GLOBAL: Mobilizing Private Investment For Road Safety

The objective of this activity is to define viable business models/ structures for WBG to help mobilize own-account and third-party private investment into “Road Safety Projects”.

Road Safety Projects directly contribute to the attainment of the Sustainable Development Goals (SDGs) and are also consistent with the definition of Social Impact Investment. Specifically, they contribute to the attainment of SDG target 3.6: Halve the number of global deaths and injuries from road traffic accidents. It also indirectly contributes to SDG target 11.2: Provide safe, sustainable transport systems for all, improving road safety and with special attention to key groups such as children and the vulnerable. Road Safety Projects are also consistent with the Social Project definition in the Social Bonds Principles supported by IFC. Under this definition, Social Projects directly aim to address or mitigate a social issue and/or seek to achieve a positive social outcome.

SDGs are becoming increasingly important to private investors as evidenced by the growing commitments that they have made (Global Investors Alliance for Sustainable Development) and recent market activity. The UN and World Bank are currently working on ways to channel a greater amount of private investment into SDG-aligned activities and there is increasing receptivity in the investor community to increase the currently minuscule fraction of assets invested in these activities. Investors have begun embedding Environmental, Social and Governance (ESG) standards into their investment decisions. There has been recent market activity by institutional investors investing in SDG-bonds issued by power utilities, such as ENEL.

The social impact of road safety interventions can already be measured by existing tools supported by the World Bank and other MDBs and provide grounds for social investing in this area. Improvements in road safety lead to lower expenditures in health and social support systems and benefit the insurance sector. There are already existing methodologies to assess the safety performance of road infrastructure (“Star System”) and to evaluate the impact of road safety interventions on road accidents and fatalities (iRAP). However, directly linking outcomes to investor returns may still be complex given the mix of factors that determine the incidence and impact of road accidents (driver behavior, types of vehicles, one-off events, etc.).