MAY 2022 SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 1 MOBILITY AND TRANSPORT CONNECTIVITY SERIES SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY CONFERENCE EDITION © 2022 The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved This work is a product of the staff of The World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. 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MOBILITY AND TRANSPORT CONNECTIVITY SERIES SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY MAY 2022 iv MOBILITY AND TRANSPORT CONNECTIVITY SERIES Contents Background.......................................................................................................................................................................................................vii Acknowledgments........................................................................................................................................................................................viii About the Partners.......................................................................................................................................................................................... ix Executive Summary......................................................................................................................................................................................... x Abbreviations and Acronyms.................................................................................................................................................................... xx 1. Introduction.................................................................................................................................................................................................1 2. Road Injuries and Fatalities: The Invisible Crisis........................................................................................................................8 The Far-Reaching Costs of Road Crashes ..............................................................................................................................9 The Invisibility of the Crisis ....................................................................................................................................................13 The Market Failure in Road Safety ........................................................................................................................................14 3. Addressing the Market Failure in Road Safety........................................................................................................................20 Valuing Road Safety and Developing Sustainable Revenue Sources................................................................................24 Directing Capital to Road Safety through the Sustainable Finance Market....................................................................28 Catalyzing Investment with Blended Finance......................................................................................................................30 Facilitating Sustainable Impact through Technical Assistance.........................................................................................38 4. Structuring Investable Road Safety Projects.......................................................................................................................... 44 High-Potential Road Safety Project Archetypes..................................................................................................................45 Country and Local Context Considerations..........................................................................................................................47 Investment Structures for Road Safety.................................................................................................................................49 Results Frameworks and Monitoring and Evaluation.........................................................................................................69 Risk and Mitigation Strategies...............................................................................................................................................72 5. Forward Together...................................................................................................................................................................................80 Coordinated Efforts to Build Evidence and Proofs of Concept..........................................................................................82 Development Actors to Lead the Way for Road Safety Investments................................................................................83 Public Authorities to Create the Necessary Enabling Environment..................................................................................87 Private Sector to Participate in Making Road Safety Investable.......................................................................................90 6. Platform to Drive Scale......................................................................................................................................................................94 7. Appendices.............................................................................................................................................................................................100 Appendix A. Mapping Road Safety to the SDGs.................................................................................................................101 Appendix B. Methodology for Selecting the Eight Road Safety Project Archetypes.....................................................106 Appendix C. Investment Structures....................................................................................................................................109 Appendix D. Results Framework Illustration for All Eight Project Archetypes..............................................................125 Appendix E. Country Analysis for 10 Select Low- and Middle-Income Countries..........................................................126 Appendix F. Implementation Guides by Project Archetype.............................................................................................130 SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY v Boxes Box 1.1. The 12 Global Road Safety Performance Targets of the United Nations................................................................................ 6 Box 2.2. iRAP Star Ratings..........................................................................................................................................................................17 Box 3.1. Investment Case with Strong Internal Rates of Return from Lifetime Insurance Claims Reduction in Australia........... 26 Box 3.2. Infrastructure Group Leveraging Sustainability-Linked Loans in Chile................................................................................ 30 Box 3.3. IDA Private Sector Window.......................................................................................................................................................... 34 Box 3.4. Mobilizing Health Funding Toward Prevention—an Investment Case from Cambodia...................................................... 36 Box 4.1. Issuance of a Sovereign SDG Bond to Global Capital Markets................................................................................................ 53 Box 4.2. Vehicle Inspection Fees Funding Road Safety in Turkey.......................................................................................................... 57 Box 4.3. A Public-Private Partnership in a Middle-Income Country with Financial Incentives for Road Safety.............................. 58 Box 4.4. Physical Rehabilitation Centers through a Human Impact Bond in Mali, Nigeria, and the Democratic Republic of Congo...................................................................................................................... 65 Box 4.5. The Education Outcomes Fund................................................................................................................................................... 67 Box 5.1. Cost-Effective Tools to Build an Enabling Environment for Road Safety in LMICs............................................................... 88 Box 5.2. World Bank-Supported Road Safety Calculator for High-Level Decision-Making................................................................ 89 Box 5.3. Coordinated CSR and Donor Initiatives in India with the Aim of Reaching Zero Road Fatalities....................................... 91 Figures Figure E.1. Funding Gap for Road Safety................................................................................................................................................... xi Figure E.2. Structuring Projects for Road Safety.................................................................................................................................... xiv Figure E.3. Building Investable Road Safety Projects............................................................................................................................ xvi Figure E.4. A Platform to Facilitate Multi-Actor Partnerships to Scale Road Safety........................................................................ xviii Figure 1.1. Point of Comparison, Road Trauma vs. COVID-19................................................................................................................. 2 Figure 1.2. Annual Road Safety Funding Gap vs. Global Road Investments.......................................................................................... 4 Figure B1.1.1. UN Global Road Safety Voluntary Performance Targets................................................................................................. 6 Figure 2.1. Visual Representation of the Far-Reaching Costs of Road Traffic Incidents...................................................................... 9 Figure 2.2. Reactive vs. Preventative Spending ...................................................................................................................................... 10 Figure 2.3. Road Fatality to Injury Ratio .................................................................................................................................................. 10 Figure 2.4. Road Fatalities by Age in LMICs, 2019................................................................................................................................... 11 Figure 2.5. Global Road Fatalities by User, 2018..................................................................................................................................... 12 Figure 2.6. Fatalities from Road Injury Over Time and Projected to 2030........................................................................................... 12 Figure 2.7. Road Fatalities per 100,000 for Ten Low- to Middle-Income Countries............................................................................ 12 Figure 2.8. Global Health Development Financing vs. Percentage of Total Deaths in LMICs........................................................... 13 Figure 2.9. iRAP Star Rating: Relationship between Safety Standards and Costs of Fatalities and Seriously Injured per Kilometer Traveled................................................................................................................................................................ 14 Figure B2.1.1. Photo of Crash on the Monrovia–Ganta Highway.......................................................................................................... 15 Figure 3.1. Global Sustainable Bond Market: 2015–2020 Historical and 2021 Estimated.................................................................. 22 Figure 3.2. Project-Based Approach for Sustainable Road Safety Investments.................................................................................. 23 Figure 3.3. Potential Revenue Streams for Road Safety Investments.................................................................................................. 25 Figure B3.1.1. Victoria Road Network: Projected Costs Avoided.......................................................................................................... 27 Figure B3.1.2. Bruce Highway: Projected Costs Avoided....................................................................................................................... 27 Figure 3.4. Two Options for Sustainable Debt Issuance......................................................................................................................... 29 Figure 3.5. Spectrum of Investors and the Opportunity for Blended Finance.................................................................................... 31 Figure B3.4.1. Impact Bond Structure for a Helmet-Wearing Campaign............................................................................................. 37 Figure 3.6. Technical Assistance to Support Low- and Middle-Income Countries.............................................................................. 38 Figure 4.1. Eight Project Archetypes with Strong Potential for Private Sector Involvement............................................................ 46 vi MOBILITY AND TRANSPORT CONNECTIVITY SERIES Figure 4.2. High-Level Analysis of Context Potential for Private Investments for Road Safety........................................................ 47 Figure 4.3. Primary Actors in Investment for Road Safety..................................................................................................................... 49 Figure 4.4. Overview of the Five Investment Structures........................................................................................................................ 51 Figure 4.5. Model A1: Sovereign and Multilateral Bond issuances...................................................................................................... 52 Figure 4.6. Examples of World Bank Engaging with Investors on the Sustainable Development Goals......................................... 54 Figure 4.7. Model A2: Financing to a Subnational Entity........................................................................................................................ 55 Figure 4.8. Model B: Financing a New Public-Private Partnership........................................................................................................ 56 Figure B4.2.1. Turkey Vehicle Inspection Centers Investment Structure............................................................................................ 57 Figure B4.3.1. PiPa Lot Investment Structure.......................................................................................................................................... 58 Figure 4.9. Model C: Additional Debt for an Existing Public-Private Partnership............................................................................... 59 Figure 4.10. Model D: Direct Financing to a Corporate Entity............................................................................................................... 60 Figure 4.11. Money Flows in Outcomes-Based Financing...................................................................................................................... 62 Figure 4.12. Outcomes-Based Funding and Financing........................................................................................................................... 63 Figure 4.13. Model E1: Single Project Outcome Funding to a Private or Public Entity or Impact Bond........................................... 64 Figure B4.4.1. The ICRC Humanitarian Impact Bond Structure............................................................................................................. 65 Figure 4.14. Model E2: Outcome Funds for Scaling at a National or Regional Level.......................................................................... 66 Figure 4.15. Outcome Funds Support Continuous Learning and Adaptive Delivery.......................................................................... 67 Figure 4.16. Model E3: “Last-Mile Model—Using an Outcomes-Based Approach in Combination with the System-Level Targets in Models A to D............................................................................................................... 68 Figure 4.17. An Illustration of a Results Framework That Maps Activities to Final Outcomes.......................................................... 69 Figure 4.18. Illustrative Mapping of the Potential Wider SDG Linkages of Road Safety Interventions........................................... 71 Figure 5.1. Forward Together to Scale the Mobilization of Private Capital for Road Safety............................................................. 81 Figure 6.1. A Platform to Facilitate Multi-Actor Partnerships to Scale Road Safety........................................................................... 95 Figure 6.2. Initial Steps to Mobilizing the Platform................................................................................................................................ 