE
INFRASTRUCTURE FOR
THE LONG TERM

4. Sustainable Infrastructure
Investment
Infrastructure investment contributes to higher productivity and
growth, facilitates trade, connectivity, and improves economic
inclusion, but…
- Quality of infrastructure in advanced economies is declining and
public finance capacities are shrinking.
- Urgent need for investment in developing countries to improve
access to energy and basic public services.
 USD 6.9 trillion of annual infrastructure investment is needed
between 2016 – 2030:
• Sustainable Development Goals
• Paris Agreement
• Low-carbon transition
See OECD Roundtable on “Financing Sustainable Infrastructure” 19 October 2017,
Paris, Committee on Financial Markets. See www.oecd.org/finance/lti

5. Key messages
– Governance failures currently inhibit the delivery of high-
quality infrastructure. The availability of finance is not the
main obstacle in infrastructure policy
– Citizens are concerned that infrastructure is too often over-
budget, late and, in some cases, done for the wrong reasons.
Their perspective also needs to be visibly taken into account
– Investors (particularly long-term investors) expect government
to be a competent and reliable partner and to promote a stable
business climate for investment as well as a bankable pipeline
of projects
– We need to improve the efficiency of the use of resources and
partner better with the private sector to meet infrastructure
investment needs. This is a major challenge for
governments

6. Requirements for sustainable
infrastructure investments
• Understanding the changing landscape for Infrastructure
… demographics and new technologies
• Supportive macroeconomic conditions and structural reforms
… for a stable regulatory environment
• Integrated investment strategies
… especially at subnational and city levels
• Sound governance principles
… to increase efficiency / avoid delays, cost overruns and corruption
• Diversification of infrastructure financing and adequate data
… optimise risk allocation among stakeholders
… encourage private sector participation, incentivising institutional
investors participation

7. What governments could do better
Governance
– Better strategic planning and alignment of
investments across sectors
– Increased transparency and management of
integrity risks
– More emphasis on social value and on
engaging stakeholders more effectively
– Promotion of credible project pipelines, with
appropriate delivery mode choice and
allocation of financial risk
OECD Framework for Governance of Infrastructure,
endorsed by G20 in Antalya: key factors
Objective: making the right projects happen, in a way that is
cost effective, affordable and trusted by users and citizens

8. What governments could do better
Financing
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There is a need to diversify source of finance for infrastructure across
the value chain (venture capital, banks, corporates etc..)
Institutional Investors with more than USD 80 trillion of AUM could be
a source of finance for infrastructure however on average only 1% is
invested in the sector
Demand to invest in developing countries is growing, USD 1 trillion
could be mobilized over a prolonged period of time
Insurance, guarantees, credit enhancement are particularly
important for access to debt financing and to mitigate political and
regulatory risks
Commercial risks related to construction, exchange rate, and
counterparty risks constrain equity and debt financing
Transition/Climate change risk may cause challenges to the financial
systems
Policy Role: Use of
Risk mitigation
tools/Blended
Finance
G20/OECD Guidance Note and Support Note on the Financing of
Infrastructure and SMEs ( Endorsed by G20 Leaders - Sept 2016) - Key
Findings:
The opportunity:
Diversifying
source of finance
and mobilizing
institutional
investors
Objective: attracting private sector, diversifying sources of finance,
lowering the cost of financing

9. OECD’s Mandate and Proposal for a G20
policy dialogue on quality infrastructure
Creating the governance and financing conditions to crowd in private
investment in quality infrastructure
• Importance of quality infrastructure confirmed by adoption of the G7 Ise-Shima
Principles for Promoting Quality Investment Infrastructure at the Ministerial Council
Meeting (MCM) in June 2017 in Paris.
– OECD was mandated to ‘elaborate guidelines and good practices in this area
• New policy tool: “Infrastructure investment: governance and financing challenges
and policy options” (OECD policy note for 2018)
• Towards a benchmarking tool for good infrastructure governance and financing
(OECD-led initiative; to be launched in 2018)
 Both pillars to be developed in close cooperation and drawing on the expertise of
the G20 IWG through the G20/OECD LTI Taskforce during the 2018/2019 G20
presidencies
 Links to work to be developed on Benchmarks for the Infrastructure Initiative

