Sustainable Infrastructure at Schulich: Closing the Infrastructure Finance Gap
When the G7 decided in 2018 to create a sustainable infrastructure program to train infrastructure managers and investors from around the world, they turned to the Schulich School of Business.
As a global leader in the fields of both infrastructure and sustainability, Schulich was a natural choice to help develop a curriculum and training program.
Today, six years later, the Sustainable Infrastructure Fellowship Program (SFIP) at Schulich has established itself as the world’s pre-eminent program in providing senior infrastructure managers and investors with applied skills and knowledge related to the development, financing, and operation of large-scale infrastructure projects.
In this month’s column, Karen Shlesinger, Director of the Sustainable Infrastructure Fellowship Program, explains how this highly experiential program is bringing together major infrastructure companies, government officials and investors to create more sustainable, climate-friendly infrastructure.
I invite you to learn more about this unique program and the ways in which Schulich is helping to provide the expertise and skills required to build the sustainable infrastructure the world needs.
Best,
Detlev Zwick, PhD
Dean, Tanna H. Schulich Chair in Digital Marketing Strategy
Schulich School of Business
Sustainable Infrastructure at Schulich: Closing the Infrastructure Finance Gap
The Sustainable Infrastructure Fellowship Program (SIFP), offered by the Schulich School of Business is a globally recognized certificate program in sustainable infrastructure. Seventy-nine percent of all greenhouse gas emissions are attributable to infrastructure, underscoring that Net Zero is not attainable without sustainable infrastructure. In addition, new technologies such as renewables, clean energy, and electro-mobility require a capital-intensive commitment by both the public and the private sectors. The Fellowship program taught at Schulich addresses challenges and opportunities in sustainable, resilient, and equitable infrastructure; the clean energy transition; and the journey to Net Zero. As a G7 intiative, the SIFP targets long term economic and social viability at a global scale, graduating Fellows who are empowered by the learning experience to impact change.
The SIFP was launched in 2019 by the Investor Leadership Network, with support from the Government of Canada, with the goal of closing the infrastructure finance gap in the Emerging Markets (EM). With Schulich as academic partner, the first three years of the Fellowship program have been a resounding success, graduating 67 alumni representing 22 countries, and 40% of the alumni are women. As we embark on 2024, the Fellowship is expanding to both EM and developed markets.
Though infrastructure is perceived as government owned, it is mostly owned by the private sector. As an asset class it is garnering increased attention by the broader investment community. Infrastructure is an asset-backed investment with specific benefits for portfolio diversification via revenues linked to inflation and relatively stable steady long-term returns. It is an essential enabler, underpinning the ability of economies and societies to thrive. Despite variations in how it is defined, infrastructure remains true to its origins: the Latin prefix ‘infra’ means ‘below’ and it is this supportive and society-bolstering quality of the asset class that prevails. Infrastructure is widely identifiable in tangible forms such as transportation networks, airports, as well as water, waste, and energy systems. It extends further to facilities for healthcare, senior care, community housing, education and even includes health-related lab testing facilities. Notably, with a growing reliance on the digital realm, it increasingly encompasses intangible assets, such as digital systems, data, and communication networks.
Infrastructure is essential to the prosperity of societies and core to the UN Sustainable Development Goals (SDG). And yet, in the wake of rising climate change pressures, the difficulties in closing the infrastructure finance gap are only amplified, with an estimated shortfall of US$15 trillion to 2040. In the post-pandemic era governments are cash-strapped and unable to meet their infrastructure needs. This problem is further exacerbated by high inflation, high interest rates and macroeconomic uncertainties. Private investors are therefore critical to closing this gap, as they hold an estimated US$3.7 trillion of dry powder (capital commited, but not yet invested). Unfortunately, their perspective is often overlooked when plans are structured, leaving projects unbankable. This is the focus of the Fellowship program: promoting early-stage alignment of stakeholders to mobilize private capital for the development of infrastructure globally.
The SIFP offers a rigorous curriculum, pairing academic teachings and experiential learning. Lectures, case studies and interactive workshops are delivered by a combination of renowned academic faculty and industry subject matter experts, including Schulich’s James McKellar, Professor Emeritus of Real Estate and Infrastructure, Jim Clayton, the Timothy R. Price Chair and Professor in Real Estate and Infrastructure and MREI Program Director, and Karen Shlesinger, SIFP Program Director. Traditional capacity building is extended toward a deeper understanding of decision-making perspectives. The Fellowship program emphasizes the importance of people and collaborative partnerships built on trust. Risk management is key for successful projects, and strategies for risk identification, mitigation, sharing, and assignment are ongoing themes of the program. The investor lens is applied in viewing ‘infrastructure as a business’, highlighting the need for new business models capable of attracting investors. Such models need to provide identifiable benefits to the end-users, while generating target risk-adjusted returns for investors. This is particularly relevant in greenfield infrastructure projects (where no infrastructure pre-exists on site), as these are hardest to fund. The CDPQ’s much touted REM project in Quebec is such a business model, where private investors and government are collaborating to deliver significant societal and economic benefits. Professor McKellar, who has shaped the Fellowship program since its launch, continues to be a pivotal figure in the program, and his recently published book, Infrastructure as Business, offers valuable insights into the investor perspective.
Fifteen of the world’s largest global infrastructure investors are situated in Canada and the Schulich Real Assets team is working with Global Affairs Canada to shape the infrastructure mandate for the 2025 G7 Summit. The Fellowship program leverages an extensive industry network for planning, content, and delivery – instilling an understanding of disparate stakeholder perspectives via direct involvement of investor organizations. Investors participate in Industry Days, Market Sounding Simulations, workshops, and as guest speakers. Industry Days promote engagement and sharing of decision-making criteria and investment strategies. Experiential learning supports the application of teachings. The Keystone Project convenes a mock-investment panel of investors, whereby students develop the skillset to structure projects that can attract private capital. The pivotal negotiation activity involves advisory professionals, honing the hard and soft skills for win-win outcomes.
The rapidly evolving infrastructure sector is core to thriving economies and societies. Notably, the complex infrastructure investment ecosystem is increasingly influential in this dynamic. At Schulich, we are building the global capacity to develop collaborative and successful partnerships that will define the infrastructure of tomorrow.
Karen Shlesinger
Director, Sustainable Infrastructure Fellowship Program