98 Figure A.1. Mapping Across the Eight High-Impact Project Archetypes............................................................................................101 Figure B.1. National Road Safety System Pillars...................................................................................................................................106 Figure B.2. Review of Road Safety Interventions Analysed According to Their Measured Impact and Potential for Private Sector Participation.............................................................................................................................................................108 Figure C.1. Illustrative Mapping of Road Safety Project Archetypes to Selected Business Models................................................109 Figure D.1. Illustration of a Results Framework Aligned with SDGs...................................................................................................125 Figure E.1. Public Sector Readiness and Private Sector Participation Potential for 10 Countries..................................................126 Figure E.2. Regulatory Framework and Enforcement Ratings for 10 Countries...............................................................................128 Figure E.3. Top Causes of Road FSIs Across 10 Countries....................................................................................................................128 Figure E.4. Percentage of Road Fatalities Relative and Road Safety Ratings per User Type...........................................................129 Tables Table 3.1. Blended Finance Instruments......................................................................................................................................33 Table 4.1. Ethical Risks and Mitigation.........................................................................................................................................72 Table 4.2. Execution Risks and Mitigation....................................................................................................................................74 Table 4.3. Financial Risks and Mitigation.....................................................................................................................................76 Table A.1. Mapping of Road Safety to SDG Targets..................................................................................................................102 Table B.1. Synthesis of Implementable Project Archetypes....................................................................................................107 Table B.2. Potential Private Sector Role in Road Safety...........................................................................................................108 SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY vii Background Road crashes are one of the leading causes of fatalities and serious injuries (FSIs), affecting more than 50 million annually worldwide, of which over 90 percent of the burden is borne by low- and middle-income coun- tries (LMICs). The World Bank estimates a significant funding gap in road safety of US$260 billion to achieve Sustainable Development Goal (SDG) Targets 3.6 and 11.2 in the next 10 years.1 The World Bank recognizes that this gap cannot be closed through public funding alone, and thus mobilization of private capital is required. The World Bank and International Finance Corporation (IFC)—together, the World Bank Group (WBG)—in partnership with the International Road Assessment Programme (iRAP) and the Fédération Internationale de l’Automobile (FIA) High Level Panel for Road Safety, have undertaken a project to investigate the potential for private capital mobilization to close this gap. To achieve this objective, the partners aim to develop business models to channel private investment in road safety projects, consisting of subnational, public-private partner- ships (PPPs) and corporate investments, and leverage the growing sustainable debt market, including social and sustainability-linked financings. The WBG identified business models and financing instruments to enable greater private investment in road safety and engaged a team of consultants from Dalberg Advisors and Cardno to further evaluate their viabil- ity, as well as to examine their potential in 10 countries spread across Latin America, Asia, and Africa. In these countries, operationalization opportunities and challenges were assessed, including through identification of potential pilot projects. In the second phase of work, Social Finance and Impact Strategists were engaged to bring an impact investment lens to this issue. To this end, a series of solutions have been designed, including eight high-impact project archetypes, a framework for designing road safety projects, and five possible invest- ment structures. This report serves as a public facing paper that brings to the fore some of the key findings from this work. This report presents the main analysis and conclusions derived from the project. It is based on the inputs from the specialized consultants mentioned above working under the direction of the WBG and partners. It is also based in part on findings from more than 50 stakeholder interviews with road safety experts, public sector authorities, ecosystem actors, concessionaires, asset managers, and corporate social responsibility (CSR) funds and investors active across Latin America, Sub-Saharan Africa, and South Asia. 1 SDG Target 3.6: Halve the number of global deaths and injuries from road traffic accidents; SDG Target 11.2: Provide access to safe, affordable, accessi- ble, and sustainable transport systems for all, improving road safety, notably by expanding public transport, with special attention to the needs of those in vulnerable situations, women, children, persons with disabilities, and older persons. viii MOBILITY AND TRANSPORT CONNECTIVITY SERIES Acknowledgments The project was jointly led by Daniel Pulido (IFC) and Veronica I. Raffo (World Bank) and received funding from IFC, the Global Road Safety Facility (GRSF) and the Public-Private Investment Advisory Facility (PPIAF). The core project team and main contributors to the report include Rob McInerney (iRAP), Miquel Nadal (FIA HLP), Cyr Florient Sedjro Medo (IFC), Daphnée Benayoun (Dalberg), Jesse Baver (Dalberg), Heta Jangla (Dalberg), Kusi Hornberger (Dalberg), Deema Malki (Dalberg), Anna Schnupp (Dalberg), Tushar Thakkar (Dalberg), Andy McLoughlin (Cardno), Jane Newman (Social Finance), Saskia Thomas (Social Finance), Dalia Zileviciute (Social Finance) and Rosemary Addis (Global Ambassador of the Global Steering Group for Impact Investment). Overall leadership for the report’s development was provided by Binyam Reja, Global Manager for Transport (World Bank); Diep Nguyen-Van Houtte, Global Pre-Investment and Project Development Manager for the infrastructure sector (IFC); Ian Twinn, Global Transport Manager (IFC); and Shomik Mehndiratta, Practice Manager for South Asia Transport Unit (World Bank). The team is grateful for the valuable feedback received from peer reviewers and other WBG colleagues, at various iterations, including: John Gregory Graham, Pankaj Gupta, Daniel Benitez, Said Dahdah, Cecilia Briceño- Garmendia, and Stephen Perkins (International Transport Forum). This initiative and the Knowledge Report benefitted from overall guidance and support provided by a Steering Committee that included the following experts: Denise Odaro (Head of Investors Relations at International Finance Corporation, WBG); Bertrand Badre (Blue Orange Capital); Donald Kanak (Prudential); Binyam Reja (Global Manager for Transport, World Bank); Agustin Aguerre (Manager, Infrastructure and Energy, Inter- American Development Bank); Kelly Larson (Director Bloomberg Philanthropies); Max Jensen (Head of Regional Transport Division, European Investment Bank); Rosemary Addis (Chair of Global Steering Group for Impact Investment); Saul Billingsley (Director General of FIA Foundation); Ylva Wessen (CEO Folksam). SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY ix About the Partners iRAP is the umbrella program for Road Assessment Programs (RAPs) worldwide that are working to save lives through improved road safety. iRAP uses a robust, evidence-based approach (risk mapping, star rating, safer roads investment plans, and policy and performance tracking tools) to help inform www.irap.org sound investment by public and private entities worldwide into road safety. The Fédération Internationale de l’Automobile (FIA) High Level Panel for Road Safety is an initiative that convenes global leaders to create and implement innovative solutions to road safety’s most pressing challenges. The panel brings together a coalition of leaders from the global business community, international institutions, and nongovernmental organizations, with the primary objective of raising awareness and funding for road safety actions, especially in LMICs. Executive Summary SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY xi The negative impacts of road deaths and seri- Road Safety Collaboration, have developed a Global ous injuries point to a significant market failure. Plan for the Decade of Action to support implementa- Markets do not currently account for how roads and tion. Aligned with the global plan, this report exam- their use impact our societies and economies. Private ines the need for private capital to be mobilized to capital and markets can and must be harnessed to achieve those road safety goals and the opportuni- address this failure. The funding gap is large and ties for road safety to become an investable area and the current ways in which roads and vehicles are harness the momentum of the sustainable finance financed is perpetuating the problem. movement. The report sets out eight key road safety interventions that are more suitable for private sec- Continuing with “business as usual,” more than tor engagement and examines five principal invest- 375 million mostly young people will be killed ment structures to deliver sustainable outcomes for and injured in road crashes over the next decade safer roads, including in low- and middle-income resulting in a more than US$20 trillion loss to the countries (LMICs). global economy by 2030 (McInerney and Smith 2020). The global crisis in road safety simply cannot be ignored. Figure E.1. Funding Gap for Road Safety Achieving safer roads and road use is possible; it requires a realignment of incentives across safety outcomes and commercial interests. Public authori- ties, development actors, and private investors hold the power to change how road safety is regulated, monitored, and factored into investment deci- to halve sion-making. The United Nations (UN) estimates that global road an investment of US$260 billion is needed to halve deaths by road deaths over the next 10 (figure E.1). Although this is a sizeable investment, it represents a fraction $260 of the cost that will be incurred otherwise. billion total investment In September 2020, the international commu- needed nity reaffirmed its commitment to halving road deaths by 2030 through a Second Decade of Action for Road Safety 2021–2030, with the UN General Assembly’s adoption of the “improving global road safety” resolution.1 The World Health Source: Original figure produced for this publication. Organization (WHO) and the UN regional commis- sions, in cooperation with other partners in the UN 1 More information on and resources for the World Health Organization’s Decade of Road Safety 2021–2030, is available online at the WHO website: https://www.who.int/teams/social-determinants-of-health/safety-and-mobility/decade-of-action-for-road-safety-2021-2030. xii MOBILITY AND TRANSPORT CONNECTIVITY SERIES The Invisible Global Crisis of Dangerous Roads The impacts of road traffic crashes reach far into Unsafe roads are an invisible pandemic in our the economy and can cost LMICs as much as 6 modern society. Road traffic crashes are one of the percent of their GDP (McInerney and Smith 2020). largest killers globally; however, they are preventable. The costs of a road traffic crash do not end at the With 1.35 million killed annually on the world’s roads, roadside; they create ripple effects throughout the and up to another 50 million injured, road traffic wider economy. Loss of income, property damage, crashes represent the eighth leading cause of death— insurance premiums, loss of taxes, and burdens on higher than HIV/AIDs or tuberculosis. Victims of road the health sector are just some of the far-reaching crashes are most likely to be young and working age costs associated with road traffic crashes. Although people. Road traffic crashes are the leading cause of these costs are dispersed, they add up. The total death globally for children and people between the cost to LMICs is estimated at US$1.7 trillion per year ages of 5 and 29, and 64 percent of road fatalities are (McInerney and Smith 2020). Ultimately, these costs people under the age of 50.22. However, this crisis are mostly borne by the victims and their households. remains largely invisible. Road traffic crashes are fre- The financial burdens of road traffic crashes can quently framed as “accidents” and “one-off” instances trap households in poverty. There is also a gendered of human error; in reality, the overwhelming body of dimension to these costs; almost three times as many evidence indicates that road traffic crashes are both people killed in road traffic crash accidents are men, predictable and preventable (WHO 2018). Road traffic and where men are more likely to have been the pri- crashes are not an unavoidable side effect of urban mary income earners this can increase the financial and rural development. Prevention can and should burden on households. In the case of serious injuries, rise in priority in the global agenda. additional burden is placed on female family mem- bers who are more likely to be responsible for long- LMICs bear the highest burden, experiencing 90 term care for the seriously injured (WHO 2002). percent of global road deaths despite having less than 60 percent of the vehicles (WHO 2021). While Addressing the Market Failure in Road Safety high-income countries (HICs) have made steady prog- The market’s failure to appropriately account ress in recent decades to improve road safety, this for the costs of road traffic crashes is one of the improvement has largely left LMICs further behind. prime reasons for underinvestment by the pri- This trend is only projected to worsen with increas- vate sector in road safety. While the economic case ing rates of urbanization and motorization. Without for better road safety is often clear, incentives are action, the annual death toll will approach 1.5 million misaligned. As the costs of dangerous roads, vehicles, in LMICs by 2030. As it stands, annual totals for and road use are dispersed across the economy, little fatalities from road injuries are higher than those financial incentive exists to invest in safety beyond from COVID-19 for 2020 in LMICs—yet less than 1 the minimum enforced standards. In cost-competi- percent of health development assistance to LMICs is tive environments, this can lead to important safety allocated to trauma care (Stewart et al. 2019). investments becoming deprioritized, even though many private and public actors benefit financially 2 Explore the World Health Organization’s Global Health Observatory database for these and more road safety statistics: https://www.who.int/data/gho/ data/themes/road-safety. