The Infrastructure Gap in Latin America and the Caribbean: Investment Needed Through 2030 to Meet the Sustainable Development Goals

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Dec 2021
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The purpose of this study is to estimate the investments that Latin America and the Caribbean would need to make by 2030 in order to make progress in meeting the SDGs. The SDGs are not binding commitments for countries, but they are an internationally recognized reference on the goals they are expected to achieve in the coming years.

It is important to emphasize that the estimated investments do not imply full compliance with the SDGs related to the provision of infrastructure services. In addition to the limitations that exist for the calculation of investments, which are duly explained in the document, the SDGs set out comprehensive goals that incorporate affordability, resilience and sustainability criteria that require the adoption of public policies that go beyond the investments needed to provide more and better infrastructure.

In this sense, the estimates presented in the study should be interpreted as a lower bound. This estimate can be used to calculate the additional investments needed to make infrastructure services more sustainable, which could include, among others, a much greater and faster increase in the penetration of renewable energies in the regional energy matrix, transmission lines that strengthen the regional integration of electricity systems, flood control works, water and sewerage networks that are resilient to natural disasters, as well as investments in green infrastructure to ensure water quality and quantity in the context of climate change.

According to the calculations of this study, by 2030 Latin America and the Caribbean needs to invest US$2,220,736 million in the water and sanitation, energy, transportation and telecommunications sectors to expand and maintain the infrastructure necessary to meet the SDGs. Of this total, 59% will need to be allocated to investments for new infrastructure and 41% to investments for maintenance and replacement of assets reaching the end of their useful life. In terms of investment effort relative to the size of the economy, Latin America and the Caribbean will need to invest at least 3.12% of its GDP in infrastructure each year until 2030.

In the sectoral analysis, closing the access gap and maintaining the quality of water and sanitation services, including wastewater treatment, requires an average annual investment effort of 0.50% of regional GDP. In the electricity sector, Latin America and the Caribbean should invest 0.81% of its GDP annually to provide universal access to electricity to the entire population and to advance in the decarbonization of the electricity generation matrix in accordance with the countries' expansion programs. In the transportation sector, closing gaps in road infrastructure, airports and public transportation requires an annual investment of 1.37% of the region's GDP. Finally, in the telecommunications sector, increasing household connectivity through broadband and mobile internet technologies with 4G standard requires an average annual investment of 0.41% of GDP until 2030.