10. Promoting quality infrastructure
Investment and Financing
This work would build on:
• Promoting the Investment Framework using OECD
Standards/Framework (i.e OECD Policy Investment Framework,
Fighting Bid Rigging in Public Procurements; responsible business conduct,
Officially supported Export Credits etc..)
• 2018 OECD Forum on Governance of Infrastructure : 26 March
2018, Paris, France In the Public Interest: Making Infrastructure Delivery
Transparent, Inclusive and Fair
• Boosting Infrastructure Investment by Addressing Governance
Gaps A series of Regional Roundtables on infrastructure governance
(Africa, Asia, LAC) by OECD, the World Bank, AfDB, EIB, GIH,Konrad
Adenauer Stiftung, NEPAD-IPPF… Launched in Cape Town, November 2-3,
2017. More roundtables to follow in 2018
• G20-OECD Report on G20 Investment Strategies Volume I | Volume
II | Highlights: prepared by the OECD under the initiative of the G20
Turkish Presidency

11. DATA FOR LONG TERM
INVESTMENT:
AVAILABILITY AND
RELEVANCE

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Innovation in data analysis, data gaps
and OECD Role
• Issues re data gaps in LTI are
not new…
• ... but new tools and datasets
are available
• Use of micro sources of data
(firm/project level) for academic
work
• Several OECD Directorates
already involved (STD, DAF,
ENV,DCD) with ITF and IEA
• Private/public sector interest
• Role of G20/G7/APEC

13. • Improving the availability and quality of data and information on long-term investment and the
creation of infrastructure as an asset class is recognised as a major G20/G7 priority for the next
Argentinian and Canadian presidencies in 2018
• The OECD has been leading with other IOs, this work at the G20
– FSB/IMF/OECD/WBG (2014) Development of quantitative indicators of long-term investment finance.
– OECD (2015 ) Addressing Data Gaps in LTI: An Agenda for Research 2015, with BIS, Canada, Italy
– OECD (2017) “Breaking silos: Addressing the Information Gap and Developing Infrastructure as An Asset
Class” , 2017 Forthcoming
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Information Gap and Infrastructure as an
Asset Class: New Data Collection Initiative
• OECD reports on the results of their surveys on (i) transport-related
infrastructure, (ii) from-whom-to-whom financial accounts (possibly with
IMF), and (iii) large pension funds.
• Country-level statistical policy notes
• Development of a proposal for a preferred set of information on
investment and finance at the macro- and meso- level
• Development of a proposal for a preferred set of information for the
analysis of infrastructure investment at micro level
Macro
Meso
Micro
Data sources Proposed work to G20 on data gaps (OECD 2015)
A workshop on data collection was held in the 10th of May in Paris
A joint “Infrastructure Data collection Initiative” has been announced at the Workshop involving
the Global Infrastructure Hub, the European Investment Bank, a group of private investors (the Club
of LTI and LTIIA) and the OECD. The launch of the initiative is expected at the next G20/OECD
Task Force on Institutional Investors and Long-Term Financing in November

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Use of Micro Data for Infrastructure Analysis
There is a lack of comparable cross-country information on infrastructure investment as often
comprehensive data by the government, SOEs and the private sector are not readily available.
The creation and maintenance of databases gathering project and firm-level information across
a wide range of countries will allow more comprehensive analysis of infrastructure investment,
complementing national account data
Available data and their respective sources
Source: Adapted from ADB 2017 and OECD 2015
Measurement Sources Description Items covered
1. Budget Spending on
Infrastructure Country Budget Offices
Capex in Transp, Comm,
Energy, water made by
GOVERNMENT
Infra Investment by SOE
using budget transfers Capex by GENERAL GOVERNMENT in chosen infra sectors
2. Gross Fixed Capital Formation
for General Government- GFCF
(GG) National Accounts
Public Investment by general
government -
national/subnational gov Government investments in fixed assets (infra and non infra)
3. Private participation in
infrastructure (project/firm) Commercial databases
Investment in Transp, ICT,
energy, water projects
owned or managed by private
companies
Updated and disaggregated figures by sector and region. Data on project and
firm level. Some private investment with info from publicly available sources
4. Financial performance - Cash
flows
Public Authorities,
Investors, banks,
investment funds
Investment and financing
across sectors
cashflow at project level, investment and balance sheet data collected from
infrastructure investors and creditors.