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY xiii from safer roads. Those who benefit include the impact and a return on investment for private health care sector, insurance companies, operators capital. This report defines four steps as part of this of commercial fleets, and road users. Some of these process, which can be brought together through beneficiaries currently face barriers to engaging in investment structures that make it easier for inves- crash prevention due to a lack of discrete, investable tors to move into the space (figure E.2). By taking a projects or because the social and environmental more holistic view of the costs and benefits, and by costs and benefits are not being priced in by the mar- aligning incentives to reflect them, road safety can ket or are not transparent. be positioned to access capital through the sustain- able finance market, such as through the issuance The growth of socially responsible investing and of social debt (bonds or loans) aimed specifically at the sustainable finance market offers a new funding road safety interventions, or sustainabili- opportunity to address this market failure and ty-linked debt (bonds or loans), which tie the cost translate the economic case into an investable of financing to the attainment of road safety tar- business case for road safety investment. The gets. The developing frameworks responding to sustainable finance movement seeks to capture and and setting expectations for scaling up investments internalize the total cost of doing business, including that have positive social and environmental bene- the wider environmental and social impacts, thereby fit, including green and social bond principles and accounting for the negative externalities of economic sustainability bond guidelines introduced by the development. Driven by public and investor demand, International Capital Markets Association (ICMA), can the sustainable finance movement is growing rapidly. also be applied (see the discussion on sustainable More investors and companies are required to or are finance on the ICMA website). opting into reporting on their environmental, social, and governance (ESG) impact, and the sustainable Recognizing the costs and benefits of road safety finance market has seen huge growth in the number can also inform innovative mechanisms to cre- of investors seeking pro-social-investment opportuni- ate and align incentives for investment. Where ties that directly target the Sustainable Development needed, blended finance can be used to support Goals (SDGs). In 2020, new records were set with total this process, offering catalytic grant funds to mit- sustainable debt issuance reaching US$732 billion igate specific investment risks and help rebalance (Henze 2021). Other areas, such as climate change risk-reward profiles of pioneering, high-impact road and COVID-19 relief, have successfully leveraged this safety investments so that they have the potential growing market to expand their pool of available cap- to become commercially viable over time. Finally, ital, including through bond markets. However, road technical assistance can support or, where appropri- safety, despite having a clear mandate within the ate, anchor the process, assisting governments and SDGs, is yet to harness this movement. implementers and creating the enabling environment needed to ensure the impact and long-term sustain- For capital from the sustainable finance market ability of road safety investments. Technical assis- to flow to road safety, road safety will need to be tance can also help governments and implementers woven into sustainability strategies and perfor- structure the investment case, blended finance mech- mance targets whereby priority interventions in anisms, and identify sources of revenue or allocate LMICs are structured to deliver both lifesaving funding differently. xiv MOBILITY AND TRANSPORT CONNECTIVITY SERIES Figure E.2. Structuring Projects for Road Safety                                                                                           Source: Original figure produced for this publication.  Structuring Investable Road Safety Projects infrastructure for vulnerable users, emergency This report focuses on concrete, achievable steps medical services, and specialist trauma centers. Each that inform structuring of investable opportuni- has been chosen for their measurable impact on ties to improve road safety. The analysis draws on reducing fatal and serious injuries (FSIs), and for their the existing literature and more than 50 consulta- potential to attract private sector participation. tions with experts and stakeholders in the ecosystem. Through these structures, the analysis highlights Eight road safety project archetypes are identi- potential revenue sources that could support fied as examples of approaches that could attract investment. Some models enable revenue streams private sector engagement and have strong to be generated from users and beneficiaries of potential to save lives. Based on a review of more safer roads, such as through increased tolls, road than 100 road safety countermeasures, these eight taxes, vehicle inspection fees, or fines for speeding. project archetypes have been selected to span three Corporates (such as a car insurance company or of the key pillars of road safety: safer vehicles, safer a commercial fleet operator) are also identified as roads, and post-crash response. The eight road safety potential funders based on the benefits they derive project archetypes are: vehicle inspection and certifi- from savings from reduced crashes. Where it is more cation centers, commercial fleet upgrades, infrastruc- challenging to identify revenue streams or price in ture upgrades on new road concessions, upgrade the cost of unsafe roads or vehicles, governments of protective highway infrastructure, speed man- can ring-fence funding for road safety from a wider agement and automated enforcement, protective range of sources—such as a new fuel tax or a levy SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY xv on motor insurance premiums. As focus and regula- Model E: Outcomes-based funding and financ- tion develop to put the spotlight on more sustainable ing encompassing impact bonds (Model production and investment, an opportunity arises E1), outcome funds to drive national and to include requirements for minimum standards regional scale (Model E2), and a “last-mile” that encompass both environmental performance approach used in combination with Models and safety. The choice of revenue source to sup- A to D to optimize system-level and user- port investment is not neutral; instead, it presents level road safety outcomes (Model E3). an opportunity to explore user charges or levies that capture negative externalities and incentivize Together, these models highlight the potential for improvements. Where impact is attributable and actors to come together in different combinations measurable, returns on investment can be tied to the and through different structures. The investment achievement of safety outcomes, ensuring a results- structures vary according to private or public bor- driven approach is taken and that safety remains the rower, the type of debt used, the type of revenue first priority. streams that can be engaged, and the road safety projects that are most suitable. Five main investment structures are explored in depth in this report; each is designed to bring in This report examines where blended finance can a mix of investors, borrowers, and funders appro- play a valuable role. Considerations include where priate to the context and project. The investment it can be appropriate for funders to support the structures illustrate possible permutations across financial viability of an investment: for example, to the private-public spectrum of borrowers, including address specific investment risks and help rebalance public-led investments, public-private partnerships risk-reward profiles. In some cases, blended finance (PPPs), private-led initiatives, and outcomes-based can be applied to incentivize or optimize investment funding and financing. structures for better achievement of road safety outcomes. Funding can also be deployed as technical Seven models are identified within these five main assistance or to support independent evaluation or investment structures: to provide additional capability such as education or enforcement capacity, which can play a critical role in Model A: Social and sustainability bonds issued by driving results. national governments and multilateral agencies (Model A1) and by subnational There follows further analysis of how to assess governments (Model A2) the suitability of these investment structures for different contexts, considering possible risks and Model B: Financing of new PPPs mitigation strategies. Bringing together investment with road safety initiatives may involve both invest- Model C: Additional debt financing of existing PPPs ment risks and impact risks that need to be managed, shown in figure E.3. Where donor or public funds are Model D: Direct financing to corporate entities xvi MOBILITY AND TRANSPORT CONNECTIVITY SERIES involved, there could also be ethical risks to con- through robust monitoring and evaluation (M&E) sider and the need to ensure probity and value for processes; rigorous technical assistance; strong pro- money. Each of these dimensions can be designed gram, contracting, and investment design; and the for and managed with clear mitigation strategies. strategic use of blended finance mechanisms and The increasing sensitivity to reputational risk of poor outcome funding to align incentives. The need for impacts and risk that of insufficient management institutional capacity building, including within the and accountability that is focused on sustainability public sector, to ensure improvements in road safety are also considered. This report lays out some of the are sustained over the long term is also considered. primary challenges, and how these can be mitigated Figure E.3. Building Investable Road Safety Projects +96) 030?C?A>6A0C74=443B0=3 >??>ACD=8C84B>5C74 <0A:4C 645A5645 6:=.0A =?<720A.?052AF=2@ C>34;8E4A;854 B0E8=6 8=C4AE4=C8>=BF78;BC >554A8=60A4CDA=>= 8=E4BC<4=C 6C26;C2@A:2;A @A?B0AB?2@ C>;4E4A064 ?A8E0C420?8C0; '6@8 #<;6A<8C860C4 C>4=BDA48=B4@D4=24B 4E834=2410B4 Source: Original figure produced for this publication. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY xvii The Way Forward Mobilizing private capital to improve road safety participation via PPPs and in creating the revenue will require effort from public and private stake- streams required to pay for the services provided holders. National and global efforts that focus on under these PPPs. They may also be best placed in creating evidence to clearly define the investment some cases to approach markets to demonstrate the case of road safety will accelerate progress. This will application of investment structures such as sustain- help connect the available evidence on the social ability bonds. The private sector completes the puzzle and economic effects of road traffic incidents with by bringing new pools of capital and a critical eye transport policy, how road infrastructure is commis- toward the social impact of its activities and invest- sioned and delivered, and increasingly shed light on ments. Private sector actors can bring structuring the externalized costs of current infrastructure and expertise and technical assistance to the table as well unsafe vehicles in many countries. Activating projects as capital and project execution. on the ground and sharing learnings between public, private, and development actors will build the foun- dations of an evidence base and demonstrate what is A Platform to Drive Scale possible. From this base, efforts can then be scaled. As a foundation for bringing actors together for this coordinated approach to road safety invest- Development actors can, and will need to, lead ment, the World Bank Group (WBG) is develop- the way, with development finance institutions ing a platform for private capital mobilization. (DFIs) acting as first-mover investors, and donors As illustrated in figure E.4, this platform will build on providing catalytic grant funds to crowd in pri- existing measures and bring together the expertise vate investment to opportunities with lifesaving and capacities of actors from across the ecosystem impact. Public authorities hold the key to creating to design and implement solutions, remove barriers the necessary enabling environment. For instance, to private sector participation, and build the evidence national treasuries play a vital role in breaking silos, base. The platform functions will include design, reduced traffic collisions produce savings to public piloting, refinement, and scaling of road safety invest- finances, and the public sector case is strong to invest ments in LMICs. It is intended to provide a unified in improving enforcement, regulation, and monitor- place where those seeking to improve road safety ing of road safety, thus setting standards in line with in their local market can be connected to the invest- international best practices and holding concession- ments, blended finance, and technical assistance that aires accountable to these standards. Public author- they need to build sustainable road safety projects ities also have a critical role to play in identifying with private participation. road safety projects that can include private sector xviii MOBILITY AND TRANSPORT CONNECTIVITY SERIES " Figure E.4. A Platform to Facilitate Multi-Actor Partnerships to Scale Road Safety )20;01;4 8=E4BC01;4 ?A>942CB 'A>942C )C0=30A3B ?8?4;8=4 =>AF;4364 30C0 ;40A=8=6 4E834=24 Source: Original figure produced for this publication. With less than a decade remaining to uphold the transactions can catalyze the market and inform a international commitment to halving road deaths, build out strategy for the platform by increasing data, now is the time for taking action. Facilitating early examples, know-how, and convening power. transactions will be a critical first step, to be taken in parallel with a user-centered approach to the design A platform anchored in the wider ecosystem can of the platform’s key pillars to ensure they meet the play a vital role in attracting more and different needs of the market and complement existing work. actors and driving scale. This will help position road The recommended approach places initial focus on safety investment in sustainable finance markets and the design and launch of an early blended finance win- support actionable progress toward meeting SDG tar- dow to support projects that incorporate the required gets and the goals set by the international commu- road safety standards and data principles. These nity to at least halve global road deaths by 2030. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY xix References Henze, Veronika. 2021. “Sustainable Debt Breaks Annual Record Despite Covid-19 Challenges.” BloombergNEF, January 11, 2021. Accessed March 11, 2021. https://about.bnef.com/blog/ sustainable-debt-breaks-annual-record-despite-covid-19-challenges/. McInerney, Rob, and Greg Smith. 2020. “A World Free of High-Risk Roads: The Business Case for Safer Roads.” iRAP Vaccines for Roads. Accessed March 11, 2021. https://www.vaccinesforroads.org/business-case-for-safer-roads/. Stewart, Barclay, Sara Hollis, Stas Salerno Amato, Eileen Bulger, Charles Mock, and Teri Reynolds. 2019. “Trauma Care and Development Assistance: Opportunities to Reduce the Burden of Injury and Strengthen Health Systems.” Bulletin of the World Health Organization 97 (5): 371–373. Accessed March 11, 2021. https://www.who.int/bulletin/ volumes/97/5/18-213074/en/. WHO (World Health Organization). 2002. Gender and Road Traffic Injuries. Geneva: WHO. Accessed March 23, 2021. https://apps.who.int/iris/bitstream/handle/10665/68887/a85576.pdf. WHO (World Health Organization). 2018. Global Status Report on Road Safety 2018. Geneva: WHO. Accessed March 11, 2021. https://www.who.int/publications/i/item/9789241565684. WHO (World Health Organization). 2021. “Road Traffic Injuries.” Fact Sheet. June 21, 2021. Accessed March 11, 2021. https://www.who.int/news-room/fact-sheets/detail/road-traffic-injuries. xx MOBILITY AND TRANSPORT CONNECTIVITY SERIES Abbreviations and Acronyms AIPF Asia Injury Prevention Foundation LIC low-income country ARTESP Agência de Transporte do Estado de São Paulo LMIC low- and middle-income country AASA Automobile Association of South Africa M&M Mahindra & Mahindra BIGRS Bloomberg Initiative for Global Road Safety MIC middle-income country BCR benefit-cost ratio MIGA Multilateral Investment Guarantee Agency CDC (U.S.) Centers for Disease Control and Prevention M&E monitoring and evaluation CSR corporate social responsibility MDB multilateral development bank DFI development finance institution MDB WGST Multilateral Development Banks Working Group on Sustainable Transport DRIVER Data for Road Incident Visualization Evaluation and Reporting NGO nongovernmental organization EMS Emergency Medical Services ODA official development assistance ESG Environmental, Social, and Governance PIARC Permanent International Association of Road Congresses EU European Union FSI fatal and serious injury PiPa Piracicaba-Panorama FIA Fédération Internationale de l’Automobile PSW Private Sector Window GDP gross domestic product RTI road traffic incident GNI gross national income SDG Sustainable Development Goal GRSF Global Road Safety Facility SLB sustainability-linked bond HIB Humanitarian Impact Bond SLL sustainability-linked loan HIC high-income countries SPI Safety Performance Indicator ICMA Institute of Cost and Management Accountants TA technical assistance ICRC International Committee of the Red Cross TAC Transport Accident Commission IDA International Development Association UN United Nations IFC International Finance Corporation VGF viability gap funding iRAP International Road Assessment Programme WHO World Health Organization IRR Internal Rate of Return ZFC Zero Fatality Corridor KPI key performance indicator 1. Introduction 2 MOBILITY AND TRANSPORT CONNECTIVITY SERIES With 1.35 million people killed in road crashes While some important advances were made, every year, road safety is a global health crisis progress fell short of the targets set by the deserving urgent international attention and United Nations (UN) to halve global road deaths action. Beyond the 1.35 million fatalities, a further by 2020. The Decade of Action for Road Safety was 50 million suffer injuries, including lifelong disabili- an ambitious international commitment by the UN ties (WHO 2020). Road crashes are the eighth lead- General Assembly to stabilize and then reduce global ing cause of death globally, and the leading cause road deaths between 2011 and 2020. This commit- of death for children and youth aged 5 to 29 years, ment was bolstered in 2015 with the Sustainable making road injuries more fatal than tuberculosis Development Goals (SDGs), which set the official or HIV/AIDs (WHO 2018). The burden of road fatal- target of halving global road deaths by 2020. These ities and injuries is also disproportionately high in international commitments made positive steps in low- and middle-income countries (LMICs), which raising global awareness about road safety, help- bear 90 percent of global road deaths despite having ing to stabilize the global rate of road deaths, and less than 60 percent of the vehicles. The annual toll bringing several countries’ road safety laws in line of road crash victims and fatalities exceeded that of with international best practices (WHO 2021a). COVID-19 in LMICs in 2020, yet road safety received Furthermore, over the decade, there was a consid- only a fraction of the development assistance (see erable decline in traffic deaths in some geographi- figure 1.1). Dangerous roads are a health crisis pro- cal areas, including the European Union (EU), Brazil, jected to only worsen with increasing urbanization, and the Russian Federation (WHO 2021b). However, yet in many contexts, it remains an invisible crisis low road deaths globally increased over this period and on the public agenda. the target to halve global road deaths is yet to be reached. Figure 1.1. Point of Comparison, Road Trauma vs. COVID-19 There is a great deal to be learned from a decade of international efforts on road safety, and lessons and best practices are beginning to emerge. This World Bank report focuses on the following three lessons from the past Decade of Action for Road Safety: • Low- and middle-income countries (LMICs) must be supported to curb rising trends in road crashes and fatalities. Progress on the Decade of Action has largely left LMICs behind. Whereas road traffic deaths have steadily fallen Annual COVAX vaccine Health in most high-income countries (HICs), they have road funding for development crashes LMICs (2020) assistance for continued to rise in LMICs on average, spurred by trauma rapid urbanization and motorization within weak (annual) policy and enforcement environments. Source: Gavi 2020; Our World in Data: “Total Confirmed COVID-19 Cases”; Our World in Data: “Total Confirmed COVID-19 Deaths”; WHO 2021a. