12 February 2025, Johannesburg - There has been a transformative shift in approaches to infrastructure investment as solidarity-based models emerge as catalysts for sustainable development. Defined by the Group Research Network (GRN) as prioritising mutual co-operation and shared stakeholder responsibility, these models focus on sustainable economic and social outcomes ahead of profit and competition.
The solidarity economy encompasses a number of entities, sectors and countries, all working towards alternative approaches to addressing the needs of society and development. These models currently employ more than 13.6 million people and have played a significant role in shaping legislation, social innovation, and policies in multiple countries. The Global Innovation Lab for Climate Finance, for example, is a public-private partnership which has launched 68 instruments, mobilised more than $4.1 billion in capital, and prioritises innovation and transformation through the development of financially sustainable solutions.
Over the past three years more than 30 researchers have generated more than 40 papers focusing on sharing knowledge and building connections between practitioners and researchers. This work is freely available to encourage deeper discussion and understanding around the value of investments into long-term infrastructure sustainability.
A growing awareness of the importance between solidarity investments and long-term infrastructure sustainability has led to an evolution in financial inclusion leadership. The Development Bank of Southern Africa (DBSA) has fostered strategic partnerships with institutions such as the Agence Française de Développement (AFD) and the Asian Infrastructure Investment Bank (AIIB) to mobilise resources for development across the African continent. The DBSA’s track record reflects the success of this approach having created more than 30,000 jobs and support for minority-owned businesses.
Research from the World Economic Forum underscores this point, showing that inclusive financial approaches can increase the gross domestic product (GDP) of developing economies by as much as 14%. The Green Climate Fund (GCF) echoes this sentiment – supporting projects using solidarity principles has shown long-term success when combining climate resilience with social equality, and the Working Group on Harnessing the Social Impact of PDBs has shown how solidarity investment principles can support a government’s strategies to promote economic transitions that are both just and inclusive.
In 2024, the African Development Bank invested $20 million into the African Infrastructure Fund (AIF) in a bid to catalyse investment, while the ongoing AIF success story is enhanced by initiatives such as the Ethiopia-Kenya electricity highway, paediatric clinic in Tunisia, and Kenya Menengai geothermal project.
These initiatives are particularly impactful in light of the recent Global Infrastructure Outlook which projected a $15 trillion infrastructure investment gap, globally, by 2040. Continued investment into solidarity models are instrumental in bridging this gap while ensuring alignment with the Paris Agreement on climate change and the United Nations Sustainable Development Goals (SDGs).
The impact extends beyond environmental considerations. Through public-private partnerships and innovative financing solutions, solidarity investment models have facilitated the development of integrated systems that improve accessibility for underserved communities. The World Economic Forum estimates that transitioning to a green economy could unlock $10 trillion in market opportunities by 2030, underscoring the importance of aligning financial strategies with sustainability goals through solidarity-based approaches.
As traditional models continue to struggle to meet the complex challenges of sustainable infrastructure development, solidarity investment offers a proven alternative that aligns financial returns with social impact and environmental sustainability. For investors and policymakers, the growing body of research around solidary investment principles reflects how it is becoming increasingly relevant in a landscape defined by evolving global development agendas, COP mandates, and demand for investment that demonstrates environmental resilience.
It is also a model that will come under discussion at the 2025 Finance in Common Summit in Cape Town, South Africa which will include heads of state, government officials, public development banks, international organisations and thought leaders. Offering an opportunity to advance these principles and encourage innovation. The event runs from 26-28 February 2025.
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About the Development Bank of Southern Africa
The Development Bank of Southern Africa (DBSA) is a leading Development Finance Institution (DFI), wholly owned by the government of South Africa. Established in 1983, the DBSA is mandated to promote economic growth and regional integration by mobilising financial and other resources from national and international private and public sectors for sustainable development projects and programmes in South Africa, SADC, and the wider African continent. www.dbsa.org