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Use of Micro Data for Infrastructure Analysis and
need for global coordination
Many challenges are facing the commercial database relative to infrastructure financing
• The lack of a commonly applied definition for infrastructure
• The different routes to invest in infrastructure (i.e. infrastructure funds, listed
companies, corporates etc.)
• The issues relative to confidentiality and privacy of necessary data.
• The commercially available project-level database, are not subject to any official
validation and may be subject to coverage shortcomings and inconsistencies.
Many micro data collection efforts are ongoing
• World Bank Private Participation in
Infrastructure Projects Database
• Global Emerging Markets Risk Database
(GEMs)
• EDHEC infra database
• Moody’s risk performance studies
• MSCI-IPD
• Infralatam
• SuRe (The Standard for Sustainable and
Resilient Infrastructure)
• GRESB Infrastructure Assessment
• Envision
• CEEQUAL
… As well as initiatives on infrastructure ESG performance

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Workshop on Infrastructure as an Asset Class and
Data Collection for Long-term Investment
2th November 2017, OECD, Paris
Objective
Agenda
To support the G20/OECD Task Force on Institutional Investors and Long-term
Financing (the “G20/OECD Task Force”) and to identify concrete policy actions for
Argentina’s G20 Presidency.
Session I: Long-term Financing Priorities in 2018 for G20, G7, APEC and FSB
Session II: Developing Infrastructure as an Asset Class: Policy Options
Session III: Developing Financial Performance Benchmarks for Infrastructure
Session IV: ESG Performance Benchmarks for Infrastructure
The Workshop was attended by over 70 participants and brought together members of
the Task Force (i.e. representatives of the G20, OECD, Asian Pacific Economic
Cooperation (APEC), and International Organisations (IOs) such as the Financial
Stability Board (FSB), the World Bank Group (WBG), the Global Infrastructure Hub (GIH)
and the European Investment Bank (EIB)) with selected private sector stakeholders
from the OECD Network of Long-term Investment, academics and other industry
experts.

17. BREAKING SILOS
DEVELOPING
INFRASTRUCTURE AS AN
ASSET CLASS AND
ADDRESSING THE
INFORMATION GAP

18. – Proposed work is focusing on data gaps/analytical work on
private sector financing of infrastructure (but data gathered
could be used for economic impact, sustainability, additionality etc)
– Aim is to improve the efficiency of the use of resources and
partner with the private sector to meet infrastructure
investment needs, given constraints on government budget and
considerable current and future needs
– Breaking Silos approach in the G20 (i.e. Green, Development, Infra
as an asset class, Crowding in private sector etc..)
– Benefits for public and private sector:
• Opening new channels of funds for Investors and asset managers;
• More effective and efficient regulation allowing intermediation of long term capital;
• Improving bankability of projects through better risk sharing in public
infrastructure procurement and avoiding crowding out of private sector
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Breaking silos report: an Agenda for
G20 Argentinian presidency in 2018
See OECD Forthcoming (2017) “Breaking silos Actions to Develop
Infrastructure as an Asset Class and bridging the information gap: An
agenda for G20”

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Addressing Data Gaps for LTI: The
Research Agenda
Private Investment in
Infrastructure
The Roles of Different
Investors
Diversified sources of
Finance
Risk Mapping and
Optimal Allocation
1. Mapping the
Financing of
Infrastructure
Mobilization of Private
Sector Financing
Additionality and
Value for Money
Innovative Risk Sharing
Instruments and Financial Products
Evaluating Government
Instruments
3. Mobilizing
Private Sector
Financing in
Developing
Countries
Sustainability
Performance
Benchmarking
Information
Asymmetry/standardisa
tion of documentation
Investment Mandate
Ambiguity: Financial
Products needed
2. Infrastructure
as an Asset Class
and role of
Institutional
Investors
Three main streams of work have been identified, with related actions proposed
for the G20 and reference work (OECD and other IOs) :

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1. Mapping the financing and risk
allocation in infrastructure
• What are the trends in financing
infrastructure across regions and
sectors (i.e. energy, transport, ICT and
water)
• How much private investment goes
into infrastructure? What is the
level of foreign participation?
• Mobilising resources and mitigating
risks – traditional investors and new
sources of commercial financing for
development
• Optimal allocation of risk and
alignment of financial market
policies
Areas of Work Actions
• Mapping investment and
financing channels for
infrastructure
• Listing instruments and levels of
public financial support
• Creation of a database of stock and
flow of infrastructure projects
• Development of measures of
information on investment and
finance at the macro- and meso-
level and micro level
Reference Work
 G20/OECD Guidance Note on Diversification of Financial Instruments for Infrastructure and SMEs, endorsed by G20 Leaders,
September 2016
 “Mobilising financing for the transition” Chapter 7 of the OECD report “Investing in Climate, Investing in Growth”
 OECD led research Collaborative on Tracking Private Climate Finance
 IEA World Energy Investment
 OECD ITF Quantifying private and foreign investment in transport infrastructure

