The need for a new era of investment in Latin American infrastructure is clear and present. Most importantly, we now have the opportunity to ensure this next round of investment is in infrastructure that is needed, wanted and sustainable – with multiple shared benefits for people and nature.
But a key challenge remains. This new era for infrastructure has to avoid replicating a history of poor examples of dirty infrastructure and bridges to nowhere and transcend the false dichotomy in which to be good for people development has to be bad for nature.
Funding is not as much of an issue this time around. Private and public-sector investors like pension funds, investment managers and insurance companies are looking to put huge amounts of available resources into addressing the more than $3 trillion that would be required over the next decade to meet the region’s infrastructure needs. They are ready to fund good quality projects, in the context of functional public institutions that have everything in place to assure a high probability of success.
The real issue is ensuring that projects are needed, properly sited and well-designed, particularly in light of the impacts of climate change that will take place during their life span.
What has been happening in most cases is that the project selection and siting process is not grounded in sound science, solid economics and robust community and stakeholder input – all elements of a project’s eventual financial success. That’s not good for investors, residents or anyone else.
Fortunately, the chorus for better planning and a much more inclusive and transparent process is growing louder. There is now wider understanding that addressing and resolving sustainability issues at the earliest planning stages is cost-effective because doing so helps avoid unanticipated costs and delays on the backend. Regional leaders, for practical reasons – including fiscal responsibility, transparency, and respect for indigenous rights – are starting to look more closely at this and set their sights on a “smart infrastructure” that balances development with conservation. It is no mere coincidence that two of the largest hydropower project proposals in the Amazon basin – the Inhambari in Peru and the Sao Luis do Tapajos in Brazil – were recently rejected by government authorities. And Colombia has denied a license to a hydropower project in Canafisto, in the Magdalena River basin.
A way forward has been offered by the Latin American Conservation Council (LACC), which includes global leaders committed to accelerating innovative solutions to reconcile growth with conservation of natural habitat. The LACC has proposed an “early action” strategy to planning and funding infrastructure in the region. This idea has been picked up by The Nature Conservancy (TNC), whose development-by-design approach uses state-of-the-art planning and mapping tools to meet functional needs (like energy production) while avoiding, minimizing or compensating for impacts on high priority conservation areas, ecosystem services and local communities. It’s all part of a “smart from the start” approach that seeks to bring local people and local governments into the process and address their concerns and lack of capacity early on.
TNC has worked with public and private partners on a model for watershed planning in the Magdalena basin in Colombia, creating the Decision Support System for the Magdalena-Cauca Basin, known as SIMA, an innovative, open access, scientific tool to help government officials, industry, and the community at-large visualize the cumulative impact of each project on the basin, understand the trade-offs and thereby develop more informed and more inclusive decision-making.
Similarly, TNC has been working with the Mexican government to adopt the early action approach in hydropower planning, with online tools to support sound planning, transparency and wider public input in decisions related to infrastructure project and site selection. The potential worldwide impact of applying this “hydro-by-design” approach to dam placement could save 100,000 rivers from degradation, as demonstrated in a 2015 “Power of Rivers” study.
For its part, the Inter-American Development Bank (IDB) has launched its NDC Invest platform to support public and private sector clients in designing better, more bankable and sustainable projects. Even philanthropic investors, such as the Moore Foundation, have recently embraced infrastructure development as a core strategy for conservation in the Amazon.
By ensuring that the priorities and concerns of local residents and the environmental community are aired and addressed throughout planning and implementation, projects can avoid the social conflicts, delays and cost-overruns that often plague them. Improving cost predictability, along with climate resilience, means greater security for project investors. And it will help ensure that the next wave of infrastructure funding is used for projects that are needed, welcomed by communities, economically viable and in harmony with nature.
Ana Cristina Barros is Director for Smart Infrastructure in Latin America for The Nature Conservancy. In 2015 and 2016 she served as Secretary, Biodiversity and Forests in the Brazilian Ministry of the Environment.