Infrastructure Bank

Image courtesy of WSDOT via Flickr

Image courtesy of WSDOT via Flickr

As part of its ongoing infrastructure funding and financing work, the ULI Infrastructure Initiative has explored the potential of infrastructure bank models.

A new U.S. national infrastructure bank could draw more private equity and debt capital into infrastructure development, bringing stability and long-term capital to projects. A bank’s vetting process could help promote more merit-based, competitive decision-making and provide a mechanism for funding major, cross-sector and multijurisdictional projects.

An important model for a potential national infrastructure bank is the European Investment Bank (EIB), established in 1958. The bank finances about $64 billion in projects annually across the continent, helping modernize seaports, expand airports, build rail lines, and reconfigure city centers. The bank encourages cross-border cooperation and catalyzes capital from sources including local and national governments, public authorities, private banks and other financial institutions. Investments by the EIB are typically capped at 50% of total investment cost, and projects must be viable in four fundamental areas: economic, technical, environmental and financial.

Other infrastructure bank-like approaches are emerging in states and metropolitan areas across the country. Read more about ULI’s take on infrastructure banks: