Saving Lives Through Private Investment in Road Safety : Knowledge Report - 2022
The World Bank estimates a significant funding gap in road safety of 260 billion to achieve SDG 3.6 and 11.2 in the next ten years, and recognizes that this gap cannot be closed through public funding alone and thus mobilization of private capital...
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| Language: | English English |
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Washington, DC: World Bank
2022
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| Online Access: | http://documents.worldbank.org/curated/en/099525002222214332/P1750030e6c58506b08d5b05ccba3311628 http://hdl.handle.net/10986/37039 |
| Summary: | The World Bank estimates a
significant funding gap in road safety of 260 billion to
achieve SDG 3.6 and 11.2 in the next ten years, and
recognizes that this gap cannot be closed through public
funding alone and thus mobilization of private capital is
required. The impacts of road traffic crashes reach far into
the economy and can cost L/MICs as much as 6% of their GDP.
The costs of a road traffic crash do not end at the
roadside; they create ripple effects throughout the wider
economy. Loss of income, property damage, insurance
premiums, loss of taxes, and burdens on the health sector
are just some of the far-reaching costs associated with road
traffic crashes. Road traffic crashes can cost countries as
much as 6 percent of their GDP and trap families in poverty
as they lose income generating potential and focus on
providing lifetime care. This report examines the potential
for private capital mobilization to close this gap. The
report investigates the market failure to appropriately
account for the cost of road crashes, which prevents private
capital from flowing to road safety investments. The growth
of socially responsible investing and the sustainable
finance market offers a new opportunity to address this
market failure. The report proposes different business
models and financing instruments to channel private
investment into road safety projects. These investment
structures consist of subnational, public-private
partnerships (PPPs) and corporate investments that can
leverage the growing sustainable finance market, including
social and sustainability-linked financings (SLFs). The
report also develops indicators that can be used to tie the
cost of financing to the attainment of road safety targets,
incentivizing borrowers to commit to road safety as part of
SLFs. The report examines the enabling environment for
structuring investable road safety projects in a sample of
countries, looking at the barriers and opportunities, and
proposing risks and mitigation strategies, like blended
finance mechanisms and stable revenue sources, for long-term
sustainability of road safety investments. |
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