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 3 • Greater investment is needed to close the been insufficient to meet SDG Target 3.6 (halving US$260 billion funding gap over the next 10 the number of global road deaths and injuries by years. The Decade of Action has shown that while 2020), the 2020 Stockholm Declaration emphasized policy changes are crucial, these must be rein- that with just 10 years left to deliver on the SDGs, forced through investments. Financing is needed member states and stakeholders share a responsibil- to improve infrastructure, fund enforcement, and ity to recommit to road safety. With 2021-2030 now develop traffic management capacity. Investment officially recognized as the Second Decade of Action can also act as an incentive to update national for Road Safety, key regional and global actors have policies and standards. The UN estimates a sus- already begun work under this reaffirmed mandate tained investment of US$26 billion each year over and toward the 12 UN voluntary road safety perfor- the next decade will be needed to achieve the SDG mance targets (see box 1.1). At the coordination level, targets on road safety and inclusive transport by the World Health Organization (WHO), together with 2030 (SDG Targets 3.6 and 11.2) (UN Road Safety UN regional commissions and partners of the UN Fund 2016).1 Road Safety Collaboration, will support the engage- ment with member states on regional, national, and • The private sector must be engaged to play local implementation of the plan and associated a role in changing the road safety landscape. monitoring. Given the size of the funding gap, road safety cannot be championed by the public sector alone. Further political leadership and commitment is Furthermore, infrastructure investments fail to expected as part of the UN General Assembly high- account for the externalities that road traffic inci- level meeting on improving global road safety sched- dents (RTIs) impose, which can cost up to 6 per- uled to take place in July 2022 alongside the UN cent of GDP in LMICs through costs to health care, high-level political forum on sustainable development emergency response, property damage, and loss (IISD 2022). Several actors are also expanding the of output (McInerney and Smith 2020). Annually, evidence base for road safety interventions, such as more than US$800 billion is invested in roads the UN Road Safety Fund, which funds road safety around the world, on which a mere 3 percent in pilots in LMICs. Others, such as the Global Road additional investment on safety would suffice to Safety Facility (GRSF) and the Bloomberg Initiative for close the gap (see figure 1.2).2 Global Road Safety (BIGRS), are working with traffic authorities around the world to improve road safety Several important initiatives are already under- management capacity and policy, and aggregating way as part of the newly launched Global Plan insights from the growing evidence base for road for the Decade of Action 2021-2030 around coor- safety interventions, such as in the recent report dination, data generation, and public capacity Guide for Road Safety Interventions: Evidence of What strengthening. Acknowledging that efforts had Works and Does Not Work and in the creation of a new 1 SDG Target 3.6: Halve the number of global deaths and injuries from road traffic accidents; SDG Target 11.2: Provide access to safe, affordable, accessi- ble, and sustainable transport systems for all, improving road safety, notably by expanding public transport, with special attention to the needs of those in vulnerable situations, women, children, persons with disabilities and older persons. 2 Global estimate for total private and public investment complied by Oxford Economics in 2017. Additional road safety investment data generated by Global Infrastructure Hub’s “Infrastructure Outlook” database, available online: https://outlook.gihub.org/. 4 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Figure 1.2. Annual Road Safety Funding Gap vs. Global Road Investments US$872 billion 1/5)$%!##%223/ 2!&%!&&/1$!",% !##%22)",%!.$ 2423!).!",%31!.20/13 2823%-2&/1!,, )-01/5).'1/!$2!&%38 +6@/>2/8?7,/<90 ./3!",8"8%70!.$).' 04",)#31!.20/136)3( 169,+6./+>2=+8. 20%#)!,!33%.3)/.3/ 384?<3/=0<97<9+. 3(%.%%$2/&3(/2%). 54,.%1!",%2)34!3)/.2 ><+003-+--3./8>= 6/-%.#(),$1%. 0%12/.26)3( $)2!"),)3)%2!.$/,$%1 US$26 billion 0%12/.2 Global road Annual road safety investments 2020, funding need public and private Source: Global estimate for total private and public investment complied by Oxford Economics in 2017; other road safety data collected from Global Infrastructure Hub’s Infrastructure Outlook: https://outlook.gihub.org; and UN Road Safety Fund 2016. Road Safety Calculator tool to assist implementers in previously pledged to provide more than US$175 choosing appropriate interventions (Turner, Job, and million in loans and grants for transport in LMICs Mitra 2020). The Fédération Internationale de l’Au- between 2012 and 2022—has also reconfirmed its tomobile (FIA Foundation), in addition to providing commitment to road safety through the Second significant start-up funding for the UN Road Safety Decade of Action.3 However, initiatives to mobilize Fund and supporting the work of the FIA High Level private capital specifically for road safety are yet to be Panel, is investing approximately US$10 million per developed. year in Safe System interventions, primarily for road and vehicle safety design assessments and advocacy The World Bank Group (WBG) seeks to lead on (FIA Foundation 2018). mobilizing private capital for road safety—an essential piece of the puzzle that has yet to be The Multilateral Development Banks Working Group fully defined or activated. Many of the financial on Sustainable Transport (MDB WGST)—which has savings associated with improving road safety are 3 A group of ten multilateral development banks, including: African Development Bank, Asian Development Bank, CAF- Development Bank of Latin America, European Investment Bank, Inter-American Development Bank, Islamic Development Bank, and the World Bank. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 5 not enjoyed by the agent funding the intervention. In The remainder of the report is organized in four some areas, such as vehicle safety or design of road parts: Chapter 2 introduces the scale of the global cri- infrastructure for safe use, this is an archetypal exam- sis in road safety, the disproportionate burden borne ple of externalizing social and environmental costs. by LMICs, and the market failures that have led to In some cases, the costs and benefits are dispersed the prevalence of dangerous roads. Chapter 3 shows throughout the economy (such as in the insurance how sustainable finance and impact investment or health sector)—a situation that can cause a criti- alternatives can bring about the necessary realign- cal misalignment of incentives. Competition to keep ment of incentives, introducing a four-part process to costs low and maximize profits can lead to vital road direct more capital to better road safety outcomes, safety investments being sidelined. This calls for the namely by defining sustainable revenue streams, creation of financial models that reflect the true cost accessing sustainable capital, bridging viability gaps on a more holistic basis, price in costs of unsafe roads with blended finance, and securing impact through and vehicles, and realign incentives, including where technical assistance. Chapter 4 takes a deeper look appropriate, by capturing and channeling some of at how to apply these concepts at the project level, the potential financial savings from reduced RTIs putting forward eight project archetypes and five back to investors. Such opportunities exist under the potential investment structures, as well as key consid- rapidly growing sustainable debt and impact invest- erations regarding the local context, how to mitigate ment market, which several other causes under the risks, and how to build a robust results framework. SDG mandate—such as climate change and health Chapter 5 presents the steps that need to be taken by funding—have successfully leveraged to expand their private sector, public sector, and development actor pool of resources. However, the road safety agenda stakeholders to scale up sustainable finance for road has yet to engage fully with these developments. safety. In chapter 6, the report concludes by laying This WBG report examines how to bring models from out a plan for a mobilization platform that will bring the sustainable debt market and impact investment these stakeholders together and alongside a strategy market to road safety to finance interventions that for data, learning, and catalytic funding, ensure that save lives. Chiefly, this report will: (1) identify road the final decade remaining to deliver on the SDGs is safety project areas that lend themselves to private one of action. sector participation, (2) identify the potential to create revenue streams or utilize blended finance solutions to overcome barriers to investment, and (3) showcase how tools from the growing sustainable finance mar- kets can be leveraged to make road safety a viable focus for responsible and impact-conscious investors. 6 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Box 1.1. The 12 Global Road Safety Performance Targets of the United Nations Following a request by the UN General Assembly, on November 22, 2017, UN member states reached consensus on 12 global road safety performance targets, which are voluntary additions to those man- dated in the Sustainable Development Goals (SDGs). These 12 targets span the five pillars of safe sys- tems action: (1) road safety management, (2) safer roads and mobility, (3) safe vehicles, (4) safe road users, and (5) post-crash response. See figure B1.1.1 for more details. Figure B1.1.1. UN Global Road Safety Voluntary Performance Targets Source: United Nations. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 7 References FIA Foundation (Fédération Internationale de l’Automobile). 2018. “FIA Foundation UN Road Safety Trust Fund Kick-Started by FIA Foundation $10m Pledge.” April 16, 2018. Accessed April 8, 2021. https://www.fiafoundation.org/blog/2018/april/ un-road-safety-trust-fund-kick-started-by-fia-foundation-10m-pledge. Gavi (The Vaccine Alliance). 2020. “Over US$ 2 Billion Raised to Support Equitable Access to COVID Vaccines with Additional US$5 billion Needed in 2021.” Press Release, November 13, 2020. Accessed March 11, 2021. https://www.gavi.org/news/ media-room/over-us-2-billion-raised-support-equitable-access-covid-vaccines-additional-us-5. IISD (International Institute for Sustainable Development). 2022. “UN High-level Meeting on Road Safety.” SDG Knowledge Hub. Accessed October 26, 2021.http://sdg.iisd.org/events/un-high-level-meeting-on-road-safety/. McInerney, Rob, and Greg Smith. 2020. “A World Free of High-Risk Roads: The Business Case for Safer Roads.” iRAP Vaccines for Roads. Accessed March 11, 2021. https://www.vaccinesforroads.org/business-case-for-safer-roads/. Turner, Blair, Soames Job, and Sudeshna Mitra. 2020. Guide for Road Safety Interventions: Evidence of What Works and What Does Not Work. Washington, DC: World Bank. Accessed March 23, 2021. http://documents1.worldbank.org/curated/ en/206691614060311799/pdf/Guide-for-Road-Safety-Interventions-Evidence-of-What-Works-and-What-Does-Not- Work.pdf. UN (United Nations) Road Safety Fund. 2016. “Assessment of Country Road Safety Financing Needs to Achieve SDGs 3.6 & 11.2 and Related Global Grant Funding Requirements.” Internal Document. WHO (World Health Organization). 2018. Global Status Report on Road Safety 2018. Geneva: WHO. Accessed March 11, 2021. https://www.who.int/publications/i/item/9789241565684. WHO (World Health Organization).2020. “Road Traffic Injuries.” June 21, 2021. Accessed March 11, 2021. https://www.who. int/news-room/fact-sheets/detail/road-traffic-injuries. WHO (World Health Organization). 2021a. “The Global Health Observatory: Road Safety.” Accessed March 11, 2021. https://www.who.int/data/gho/data/themes/road-safety. WHO (World Health Organization). 2021b. “Decade of Action for Road Safety 2021–2030.” Accessed March 31, 2021. https://www.who.int/groups/united-nations-road-safety-collaboration/decade-of-action-for-road-safety-2021-2030. 8 MOBILITY AND TRANSPORT CONNECTIVITY SERIES 2. Road Injuries and Fatalities: The Invisible Crisis SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 9 The Far-Reaching Costs of Road Crashes The costs of a road traffic crash do not end at the and the private sector. Fatalities and serious injuries roadside but instead have a far-reaching impact (FSIs)—the human cost—are the most significant, on society and the economy. Every day, 3,700 often resulting in loss of income, increased health people die on the world’s roads, and approximately care costs, and burden on caregivers in the house- 148,000 more suffer injuries (WHO 2018). Each of hold. In addition, private and public property dam- these road traffic incidents (RTIs) has the potential age, the costs of emergency response and health to create complex and long-term implications for care, strains on the enforcement and judicial system, those affected and create ripple effects of social and and the long-term loss of productivity and income economic costs throughout society. The potential resulting from disability and fatality are just some of chain of costly events set off by an RTI are laid out the many ways road traffic crashes can inflict costs on in figure 2.1, and incur costs borne by the affected the broader society. households and communities, by the public sector, Figure 2.1. Visual Representation of the Far-Reaching Costs of Road Traffic Incidents Source: Original figure produced for this publication. 