Subnational governments are major infrastructure investors. In G20 countries, they are responsible for almost 60% of public investment. These state, regional and local governments often have the primary responsibility for providing the basic public infrastructure and services that are essential for economic development, well-being and poverty reduction (water, waste, education, healthcare and transport, etc.).
In a February 2022 meeting hosted by the Indonesian G20 Presidency, Finance Ministers and Central Bank Governors from G20 countries agreed to “develop policies to mobilize inclusive infrastructure investment to enhance social inclusion and address subnational disparities in regions and cities”. As part of this agenda, the G20, the Organization for Economic Co-operation and Development (OECD), with support of the Asian Development Bank (ADB), are developing a Policy Toolkit to mobilize funding and financing mechanisms for inclusive and quality infrastructure investment in regions and cities. The Policy Toolkit aims to support regional and local governments across developing, emerging and developed economies to implement the strategies and mechanisms to mobilize funding and financing for quality infrastructure investment that contributes to a balanced and inclusive post-pandemic economic recovery.
The Policy Toolkit will highlight a wide range of funding and financing instruments to support infrastructure investment in regions and cities and outlines key enablers to support their adoption. It will facilitate knowledge exchange to support subnational governments diversify their revenue sources and help them to unlock the use of private finance for infrastructure. The Policy Toolkit will build on the outcomes of this workshop and the report Unlocking infrastructure investment: Innovative funding and financing in regions and cities, which was published in 2021 as an input to the Italian G20 Presidency.
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