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2. Investment Characteristics of
Infrastructure as an Asset Class: Attracting
Institutional Investors
• How are Institutional Investors
approaching infrastructure
investment? How much is invested
by pension funds, insurers and
SWFs?
• How to align investors to long term
assets? What are the products
needed?
• What are the risk and returns of
infrastructure assets?
Benchmarking and success metrics
for infrastructure investment
• How to incorporate sustainability
criteria in infrastructure
investment?
Areas of Work Actions
• Defining sustainable and quality
infrastructure investment to facilitate
data collection on sustainability and resilience
factors in infrastructure investment
• Standardizing and harmonizing project
documentation and of approaches to
infrastructure valuation and analysis
(i.e. China Guidelines for PPPs)
• Promoting international infrastructure
data collection, with the adoption of a
template for a preferred set of information to
be collected (historical cash flows and
performance at project level, project
characteristics, sustainability issues)
• Support initiatives to create infrastructure
benchmarks (i.e. EDHEC)
Reference Work
- OECD Annual Survey of Large Pension Funds and Public Pension Reserve Funds (last published 2016)
- GIH Project Pipeline/ risk Matrix
- Infrastructure Information Support system
- 2 Degrees Initiative – Energy Transition Consortium

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3. Mobilizing private sector investment in
Developing Countries
• Tracking mobilization of private
sector financing
• How to crowd-in private sector
financing ensuring additionality
and value for money?
• Developing, expanding and
standardizing new risk-sharing
instruments and financial
products
Areas of Work Actions
• Defining measurements and criteria
to assess the impact of initiatives
that leverage private sector capital in
infrastructure
• Developing a harmonized
approach to leveraging private
sector resources and additionality
• Measuring governments’
instruments and techniques to
attract private sector financing in
infrastructure
• Promoting the setting of objectives
for using NDBs (and MDBs through
countries participation in their
governance) balance sheets to
catalyze private investment
Reference Work
• OECD with GIH and ADB 2017 (forthcoming) Risk Mitigation and allocation in Infrastructure,
Including PPPs in APEC Economies: Selected Good practices
• MDBs Task Force on Measuring Private Investment catalysation and MDBs optimisation of Balance Sheet
• DAC Blended Finance Principles
• G20 – IFA Principles of MDBs’ strategy for crowding-in Private Sector Finance for growth and sustainable development

23. Infrastructure Data Initiative – Data as a
public good
Major attributes of the proposal:
standardised, centralised and consolidated
data on infrastructure assets.
Global coverage in both developed and
emerging markets.
Collaborative , involving governments,
MDBs, IOS, and the private sector
A joint initiative by:

24. The Infrastructure Data Initiative – Expected
outputs
Infrastructure
Data Initiative
Data
Repository
Financial
Performance
Benchmarks
Economic
and
Financial
Viability
ESG
Performance
A dynamic approach
to infrastructure
investment analysis…
New benchmarks on
investment profitability
metrics (Return on assets,
return on equity, and
dividend yield, default rates
and recoveries, etc.)
Impact evaluation
at project/asset
level (utilisation
performance,
construction costs,
and delivery
performance)
Sustainability
and inclusive
growth impacts
and climate
related risks (i.e.
transition risk)

25. ANNEX –REFERENCE
WORK

26. Develop consultation and
dialogue with private sector
(LTI Network includes approx
3,000 financial industry
participants i.e. asset
owners, asset managers)
The OECD is supporting the G20/APEC agenda on long-term investment through the
G20/OECD Taskforce on Institutional Investors and Long Term Investment
Financing (G20/OECD Taskforce)
See www.oecd.org/finance/lti
26
The OECD Project on Institutional
Investors and Long-term Investment
OECD Long-
term
Investment
Project
Network on
Institutional
Investors and
Long-term
Investment
Collecting data and
information
Developing analysis
Towards a holistic approach to long-term investment analysis addressing
private sector participants across the value chain (corporations, banks,
institutional investors), including a broader range of issues (investment and
financing), using better data and analytical tools
G20/OECD Guidance Note on Diversification of Financial Instruments for
Infrastructure and SMEs, endorsed by G20 Leaders, September 2016