10 MOBILITY AND TRANSPORT CONNECTIVITY SERIES These costs are significant, reaching as high as Figure 2.3. Road Fatality to Injury Ratio 6 percent of gross domestic product (GDP) in low- and middle-income countries (LMICs) when the fragmented picture is brought together. It is estimated that the overall cost of RTIs to GDP in LMICs stands at US$1.7 trillion. This figure out- weighs the development assistance these countries receive, and equates to roughly 6 percent of their GDPs, compared to 1 percent to 3 percent in high-in- come countries (HICs) (McInerney and Smith 2020). A Global Road Safety Facility–Bloomberg Philanthropies Initiative for Global Road Safety (GRSF–BIGRS) analy- Source: McInerney and Smith 2020 sis that looked at potential savings in the health sec- tor alone found halving the number of traffic injuries Ultimately, it is the victims of road crashes who could equate to an additional 15 percent to 22 per- pay the highest price. Economic costs are borne cent GDP per capita income growth over 24 years in by the affected households and can result in fami- LMICs (World Bank 2017). In other words, inaction in lies becoming trapped in poverty. An estimated 12 the Decade of Action has cost LMICs a compounded million to 70 million people are kept in poverty every 2 percent to 3 percent of potential GDP per capita year because of a road traffic injury or fatality (iRAP growth. Yet, despite evidence of the size of the cost, 2016). Losing a breadwinner, losing work due to very little is invested in prevention. As shown in figure disability or recovery time, or struggling to pay high 2.2, globally, current estimates indicate only US$1 to medical costs and damages are just some of the US$3 is invested in prevention for every US$100 that ways in which the fall- road trauma costs a community (see “Road Safety out from a road crash Impact Investment: The iRAP Global Business Case can trap a household in McMahon and for Impact Investors,” published by the International poverty. For example, Dahdah (2008) Road Assessment Programme (iRAP). a study conducted in shows that for every Vietnam found that in 84 road-crash fatal- percent of households ity, victims suffer Figure 2.2. Reactive vs. Preventative Spending with a member under- approximately 10 going treatment for a additional serious traumatic brain injury injuries (see fig- due to a motorcycle ure 2.2). The World crash, treatment costs Health Organization For every US$100 represented more than (2018) shows that for that road trauma costs a society, 40 percent of the fami- 1.35 million fatalities, estimates show only US$1 to US$3 ly’s income (Hoang et al. RTIs produce 50 mil- is invested into 2008). Similarly, a study lion injuries. prevention. in Cambodia that looked Source: McMahon and Dahdah 2008. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 11 at a range of welfare indicators found household make up more than half of global road traffic deaths income fell an average of 21 percent after a member (WHO 2018). Globally, 26 percent of road deaths was involved in a traffic crash (Ericson and Kim 2011). are of pedestrians and cyclists, and passengers of Particularly in contexts where private insurance rates two- and three-wheel vehicles comprise another 28 are low or insurance is insufficient, costs deplete the percent (see figure 2.4) These rates are even higher household’s income and savings, and can become in lower-income country contexts, where there is crippling for families. Beyond the initial costs of post- greater foot traffic on roads without sidewalks, a crash care, secondary effects can also be severe, higher number of motorized two-wheelers, and less such as children having to leave school and losing infrastructure, such as bicycle paths, footbridges, future earnings potential. These effects can reinforce or underpasses, to protect vulnerable users. Africa cycles of poverty, further distancing individuals from has the highest proportion of cyclist and pedestrian paths out of poverty, such as the ability to undertake deaths, which represent a staggering 44 percent of employment and education. total road deaths. In South-East Asia and the Western Pacific, 79 percent of road deaths are passengers of These costs also carry a gendered effect. Three two- and three-wheel motorized vehicles (WHO 2018). times more men than women suffer road crash Children and young people make up 33 percent of injuries. This is driven largely by the fact that males global road deaths, and more than 60 percent of comprise a higher percentage of vehicle passengers those killed are under the age of 50 (see figure 2.5) as well as some evidence that men engage in riskier (WHO 2018). road behaviors than women (WHO 2002).1 However, when women are involved in crashes, differences in height and stature actually mean women are 28 Figure 2.4. Road Fatalities by Age in LMICs, 2019 percent to 31 percent more likely to die than males under similar crash forces (WHO 2002). Furthermore,  as shown in figure 2.3, an estimated 10 serious inju- ries occur for each death, resulting in the need for  long-term care. Given male victims are more likely   to be the lead source of income in LMIC households,    care responsibilities are mainly borne by the women '  ,$","+     in the households, who face the burden of becoming * full-time caregivers in the event a family member is #  injured in a crash (WHO 2002). However, drivers are not the only ones affected.  Vulnerable road users, such as pedestrians, are   some of the most at risk, particularly in LMICs; Source: WHO 2018. many are children and young people. Vulnerable road users (pedestrians, cyclists, and motorcyclists) 1 The study was conducted in the United States for female occupants between the ages of 20 and 35. While three out of four RTI victims are male, women are more likely to take on care responsibilities, such as becoming full-time caregivers. 12 MOBILITY AND TRANSPORT CONNECTIVITY SERIES These trends are only projected to worsen, Figure 2.5. Global Road Fatalities by User, 2018 and without action LMICs will be approach- ing 1.5 million road fatalities a year by 2030. (83./8>303/.<9+.?=/<= As previously noted, 90 percent of global road  $/./=><3+8=+8.-C-63=>= deaths occur in LMICs, despite these countries  having less than 60 percent of the vehicles (WHO  '  ,$","+ 2021). Rapid urbanization and motorization * within weak institutional frameworks has caused $#   #! ! the number of road traffic incidents in LMICs to +<9--?:+8>=  spike—a trend unlikely to slow down unless safety 'A9 +8.'29<>C:/ 8=0=280;&=;H (4B?>=B81;4 )DBC08=01;4 !??>ACD=8C84B >2DB8=6>=<40BDA01;47867 8;DC8>=B .,/$3(3(5$%(- -"( +1$341-2 $+.6, 1*$3%(- -"( +1$341-2 &??>ACD=8CH5>A1;4=343 58=0=24C><8C860C4E8018;8CH60? 8@/=>7/8>:<9036/ #8<8C43>A=> $8C860C4) 3>?C 33A4BB 33A4BB 33A4BB A0=C5D=38=6 A460A35>A) A8B:B8=>A34AC> ?A>6A4BB8E4 B>284C0; B>284C0; B>284C0; C>033A4BB ?A02C824B ?A>C42C )?A02C824B 270;;4=64BC70C 270;;4=64B 270;;4=64BC70C 270;;4=64BC70C 8=E4BC<4=C C70C<0=H 64=4A0C4 F7827<0H A4@D8A4014;>F 20==>C E0;D4 4=70=24E0;D4 2>F<0A:4C 58=0=280;A4CDA= 58=0=280;A4CDA= 58=0=280;A4CDA= 5>A8=E4BC>AB Source: Source: Adapted from Janiszewski and Taneja 2020. Note: ESG = economic, social, and governance. 32 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Blended finance is most needed where busi- as an efficient use of grant resources and could still ness models are still in their nascency, or where enable greater leverage or additional scale of out- they have a limited track record or successful comes to be achieved. The key question to ask when use cases to inspire investor confidence. There considering the need for, the form of, and amount of are helpful examples emerging for road safety that blended finance is which outcomes will be achieved could be replicated. The most successful examples (and among whom), or which barriers to achieving the of effective road safety investments are found in outcomes will be removed, by the deployment of the high-income countries (HICs), though the promising blended finance, and could these be achieved without developments can now be seen in middle-income such a subsidy or by other means. countries (MICs) as well.4 Without an established track record of investments that can be benchmarked Three types of blended finance instruments have across markets, first-mover investors could attribute been considered for road safety: (1) viability gap a higher risk weighting to road safety investments. funding (VGF), (2) guarantees, and (3) outcome This is particularly so where those investments are funding. Table 3.1 presents the range of blending in LMIC contexts where the lack of familiarity could instruments that could be used and examples of their be compounded by lack of readily accessible data to road safety application. The grant funds used in each evaluate. Blended finance has a role to play in these mechanism could come from a number of sources, contexts, incentivizing first-mover private investors including CSR funds, donor funds, government bud- and growing a catalog of successful projects. This gets, or grant activities of DFIs. Which blending mech- approach could help demonstrate the business case anism is needed primarily depends on why the project for road safety and the ability to generate returns on has not proven to be financially viable alone, and also investment. The thesis asserts the examples set by on the funders’ desired outcomes for the project. VGF these projects will provide proof of concept for more is suited to where a high certainty of a project having private-capital-funded road safety projects which, a positive social impact exists, along with a known over time, do not require the additional support. point in the future after which the project will become financially sustainable. In this case, a funder can offer Blended finance can also supplement private up-front grants (or buydowns) to cover principal investment, for example, in road infrastructure, expenditures or the costs of a loan. For example, if with technical assistance or capacity building that the development of a network of vehicle inspection strengthens other safety dimensions, such as road centers had clear revenue streams from user fees but user behavior. Blended finance could also provide would not generate enough to cover the initial cost the subsidy required to make investment economi- of constructing the centers, the government could cally viable in an LIC, for example, where it might not provide an up-front grant to cover some of the ini- be possible to raise tolls to the level needed to start tial capital required, after which the project would be generating returns or where political risk might be a commercially viable to be run privately. Guarantees, factor. In such cases, blended finance solutions serve on the other hand, are best suited when the primary 4 An example for high-income countries is the Transport Accident Commission in Victoria, Australia, that has a program of investment in safer roads. A middle-income country example is the Piracicaba-Panorama (PiPa) Lot Brownfield Project in Brazil, detailed in box 4.2, which has secured US$3.4 billion in private investment. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 33 barrier for investors is risk. For instance, if a commis- to align project partners’ incentives toward meeting sioning entity did not have sufficient credit history to those targets. A key advantage of outcome funding is prove its creditworthiness, a funder could provide a that the funders do not have to pay until the results guarantee instrument to provide a backstop in case are achieved, thereby ensuring an efficient alloca- of default, thereby making the investment viable to tion of donor funds, while allowing funders to safely investors. Outcome funding, on the other hand, suits engage in more innovative or experimental projects scenarios where a funder wishes to incentivize reach- that would not normally have been explorable with ing certain safety performance targets by offering constrained public or donor funds. investors financial rewards for meeting targets or Table 3.1. Blended Finance Instruments Instrument Description Road safety examples Viability gap Viability gap funding (VGF): A concessionaire tasked with deploying automated speed enforce- funding (VGF) Up-front grant funding to sup- ment on the highways it operates receives an up-front capital grant port interventions that are known to cover the gap between expected returns and required investment. to have high impact but are not A subnational government taps into the market to borrow funds for financially viable the development of safe pedestrian and bike paths and an interested donor provides funding that allows the scope of the intervention to be larger than would have otherwise been the case. Buydowns: Debt combined with Interest rate buydowns lower the cost of debt for the implementation grants to subsidize the cost of a of private vehicle inspection centers, an untested business model in loan a country that is just improving enforcement and with initial returns that might be too low to attract investors. Credit Guarantee to cover losses (par- A multilateral development bank (MDB) provides a credit guarantee guarantee tially or completely) in the event for a subnational government entity’s ability to repay the loan to of a borrower’s inability to contract the upgrade of a city for safe pedestrian and bike paths to repay the debt a lender. Project Guarantee to cover losses in the An MDB provides a guarantee backstopping the government’s obli- guarantee event of breach of contract obli- gations to make payments to a private partner under a road safety gations by project counterpart public-private partnership (PPP). Outcome Outcome funding: Conditional A road concessionaire receives bonus payments from donors by funding grant funding paid out to building and delivering a road project with road safety standards the implementer if and when that exceed the targets for reduction in crashes. Payments help impact-related outcomes are offset financing costs for private investors and align incentives of all achieved parties toward target outcomes. Performance-based contracts: A transport authority incorporates road safety key performance indi- Milestone- or results-based cators (KPIs) in a road concession contract and agrees to disburse renumeration for providing payment or unlock contractual benefits subject to the project’s per- goods or services over the time formance against the KPIs. horizon of a contract Source: Original table produced for this publication. 34 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Blended finance can be mobilized directly by allowing for the funding of larger projects than would DFIs financing projects using donor funds and otherwise have been possible by targeting those that structured using equity, subordinated debt, or are only viable at scale and crowding in investment risk-sharing instruments. When DFIs offer blended from other private sources. For example, for the past finance solutions, these can be used to enhance their decade, the International Finance Corporation (IFC) traditional investments, and can come together in a has been successfully leveraging concessional donor package offering. By offering concessional finance, funds, deploying US$1.6 billion of concessional donor DFIs can address some of the participation con- funds to support 266 high-impact projects in more straints within transport investments by de-risking than 50 countries. These concessional funds have returns through guarantees, first-loss structures, or leveraged US$5.8 billion in IFC financing and more the subordination of loans or equity. They can also than US$6.8 billion from other private sources (IFC address misaligned incentives by using concessional discusses this in detail online). The IDA Private Sector loan pricing or performance incentives to align objec- Window (IDA PSW), detailed in box 3.3, is another tives toward the development mandate. Using these example of the World Bank Group (WBG) using inno- innovative methods can also provide the benefit of vative methods to catalyze private sector investments. Box 3.3. IDA Private Sector Window In its efforts to catalyze private sector investment in some of the most in-need economies, the World Bank Group (WBG), through the International Development Association (IDA), the International Finance Corporation, and the Multinational Investment Guarantee Agency (MIGA), set up a US$2.5 bil- lion PSW in 2018, which has been replenished at the same funding level for subsequent years (World Bank 2018).a The aim of the window is to facilitate greater private sector investment in IDA-only coun- tries—these countries are defined by having a gross national income (GNI) per capita below an estab- lished threshold, which for 2021 is below US$1,185 per capita. The IDA PSW was founded under the recognition that achieving the SDGs is not possible without greater involvement from the private sector, and that uncertainties and risks—be they real or per- ceived—are an impediment to high-impact private sector investment in low-income countries (LICs). The IDA PSW aims to address this challenge. The window does not fund private investment on its own, but through four different facilities either backstops or blends IFC investments or MIGA guarantees to support private sector investments (see the IDA discussion of its PSW online). The four facilities are: 1. Local currency facility to provide long-term local currency IFC investments in IDA countries where capital markets are not developed and market solutions are not sufficiently available. 2. Blended finance facility to blend PSW support with pioneering IFC investments across sectors with high development impact, including small and medium enterprises (SMEs), agribusiness, health, education, affordable housing, infrastructure, climate change mitigation and adaptation, among others. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 35 3. Risk mitigation facility to provide project-based guarantees without sovereign indemnity to crowd in private investment in large infrastructure projects. 