August 1, 2012
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:
- Role of Private Sector Shifting in Transit Partnerships. Urban Land. June 2, 2011.
- Lessons from California for a New National Bank for Infrastructure. Urban Land. November 11, 2010.
- Congresswoman Rosa DeLauro Discusses an American Infrastructure Bank. Infrastructure 2010: Investment Imperative. May 2010.
- A National Infrastructure Bank for the U.S.? Urban Land. July 2009. This article explores how the European Investment Bank operates.