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Current and Expected Work on
Mobilisation of Finance for LTI
OECD
Long-term
Investment
Diversifying
finance for
sustainable
infrastructur
Mobilising
institutional
investors for
infrastructure
investment
The information
gap and
infrastructure
as an asset
class
Financing
connectivity
infrastructure
Low carbon
infrastructure
and clean tech
innovation
Global
dialogue
• Mapping of financing flows for energy, water,
transport building on G20/OECD Guidance note
• Delivery/financing models (with Singapore MoF)
• Financing innovation
• Country/Project studies (i.e. Brazil)
• Risk mitigation instruments for APEC
with GIH (Survey of Mexico, Chile,
and Peru)
• OECD/IOPS Global Forum on
Private Pensions (Africa)
• Infrastructure data initiative with GIH,
EIB and Club of LTI
• Large pension fund and large
insurers survey
OECD/World Bank Connectivity
Infrastructure Alliance Conference,
Jan 2018, Paris
Egypt’s Suez Canal Economic Zone
• OECD/ ADBI Seminar on
Financing High Quality
Investment in
Infrastructure, December
2016, Hanoi, Vietnam
• OECD/Long Term
Investor Club
Conference on LTI, 18th
of Oct, Paris
• G20/OECD Taskforce on
LTI – Nov 2017, Paris
• OECD workshop on
Financing Green
Infrastructure, November
2016, Paris
• “Mobilising financing for
the transition” Chapter 7
of the report “Investing in
Climate, Investing in
Growth” launched 23rd
May 2017 , Berlin
Beyond this work, the OECD is active on the governance of infrastructure, blended finance etc..

28. Low carbon Infrastructure: Mobilizing Finance for
the Transition in support of the 2017 German
presidency of the G20
“Boosting economic
growth does not mean
locking the world into a
high-emissions future,
provided pro-growth
reforms are combined
with coherent climate
policy and alignment of
policies across the
economy”
• May 2017: Launch the G20 report on “Investing in Climate,
Investing in Growth” - See chapter 7 on “Mobilizing
financing for the transition”
• Workshop on “Financing Green Infrastructure” on November
3rd 3016 (See summary of the discussions for further details)
• Other relevant work includes the OECD report on
Investment-Governance-Integration-ESG-Factors. For more
information see also OECD Centre on Green Finance and
Investment
28

29. • Large Pension Funds (LPFs) and Public
Pension Reserve Funds (PPRFs), survey
complementing national statistical reporting
(Pension Market in Focus)
– Specifically to track trends in investment
amongst the worlds largest institutional
investors
• Part of the G20/OECD Task Force on Long-
term Investment Financing by Institutional
Investors (LTI Website)
• Valuable inputs into OECD research for
committees and for G20 and APEC related
work streams
• 2016 marks the sixth consecutive year of data
history
– 76 LPFs returned a questionnaire covering USD
2.4 trillion in assets under management
– 21 PPRFs returned a questionnaire covering
USD 5.9 trillion in assets under management
• Through the OECD Annual Survey of Large
Pension Funds and Public Pension Reserve
Funds (last published 2016), we are
contributing to FSB discussions on illiquidity
issues for long term investment
Information Gap: Large Pension Funds -
Annual Survey
29
Unlisted Infrastructure Investment
represents less than 1% of Large
Pension Funds’ asset allocation
Next Publication: October 2017

30. • The OECD, along with the WBG, provided to the G20 Infrastructure
Working Group a stocktake of tools, standards, guidelines, principles, etc.
related to infrastructure (and especially asset class), developed in a G20
context or beyond
– A key outcome of this exercise will be to identify missing issues in order to refocus
future work through the IWG
– It is expected that these inputs will be part of a planned G20 roadmap on
infrastructure investment to be developed under the Argentinian presidency
• The OECD organised a workshop on innovation, standardisation,
and benchmarking in infrastructure investment in London on 22
February, taking place just before the meeting of the IWG
– Exploring blockchain as an emerging technology for infrastructure finance and
procurement
– Standardisation of project documentation, modelling, and developing prioritisation
frameworks to support Quality investment
– Blended finance for infrastructure
Current OECD work and upcoming events
in the G20 context

31. Other OECD initiatives and recent activities