4. MIGA guarantee facility to expand coverage through shared first loss and risk participation via MIGA reinsurance. The IDA PSW is intended to be used when there is no alternative commercial solution and the WBG’s other tools and approaches are insufficient, thereby only using concessional funds when they are most needed. The IDA PSW allows the WBG to expand efforts in countries where it has already engaged in policy work and provided robust support for private sector investment—this support has exceeded US$100 billion for IDA countries in the past decade. Source: World Bank analysis. Note: a. The International Finance Corporation (IFC) is the largest global development institution focused on the private sector in developing countries, providing and mobilizing scarce capital, knowledge, and partnerships that can help address critical constraints to private sector development. The Multilateral Investment Guarantee Agency (MIGA) promotes foreign direct investment (FDI) in developing countries to help support economic growth, reduce poverty, and improve people’s lives. Health donors are well positioned to support investments in LMICs by offering private partners blended finance initiatives, and the global health debt swaps, outcome funding, and results-based sector is growing its experience in engaging in financing opportunities (see the Global Fund’s discus- blended finance. To date, the health sector has sion of innovative finance). The reproductive, mater- accounted for approximately 6 percent of global nal, and child health space is also a health area where blended finance transactions, but, as health deals are private capital mobilization through blended finance often significant in size, this represents 19 percent is gaining traction, with eight large deals alone mobi- of total funds raised (Convergence discusses these lizing approximately US$560 million in investment for market trends on their website). In the wake of the women and children’s health (Bery 2019). COVID-19 pandemic, more health care actors are seeking transactions and will gain experience in how As road safety is a global health crisis, it, too, to leverage blended finance to expand their health should be able to leverage the opportunity of impact.5 Development actors and governments have health donors as blended finance funders. Health also been able to use this growing blended finance is one of the sectors that carries a major cost bur- market for health to channel funds toward certain den from the effects of road trauma and yet an priority areas. For example, the Global Fund, a part- estimated less than 1 percent of health official devel- nership platform with the goal of mobilizing funds opment assistance (ODA) is directed toward trauma to fight HIV/AIDS, tuberculosis, and malaria, has care (Stewart et al. 2019). Annually, almost twice as leveraged large pools of private capital for health much aid is directed toward health than transport 5 Future growth in the blended finance market is also predicted, with Convergence stating that in 2021, 19 percent of transactions currently seeking blended capital are in health care. See the online discussion of market trends on the Convergence website: https://www.convergence.finance/blend- ed-finance/2020#market-trends. 36 MOBILITY AND TRANSPORT CONNECTIVITY SERIES (US$22.4 billion and US$11.9 billion respectively in outcome funding can be thought of conceptually 2019).6 Significant health benefits could be achieved as the health sector sharing the financial savings it if even just a very small proportion of the health makes from reduced road traumas with other actors, funding were redirected to sit alongside transport including private investors, who are investing in RTI investment to fund behavioral interventions for safer prevention. For example, the case study in box 3.4 road use, or to fund additional interventions such as presents how a helmet-wearing campaign by the trauma care where RTIs do occur. Blended finance Asia Injury Prevention Foundation (AIPF), if structured structures can also support outcomes-based models as an impact bond, could generate a positive bene- such as development impact bonds where prece- fit-cost ratio (BCR) for outcome funders based on the dent has been set for health funders to act as out- reduction in costs associated with head traumas, and come funders (Convergence 2020). For road safety, could thereby support a case for investment. Box 3.4. Mobilizing Health Funding Toward Prevention—an Investment Case from Cambodia An investment case study prepared by the International Road Assessment Programme (iRAP), the Fédération Internationale de l’Automobile (FIA Foundation), and the Asia Injury Prevention Foundation (AIPF) in Cambodia investigated the savings and impact that could be generated for an impact bond toward increased helmet wearing in Cambodia (Davies et al. 2016). Motorcyclists account for 73 per- cent of road deaths in Cambodia, with low levels of helmet wearing playing a major role in this figure (Open Development Cambodia 2014). For example, in 2014, when AIPF started its campaign work, 80 percent of motorcycle drivers were not wearing a helmet at the time of a crash, and 69 percent of those involved in a crash suffered head injuries. Children are also one of the main victims, with 99 per- cent of children killed in motorcycle crashes not wearing a helmet (ITF 2018). Between 2014 and 2016, AIPF ran an innovative, multi-stakeholder behavior change campaign called “Head Safe. Helmet On” that held the ambitious aim of increasing helmet wearing from 10 percent to 60 percent across six target districts. Using the data gathered from this campaign, the FIA Foundation and iRAP modeled an alternative impact bond structure for the intervention. In this scenario, AIPF would implement the program with the support of social investors who would take on the risk of the project, and outcome funders (such as the government) who would pay investors based on the achievement of outcomes. This structure is shown in figure B3.4.1. 6 Global Health (database), Donor Tracker (accessed September 23, 2021), https://donortracker.org/sector/global-health; Detailed Aid Statistics: Official Bilateral Commitments by Sector (database), OECD, (accessed September 28, 2021), https://doi.org/10.1787/data-00073-en. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 37 Figure B3.4.1. Impact Bond Structure for a Helmet-Wearing Campaign -,1/!1+"# 0#"-,/-"  0$#16-21!-+#0 21!-+#$2,"#/0#% %-3#/,+#,1-/ -!'*',3#01-/0 21!-+#$2,"#/.6',3#01-/0 $-/-21!-+#0!&'#3#" +./-3#"0$#16  ,3#01+#,1 -21!-+#0 0',(2/6 /#"2!#0/'0)$-/ ',!/#0#', /#3#,1'-, 0#/3'!#./-3'"#/0 &#*+#120#," -2,"1'-, /#"2!1'-,-$&#" ',(2/'#0 #/3'!#./-3'"#/ '+.*#+#,10',1#/3#,1'-, #*+#1 4#/',% !+.'%, Source: FIA Foundation and iRAP. The two-year campaign cost US$1.1 million to implement. AIPF calculated that if the 60 percent helmet-wearing target was met, US$1.4 million lifetime costs could be avoided in administration, damages, loss of output, and medical costs associated with head traumas from motorcycle crashes. Therefore, the government—or another outcome funder invested in these social savings—by paying only on the condition that certain outcome thresholds were achieved could receive a net benefit by paying for outcomes. This investment case revealed a 4 percent internal rate of return (IRR) before any broader social and economic costs were considered and is projected to save 14 casualties and 260 serious head injuries over three years. Read more on the potential of impact bonds for road safety in chapter 4. Source: World Bank analysis. 38 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Facilitating Sustainable Impact through Technical Assistance Technical assistance is vital to setting up and activities such as strengthening road safety regula- maintaining private capital mobilization in a tion, building public and private capacity for moni- way that can be sustainable and impactful in the toring and evaluation (M&E), supporting the design long run. Beyond the activities for raising funds, it is of effective road safety interventions, and facilitating essential that financiers also ensure their investments innovative investment structures. Overall, it is only are supported by the necessary technical assistance. with the adequate technical assistance to secure the This is particularly important in LMIC contexts, where social impact and sustainability of road safety invest- there likely remains work to be done in creating the ments that it will become possible to demonstrate foundational enabling environment for private invest- feasibility and grow the pool of interested investors ment in road safety. Technical assistance can come at and potential use cases, thereby transforming road many levels to address some of the key barriers faced safety into a sustainable investment area that lasts in LMICs (as shown in figure 3.6) and can include into the longer term. Figure 3.6. Technical Assistance to Support Low- and Middle-Income Countries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ource: Original figure produced for this publication. Note: KPIs = key performance indicators; M&E = monitoring and evaluation. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 39 At the highest level is the need for institutional economic analysis, site investigation and road audits, capacity building, which aims to create an social and environmental assessments, human-cen- enabling environment through advocating for tered design to address aspects of safe design and and supporting the necessary regulatory and user interaction, and requisite legal and regulatory market shifts to facilitate road safety invest- analysis. Next is the project preparation phase, where ment. Weak regulation and lack of enforcement are project design, which can include public-private major barriers for road safety in several LMICs. Not partnership (PPP) structuring in case of PPP, and only does this disincentivize safety-conscious prac- the accompanying investment plans and appraisals tices, but it can even prevent private actors from are developed. Road safety experts, who are trained being able to make some of the safety improvements in international best practices and have an expert they would like to make. For example, with weak understanding of the local context and challenges, enforcement, a speed management system cannot should be engaged throughout these stages to be guaranteed to generate a steady revenue from ensure baseline safety assessments are conducted fines. Lack of national-level data and oversight are and the developed intervention and contract design also significant barriers, as without road safety audits will work in the local context. As the catalog of suc- for major road networks or crash data management cessful, privately funded road safety projects in LMICs systems the task of scoping out key areas to target grows, it is hoped that these designs will become with investment becomes more challenging—as does replicable and easy to follow for other implementers the task of measuring outcomes. As championed by in new locations. the Global Road Safety Facility (GRSF), a facility hosted at the WBG focused on building public road safety M&E and learning are cornerstones of effective capacity in LMICs, working closely with governments social investment, and an area likely to require and local authorities to build the institutional capac- technical assistance. When financing becomes ity needed to address the challenges in the policy tied to social outcomes, M&E capacity immediately environment, regulatory frameworks, and enforce- becomes a prerequisite to investment. M&E frame- ment capacity is a vital step to ensuring safety can be works at the project level are considered further in improved and sustained over the longer term (see chapter 4. However, at the base level, many LMIC the discussion in the section titled, “Public Authorities stakeholders do not currently have the capacity to to Create the Necessary Enabling Environment” in accurately and transparently monitor and report on chapter 5). road safety outcomes. A lack of detailed data on RTIs in many LMICs is a serious barrier in the road safety At the program and project design stage, techni- space. If there is no crash management database cal assistance can ensure that road safety inter- in place, RTI data is likely to be fragmented across ventions are designed with strongest chances for private concessionaires’ records, police systems, success. This begins with a prefeasibility analysis, insurance data, and health records, and in some setting out the preliminary work of prioritizing invest- LMICs might not be digitally recorded or systemat- ments and ensuring the necessary legal, regulatory, ically aggregated. In addition, severe underreport- and institutional environment is in place. Depending ing of RTIs means data collected is unlikely to be on the project, this can include a technical and complete—underreporting of road crash fatalities 40 MOBILITY AND TRANSPORT CONNECTIVITY SERIES is estimated to be as high as 84 percent in LICs and Technical assistance can support financing 51 percent in MICs (World Bank 2019). Lack of trans- through sustainability coordination and trans- parency and trust in the reporting system can be a action design. Private capital mobilization for road serious barrier to implementing investment struc- safety is likely to engage several public and private tures where stakeholders’ financial returns are tied to actors unfamiliar with sustainable debt instrument KPIs. For example, without a crash investigation unit design and setup, and so will need support in coor- that is trusted to categorize the cause and conse- dinating the transactions and enabling cooperation quences of an RTI, stakeholders are unlikely to agree between actors. This can be facilitated by MDBs, DFIs, to their returns being tied to outcomes that could or other financial institutions with experience in sus- potentially be disputed later. Technical assistance tainability coordination. Sustainability coordination and the support of independent evaluators is, there- involves the development of a sustainability frame- fore, critical for addressing these issues. Although the work and of associated KPIs, as well as the engage- M&E capacity could be low to start with, long-term ment of independent evaluators who play a key role technical assistance can grow capacity over time and in ensuring compliance, quality, and transparency thereby build greater confidence in the data gener- across stakeholders. In the transaction design phase, ated. To this end, M&E activities should go beyond projects may also need support to identify and project-level engagement and contribute to building engage prospective investors and raise financing. robust national and global evidence bases, including Where blended finance is to be included, additional support to national and global efforts for improving tailored assistance will also be needed to support this data quality and availability on road safety. Alongside transaction. As the approaches to investment that M&E, technical assistance also has an important role improve road safety develop, the experiences of the to play in helping learning programs that support first few road safety transactions will pave the way curation, codification, and dissemination of knowl- for future projects. The following chapter will take a edge and learning for road safety projects. Effective, deeper look at how to operationalize the investment accessible learning resources will lower knowledge in road safety, putting forward eight high-impact and barriers and can facilitate a knowledge community investable road safety project archetypes as well as between established road safety actors and critical investment structures that suit a wide range of pri- new entrants who will need to be engaged. vate to public borrowing entities and investors. 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Accessed March 21, 2021. https://www.santander.com/en/press-room/news/scib-finances-accionas-first-esg-rating-linked-loan-in-chile. Selmoune, Aya, Qixiu Cheng, Lumeng Wang, and Zhiyuan Liu. 2020. “Influencing Factors in Congestion Pricing Acceptability: A Literature Review.” Journal of Advanced Transportation 2020 (4242964). Accessed October 5, 2021. https://doi.org/10.1155/2020/4242964. Stewart, Barclay, Sara Hollis, Stas Salerno Amato, Eileen Bulger, Charles Mock, and Teri Reynolds. 2019. “Trauma Care and Development Assistance: Opportunities to Reduce the Burden of Injury and Strengthen Health Systems.” Bulletin of the World Health Organization 97 (5): 371–373. Accessed September 23, 2021. http://dx.doi.org/10.2471/BLT.18.213074. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 43 World Bank. 2018. “Operationalizing the IDA18 IFC-MIGA Private Sector Window.” Accessed March 15, 2021. https://documents.worldbank.org/en/publication/documents-reports/documentdetail/928011520447801610/ operationalizing-the-ida18-ifc-miga-private-sector-window. World Bank. 2019. Guide for Road Safety Opportunities and Challenges: Low- and Middle-Income Countries Country Profiles. Washington, DC: World Bank. Accessed March 11, 2021. http://documents1.worldbank.org/curated/ en/447031581489115544/pdf/Guide-for-Road-Safety-Opportunities-and-Challenges-Low-and-Middle-Income-Country- Profiles.pdf. Zietlow. Gunter. 