Infrastructure Solutions: How to adapt transport to a sustainable future

The energy transition towards a cleaner transport

The transport sector faces major issues in its goal to become sustainable. On the one hand, it continues to rely almost entirely on fossil fuels, with almost 95% of the fuel being from fossil sources in 2019. On the other hand, around the world, countries are stuck with ageing transport networks that not only need repairs but also can no longer adequately serve road users. The changing climate and the resulting extremer weather conditions also present direct threats to the outdated infrastructures.

That is why we need to redesign, modernise, and change transport to meet future social, economic, and environmental demands- always, in line with climate ambitions. Luckily, mobility can be more sustainable. Greener alternatives to vehicles and fuels, such as electric vehicles, are slowly gaining more and more ground. But, energy transition and modernisation of the transport sector require significant and long-term investments and careful planning.

In 2016, the European Investment Bank and the European Commission launched the Cleaner Transport Facility, which aims to promote cleaner transport vehicles and create crucial infrastructure like charging and refuelling facilities. Under the facility, the Bank financed, for instance, 15 000 electric and hybrid vehicles in several European countries, cleaner buses in France and the Netherlands, and funded the construction of thousands of charging stations for electric vehicles in Italy, Spain and Slovakia

The European Investment Bank also finances individual projects pushing for greener, safer, and more accessible transport around the world. The Bank has supported the integration and decarbonisation of transport in Africa, Asia, and Latin America.

Closing the gap between the public and private sector 

Infrastructure usually requires large investments in assets designed to operate over the long term.

Traditionally, the public sector has played a key role in financing transport projects. But, as the projects are becoming more complex and expensive, it will be necessary to optimise the use of scarce public resources and mobilise private investment at a larger pace and scale.

The good news is that private investors have an appetite for sustainable investing. The global cash flows in terms of environment, social, and governance assets tripled over eight years, to $40.5 trillion in 2020. But, private investors continue to still face immense obstacles to entering the market.

Bridging the gap between public and private investors will be crucial for the future of transport infrastructure. To attract additional private financing, the European Investment Bank participates in funds like Quaero European Infrastructure Fund II. This way the Bank can participate in projects, which would otherwise struggle to find the required financing.

Public-private partnerships (PPPs) are an important tool to facilitate cooperation between the public and private sector. A European Investment Bank report found that such arrangements allow efficient delivery and a higher quality of infrastructure, as they offer mutual benefits to both sides. While PPPs help access funding, technology, and expertise and reduce the cost and risks of large projects, they simultaneously enable private companies to work on major and lucrative infrastructure projects. For these reasons, the Bank backed eight transport PPPs between 2020 and 2021.

With so many changes underway in transport, the European Investment Bank is revising its Transport Lending Policy, so it can support this green transition towards a truly sustainable transport system- one that is both accessible and efficient, but also green and safe. Many stakeholders contributed to new Transport Lending policy through public consultation.