2006. The Road Safety Cent: Management and Financing of Road Safety in Low-Income Countries. Eschborn, Germany: GTZ. Accessed March 13, 2021. http://www.zietlow.com/gtz/GTZ-RoadSafetyCent0107.pdf. 4. Structuring Investable Road Safety Projects SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 45 Building on the insights of the previous chapter, to save lives. Next, the chapter addresses some of chapter 4 looks at how to bring together the four the key country and local context considerations parts involved in structuring road safety projects with regard to public and private sector readiness. (see figure 3.2, in chapter 3): monetizable revenue Possible investment structures are then presented streams (figure 3.3 in chapter 3 presents a range of in five categories, which can be chosen and adapted potential revenue streams for road safety), access to to suit the project archetype, the mix of borrowers, capital from the sustainable finance market, blended lenders and implementers, the available funding finance opportunities, and technical assistance. First, sources, and the constraints of the country context. the chapter presents eight high-impact road safety The chapter concludes with the consideration of the intervention project archetypes that have been iden- key elements of a robust results framework, as well tified as having both the strong potential for private as potential ethical, financial, and execution risks and investment, as well as strong evidence of their impact appropriate mitigation strategies. High-Potential Road Safety Project Archetypes Attracting private investment in road safety sector participation. From a detailed review of more requires a clear investment case. Only certain types than 100 road safety interventions, eight project of road safety interventions will be suitable for pri- archetypes emerged as best suited for private sector vate sector investment, and it is important that the engagement and also offer measurable and cost-ef- investment product and structure is fit for purpose. In fective potential to reduce RTIs. The eight areas, and general, it must be possible to create links to reve- their potential for impact, are presented in figure 4.1. nue streams or forward commitments through which Road safety is a complex ecosystem—driver behav- investments can be repaid, build value in an equity ior, road conditions, vulnerable users, commercial model, or attract funding in an outcomes-based vehicles, enforcement, and emergency response all financing model.1 For example, helmet wearing is play a part in the risk of road traffic incidents (RTIs), critical to reducing fatalities and serious injuries and there is growing evidence of which countermea- but is not an intervention that can develop revenue sures are the most effective. For example, the recent streams, although local manufacture and distribution World Bank report, Guide for Road Safety Interventions: of affordable quality helmets may be a commercially Evidence of What Works and What Does Not, has made viable business model and behavior change and important progress in bringing together the grow- enforcement may support an outcomes-based model. ing evidence base of which interventions offer the highest impact, and notes that interventions are best Research by the World Bank Group (WBG) has chosen from across the different pillars of road safety identified eight examples of high-impact road (Turner, Job, and Mitra 2020). The eight identified safety projects with strong potential for private project archetypes covered in this report span many 1 A range of potential revenue streams for road safety are presented in Figure 3.3 in the previous chapter. 46 MOBILITY AND TRANSPORT CONNECTIVITY SERIES different parts of this ecosystem. They include post- The first six interventions focus on prevention of RTIs crash care (emergency medical services, regional and span the safe systems pillars of “safer vehicles” network of trauma centers), traffic violation enforce- and “safer roads,” whereas the final two focus on ment (speed management and enforcement), vehi- mitigation, aiming to reduce fatal and serious injuries cle quality (vehicle inspection and certification), road (FSIs) after the incident through the road safety pillar safety infrastructure (upgrades of road safety infra- of “post-crash response.” A review of the methodol- structure and standards for new and existing con- ogy used to select these eight project archetypes is cessions, infrastructure to protect vulnerable users), included in appendix B. and commercial vehicles (commercial fleet upgrades). Figure 4.1. Eight Project Archetypes with Strong Potential for Private Sector Involvement Sources: Revenue streams: World Bank Group and Dalberg Advisors analysis; Schulz and Scheier 2020; Peden et al. 2004; Vaccines for Roads (https://www. vaccinesforroads.org/irap-big-data-tool/); Turner, Job, and Mitra 2020; WHO 2017; WHO 2019; Mehmood et al. 2018; World Bank 2017. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 47 Country and Local Context Considerations When considering the local context in which to As low- and middle-income countries (LMICs) can implement these projects, there are two key differ significantly from one another in both pri- dimensions to assess: public sector maturity and vate and public sector readiness, assessment of ease of private sector participation. These dimen- these factors is an important step in determining sions effectively speak to the ease or difficulty of which solutions and investment structures will transacting in the local context. As transport infra- suit the given country context. Figure 4.2 provides structure is typically within the public sector’s man- an illustration of a matrix format that can be used to date, road safety investments are more likely to be analyze this issue. In Quadrant IV, both private sector feasible and successful in the long term when sup- and public sector capacity are too weak to accommo- ported by an enabling public sector environment, date road safety investments. In Quadrants II and III, even where the investment itself is private sector led. technical assistance to create maturity in the private Furthermore, without certain baseline private sector and public sectors, respectively, could be used to move capabilities being present in the ecosystem, this type the readiness of the local context toward Quadrant of approach is less likely to be successful unless led I—where the necessary enabling public and private by a major donor or multilateral agency. sector environments exist. Appendix E includes a map- ping of 10 LMICs from across the income spectrum using this method, illustrating the insights that can be gained from this high-level analysis. Figure 4.2. High-Level Analysis of Context Potential for Private Investments for Road Safety "91=);-:-+;798)9;1+18);17687;-6;1)4  *"!&2*-,1"+1&) /".2&/"0  %&$%-,1"+1&)#,/-/&31" -2)& 0" 1,/ - &162&)!&+$ &+3"01*"+1 J >D=CA84B0;A403H70E40BCA>=6 J *74A48B4E834=24>5?A8E0C4 4E834=2410B45>ABD224BB5D; B42C>A?0AC828?0C8>=8=A>03 '''B0=3?>BB4BB1>C70 '''B7>F4E4A8CB?D1;82 34E4;>?43?A8E0C4B42C>AF7827 20?028CH8=A>03B054CH 20=144=606438=A>03B054CH A4<08=BD=34A34E4;>?43 0BF4;;0B0?D1;82B42C>AF8C7 A>03B054CH20?028CH  ),4-,1"+1&)  *"!&2*-,1"+1&)  /".2&/"0-2)& )"!*,!")0 J *74A48B=>4E834=24>5 '''B0=3E4AH;8<8C43 20?028CH>A2><<8C<4=C J (4;0C8E4;H;4BB4A4E834=24>5 C>F0A3A>03B054CH8=C74 '''B7>F4E4AC74A48B0 ?D1;82>A?A8E0C4B42C>A BCA>=6?D1;8220?028CHF7827 DAC74A<>A4C74A4<0H14 ;4=3BF4;;C>C740??;820C8>=>5 B86=85820=CA46D;0C>AH 45542C8E4A>03B054CH 2>=BCA08=CBC>?A8E0C420?8C0; 8=C4AE4=C8>=B 0224BB8=6C74<0A:4C "<*41+$-+;79#-),16-:: Source: Original figure produced for this publication. 48 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Public sector maturity can be assessed by four The potential for private sector participation can key indicators: the presence of a road safety be assessed by examining a country’s track record agency, dedicated road safety funding, regula- on public-private partnerships (PPPs) in road tions in line with global standards, and enforce- infrastructure and other sectors, as well as other ment capacity. The lack of a public agency with a key indicators on the ease of doing business. At a specific road safety mandate and strategy or without high level, a number of tools can be used to explore dedicated road safety funds may indicate road safety the ease of private sector participation within a coun- is a lower priority for the government. Additionally, if try, such as the Country PPP Readiness Diagnostic adopted road safety standards are low, which can be Tool provided by the World Bank, as well as research determined by looking at national legislation versus into the country’s past experience with PPPs in infra- the globally accepted best practices on road safety, structure, health, or transport (World Bank 2016). road safety may be deemed too low a priority within Other indicators to understand the appeal for private the public agenda to receive support. Enforcement is investment in a country can also include corruption also a key issue, and the World Health Organization perception indices and ease of doing business rank- (WHO) collects self-reported ratings of the quality ings that assess a country’s regulatory performance of road safety enforcement across countries, which (Transparency International 2020; World Bank 2019a). can act as a useful indicator (WHO 2018). For cer- These factors will affect how interested private inves- tain investments, low public prioritization and weak tors will be in engaging with investment opportuni- enforcement might also mean that private actors will ties in the country, and where private investors per- be unable to secure revenue streams for their road ceive the risk of engaging in the context as too high, safety investments. Analyzing this environment will mitigation strategies that target the root causes of either reveal that private capital mobilization for road the risk need to be applied. Types of risk and possible safety is not yet viable or will highlight which areas mitigation strategies are explored further at the end can be supported by public sector capacity building of this chapter. to create the necessary enabling environment. More on the work that should be conducted by and with public authorities is laid out in chapter 5. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 49 Investment Structures for Road Safety Specific investment structures can be designed revenue streams that can be engaged, and the road to bring in a mix of investors, borrowers, and safety projects that are most suitable. Furthermore, funders appropriate to the context and project. all models can, where necessary, be supported by the Figure 4.3 provides an overarching illustration of the optional addition of blended finance, where funders primary actors involved in investment structures for can support the financial viability of the project to road safety. There are three primary actors—inves- help align incentives around road safety outcomes. tors, borrowers, and funders—who are supported Throughout all possible arrangements, independent by independent evaluators. In addition to this core evaluators will be crucial to supporting coordination mix, additional technical assistance and monitoring and compliance by assessing baselines and verifying and evaluation (M&E) partners may be brought on if targets have been met and whether the terms of board. These actors will come together in different social or sustainability-linked debt have been ful- permutations—that is, investment structures, or filled. This section presents five variations of possible models—in order to serve the context-specific needs investment structures that have been designed to of the road safety market in question. The possible showcase the range of possibilities across the pri- investment structures vary according to private or vate-public spectrum and meet the needs of the eight public borrower, the type of debt used, the type of project archetypes across a range of contexts. -+96)  Figure 4.3. Primary Actors in Investment for Road Safety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ource: Original figure produced for this publication. MODEL A: SOCIAL AND SUSTAINABILITY-LINKED FINANCINGS AND OTHER DEBT INSTRUMENTS Debt markets have been very active in recent years, The capacity of these actors to raise capital at scale, not least to respond to the financing needs related which could then be directed to road safety initia- to COVID-19. The availability and cost of capital have tives, is worthy of exploration. Model A1 (figure 4.5) remained relatively favorable. There are clear oppor- explores the potential for national and multilateral tunities for multilateral agencies, national govern- bond programs; Model A2 considers application of ments (treasuries), as well as supranational and sub- a bond model at a subnational level, where prime national bodies to capitalize on the appetite for more responsibility for the road or safety-related invest- socially responsible and sustainable debt to access ment sits in some jurisdictions. these markets to fund road safety initiatives. 52 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Figure 4.5. Model A1: Sovereign and Multilateral Bond issuances Model A1 considers Sustainable Development Goal (SDG)-linked bond programs at the national and supranational levels or those issued by multilateral entities. This gives governments or other bodies access to private capital markets for large social programs that could target road safety directly or within a broader SDG. Source: Original figure produced for this publication. Private markets have responded positively to bond The year 2020 was notable not only for growth in issues by national governments (treasuries) and socially focused bond issuances, but also for mid- supranationals that have tackled social issues, with dle-income countries (MICs) accessing these markets. the few examples of issuances being oversubscribed. The example of Mexico’s SDG bond framework set For example, the initial European Commission out in box 4.1 provides a clear example for where social bond issuance under its program for tempo- road safety projects could be incorporated within a rary support to mitigate unemployment risks in an national spending program or where bonds could be emergency (SURE) (€10 billion 10-year and €7 billion issued for purposes including road safety as a con- 20-year at seven-year bond priced at a negative yield tribution to meeting national commitments to mea- of −0.497 percent) issued in late 2020 was more than sures that help meet SDG targets. 13 times oversubscribed (European Commission 2020). The program can raise up to €100 billion that will be made available to member states to address negative economic and social consequences of the COVID-19 pandemic in their countries (the European Commission discusses the SURE program on its website). SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 53 Box 4.1. Issuance of a Sovereign SDG Bond to Global Capital Markets In September 2020, Mexico issued a sovereign level €750 million seven-year use-of-proceeds SDG Bond in partnership with the United Nations Development Program (UNDP), BNP Paribas, Credit Agricole CIB, and Natixis. A second issuance of a €1.25 billion 15-year use-of-proceeds bond followed in July 2021. This bond program is the first of its kind to link government policy and a sovereign bond framework to SDGs, specifically directing the capital to projects and programs for vulnerable populations. The initial bond issuance was more than six times oversubscribed; 154 global investors participated enabling Mexico to tap investors committed to financing sustainable development—46 percent of the issuance was allocated to environmental, social, and governance (ESG)-focused investment portfolios (UNDP in Latin America and the Caribbean 2021; Reuters 2020; White 2020). The bond issuance leveraged the Mexican government’s work to link its 2021 federal budget to the SDGs. The bond’s framework maps to social and environmental targets for 11 of the SDGs.a The areas targeted are broad enough to make road safety programs eligible for funds particularly under SDGs 3, 7, 9, and 11, indicating an opportunity for collaboration between the road safety com- munity and sovereign bond issuers to direct funding to road safety projects. Source: World Bank analysis. Note: a. Abiding by the Social Bond Principles and Green Bond Principles developed by the International Capital Markets Association (ICMA). This approach by Mexico illustrates the opportunity track record of partnership with the private sector and appetite for sustainability and SDG-linked debt driving growth in green and sustainable markets and products and signal to an opportunity to fund road innovation to mobilize capital for sustainable devel- safety, an objective directly linked to SDGs, using sim- opment, including taking an active leadership role in ilar instruments. catalyzing the green bond market and spearheading disclosure and impact reporting standards for green Multilateral actors can also utilize their role in private and other sustainable assets to demonstrate the debt markets for broader goals linked to sustainabil- potential for SDG-aligned finance. Figure 4.6 high- ity objectives. The World Bank Treasury has a long lights some examples. 54 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Figure 4.6. Examples of World Bank Engaging with Investors on the Sustainable Development Goals Source: World Bank analysis. The International Finance Corporation (IFC) and The capacity of these sovereign and multilateral other multilateral agencies have also played a role actors to raise capital at scale that could then be in demonstrating the efficacy of social and sustain- directed to road safety initiatives nationally, region- ability-linked instruments. For example, in response ally, or across a global program, for example, to to COVID-19, the IFC issued social bonds to support upgrade roads across different country settings health supply chains in LMICs and rebuilding jobs taking a portfolio approach, is worthy of further and local business. Its benchmark US$1 billion social exploration. bond when the pandemic was declared attracted more than US$3.4 billion in private investor interest, despite market uncertainty. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 55 Figure 4.7. Model A2: Financing to a Subnational Entity Model A2 enables a subnational entity, such as a municipality, to issue debt in the form of a social or sustainability-linked loan or bond to improve road safety. Where required and available, donors can participate as outcome funders, or provide viability gap funding to the subnational entity to increase the financial viability of the investment and strengthen the borrower’s incentives to achive road safety targets. Source: Original figure produced for this publication. In Model A2 (see figure 4.7), subnational entities automated traffic management systems), infrastruc- can raise private financing for road safety in areas ture upgrades to protect vulnerable uses (footpaths where direct investment is necessary, but which goes and bike lanes, for example), and trauma care. These beyond what they could access through national gov- projects also lend themselves to being scaled up at ernment funding or a sovereign-backed loan from the regional level if they are proven to be effective. a multilateral, and, therefore, is likely to require the raising of additional revenues to make the issuance There are many benefits to structuring investments creditworthy. In this sense, subnational entities can through subnational entities. Firstly, several sub- expand their total resources by unlocking private sec- national entities—such as a local municipality or a tor investment. road traffic agency—may have already conducted assessments of road safety in their districts and have While subnational borrowings represented nearly clear projects to undertake but suffer from a lack of half of public debt markets for high-income countries funding. By leveraging the sustainable debt market, (HICs) (49.1 percent), they only represent 7.3 percent subnational entities can take on loans to fund these for low-income countries (LICs) as of 2019 (Smoke projects—which may even be at a lower price, such as 2019). This model is better suited to middle-income in the case of a sustainability-linked debt that offers countries, where there are subnational entities with pricing incentives in exchange for achieving road the sufficient capacity to borrow and to implement safety commitments, or, if blended finance mecha- projects. This model is also well suited to road safety nisms are used, to support the investment. Model A2 interventions where private sector management will work best where the subnational entity (whether may be challenging or inappropriate (for example, if a state or municipal government) has fiscal authority the road safety element is acting as a public good). to raise debt, when there has already been a priori- It is also well suited for projects that are challenging tization of road safety within the public agenda, and to monetize directly through the intervention, yet sustainability-targeted financing can further align have high potential for impact, as the subnational incentives to ensure efficient and effective delivery. entity can repay the financing through revenues However, to avoid risk of over leveraging public enti- that are generated more widely, such as through a ties, the creditworthiness of the subnational entity fuel tax ring-fenced for safety interventions within a and whether there is sufficient fiscal space to take on road fund. Projects well suited for Model A2 include further borrowing need to be considered. speed management and enforcement (such as, 6;.;06;4A<.@B/;.A6<;.92;A6AF ',,!',% 2 ,1'-,* 56 #,"#/0 ,1'16  ./-3'"#/ MOBILITY AND TRANSPORT CONNECTIVITY SERIES      -++'00'-,     /,1 2"'1 -"0$#16 ,"#.#,"#,1 -,-/ ./-(#!10 3*21-/ MODEL B: FINANCING A NEW PPP         Figure 4.8. Model B: Financing a New Public-Private Partnership   6;.;06;4.;2D&&& ',,!',% -++'00'-, #,"#/0 In Model B, new concessions with relevant 2 *'! -,!#00'-,'/# 21&-/'16 road safety components can receive /,1 additional financing to incorporate road safety  116A6<;.912/A3 /.#%22)/. ).)2318/& 3/-/3)5+&%. %%   0/.2/ 1!.20/13 /,$).'9  1 .&1!2314#341%     /.)3/1 !8&%%2  .20%#3)/. %()#,% 9 9 -0,%-%.3 1/'1!- /6.%12    (!1'% 1/5)$% ).20%#3)/. 21),1$1&,$/  $%,!8&%%2 )/2:6 9 9 9 ,1$1&,$/)/2:6 Source: Original figure produced for this publication The results of the program have been impressive, with several targets having been exceeded. There are currently 189 fixed stations and 81 mobile stations equipped with advanced facilities and technol- ogies supported by an integrated IT system, real-time data processing, and data storage. To operate the vehicle inspection network, TÜVTÜRK has trained and managed a network of 47 business partners in 81 provinces. Overall, this has also had a strong positive contribution to FSI reduction, with deaths in traffic crashes having decreased by 40 percent since the program launch (Schulz and Scheler 2020). The case study demonstrates how adapting a well-proven model to a new country context can reduce implementation risks and support local capacity building to maximize program effectiveness—an area that was facilitated by a combination of international expertise and local entities engaged in the proj- ect. Furthermore, the innovative financing structure allowed incentives of public entities and commer- cial enterprises to be aligned within the PPP arrangement to maximize efficiency and outcomes of the new system. Source: World Bank analysis. 58 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Box 4.3. A Public-Private Partnership in a Middle-Income Country with Financial Incentives for Road Safety Piracicaba-Panorama (PiPa) Lot Case Study With the aim of improving national road safety, the Piracicaba-Panorama (PiPa) lot was one of the first lots recommissioned to new concessionaires that included a performance-based penalty scheme and clear targets for road safety. Under a wider initiative set out by the International Finance Corporation (IFC), Brazil’s National Bank for Economic and Social Development (BNDES), and the Inter-American Development Bank (IDB), a competitive tender for the PiPa toll road was commissioned by the São Paulo State Government and won by a consortium of institutional investors - Patria Investments- and the Government of Singapore Investment Corp. (GIC). The 30-year concession contract incorporated a clear road safety investment plan estimated to save approximately 34,000 fatalities and serious injuries through a US$3.4 billion investment in road upgrades that would bring routes up to the standard of the International Road Assessment Programme’s (iRAP’s) three-star rating or higher. The concession contract also stipulated financial penalties based on whether planned targets were met. From these penalties, the IFC supported the public traffic authority Agência de Transporte do Estado de São Paulo (ARTESP) to design an innova- tive bonus scheme whereby the concessionaire could receive a road safety performance bonus paid out in the form of a deduction from the performance penalties it owed to the granting authority if it met certain road safety targets developed by ARTESP. Figure B4.3.1. PiPa Lot Investment Structure Target achieved / Set of goals Premium 110%-120% 0.50% 121%-130% 1.00% 131%-140% 1.75% >140% 2.75% Premium is a percentage reduction in payment deductions resulting from performance penalties and authorized according to the achievement of road safety targets The success of commissioning the PiPa contract demonstrates the ability for road safety to be effi- ciently negotiated into new concession contracts in LMIC contexts—as per Model B proposed in this paper. The contract effectively realigns the concessionaire’s commercial incentives with investing in road safety. The case study also showcases how effective technical assistance (such as that provided by iRAP and IFC) can enhance the business models that are designed and implemented. Source: International Finance Corporation (https://www.ifc.org). SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 59 MODEL C: ADDITIONAL DEBT FOR AN EXISTING PPP Figure 4.9. Model C: Additional Debt for an Existing Public-Private Partnership  116A6<;.912/A3942CB 'A>942C )C0=30A3B ?8?4;8=4 =>AF;4364 30C0 ;40A=8=6 4E834=24 Source: Original figure produced for this publication. 96 MOBILITY AND TRANSPORT CONNECTIVITY SERIES The World Bank intends to launch such a mobi- returns that are then phased out as track records and lization platform, designed to crowd in actors market terms are established and subsidy is no lon- from public, private, and nongovernmental (NGO) ger needed to attract investment. In this way, it can sectors; demonstrate impact for investors, road facilitate the virtuous cycle outlined in figure 6.1. users, and other beneficiaries; and build the evi- dence base, tools, and know-how. As development Providing for a structured blended finance capac- finance institutions (DFIs) and multilateral develop- ity will leverage the unique position of DFIs and ment banks (MDBs) have the ability to crowd in other MDBs to provide concessional funding and donors actors to invest in road safety by providing catalytic and aid agencies to provide grants more effec- financing for projects, they are key participants in tively toward changing road safety norms and this strategy. Their participation will also ensure the outcomes. Concessional funding and grants will also effectiveness of the platform to set standards for and help de-risk private investments, especially where the support road safety projects at the regional, national, investment cases are still being generated through or subnational levels. Involvement of multilaterals proof of concept. The blended finance facility, and the will connect projects to the platform and provide the role the platform can play in navigating access to con- leverage to ensure data and evidence is collected that cessional funding and grants, will act as core levers informs knowledge sharing, drives decision-making for the platform, enabling the provision of finance and commissioning, and attracts further investment. and technical support to be linked to good safe sys- To set this in motion, DFIs and multilaterals, in collab- tem standards and to the creation of data and evi- oration with the World Bank, should come together dence that will support future investments. To build to establish consensus on the platform and seek user momentum, DFIs and MDBs should come together to input on the design. design and launch an early blended finance window to stimulate demand. Access to blended finance through the platform will drive participation and create incentives Mechanisms adopted by the platform to encour- to adopt standards for good road safety invest- age standardization in data collection and report- ment. By providing access to blended finance and ing will help develop a richer evidence base to technical support, the platform will be able to crowd build investment cases. To be actionable, data must in new projects delivering road safety interventions, be robust, accessible, and from trusted sources. To new actors that are seeking access to finance for be most effective, this effort will build on the avail- road safety projects, and new investors for whom the able data to inform work with existing and prospec- blending of private finance with concessional capital, tive road safety actors on data convergence and where needed, will provide them with the returns a more standardized data framework designed to they are expecting. Blended finance can be struc- support investment, and be accessible to priority tured with the specific objective of attracting new users of the platform. In the early stages, the plat- entrants and early adopters, by providing de-risking form will consolidate the already extensive data mechanisms or supporting advantageous financial on road safety, for example the International Road SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 97 Assessment Programme’s (iRAP’s) Vaccine for Roads A focus on trusted, robust, open-access, and “Big Data Tool”. In addition to this and other existing actionable information, case studies, and tool- data initiatives that focus on road safety, the plat- kits will enable and encourage market actors to form’s data architecture could also benefit from the leverage the platform for their own transactions. work undertaken by the Impact Management Project Over time, resources can be tailored to the needs that identifies key dimensions of impact and data of different user groups and will provide both high- categories.1 A robust approach to standardization of level navigation guides that can aid new entrants, as data frameworks will help national and subnational well as detailed, accessible technical materials that authorities commission road safety projects and set support project design and embed high-quality road appropriate standards and key performance indi- safety standards and incentives into projects as well cators (KPIs), will aid investors in carrying out due as the design of investment structures and tender- diligence on prospective investments, and support ing processes. Outreach to market actors to facilitate the design of outcomes-based transactions. Work development of the learning and convening role of should commence to bring together market actors the platform to ensure it is trusted, valued, and used to develop an actionable plan for data and reporting, will be critical. recognizing the differing requirements of established and new entrants, as well as the need to assure that Early transactions that embed these principles data is trusted, validated, and accessible. and demonstrate efficacy are a critical first step. From there, design and functionality of the platform To drive additional investment to road safety, can evolve over time. Extensive consultation and test- the platform will need to support learning and ing with funders and market actors will be necessary convening functions. This will require attention to ensure that the purpose, goals, and core functions to channels of engagement and how the platform are clear, aligned with existing sectoral initiatives, is positioned to work alongside existing initiatives and meet the needs of its target users. Figure 6.2 out- that support learning and knowledge-sharing, for lines initial steps following a user research approach example, the Global Road Safety Partnership, global to achieving a fit-for-purpose platform that addresses Transport Knowledge Practice (gTKP), Regional Road these principles and the market gaps. The phased Safety Observatories (RRSOs), and the Global Alliance approach places initial focus on design and incorpo- of NGOs for Road Safety. There is also an important ration of an early blended finance window to support convening role where the community of road safety projects that incorporate the required road safety actors share their knowledge and experience, and in standards and data principles. These early transac- turn start to reorient road safety investments from tions are imperative to catalyze the market. Data and those based on common sense to those based on evi- learning from the projects will enrich the platform dence, learning, and best practice. as it moves to a build out phase and, eventually, to become a sustained part of market architecture. 1 See more at Impact Management Project’s website: https://impactmanagementproject.com/. 98 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Figure 6.2. Initial Steps to Mobilizing the Platform Source: Original figure produced for this publication. A platform anchored in the wider ecosystem can investor platform for Sustainable Development Goal play a vital role in attracting more and different (SDG)-related investment, as well as investor-led ini- actors and driving scale. This includes collaborating tiatives, including the International Capital Markets with sectoral platforms and initiatives, such as the Association (ICMA) and the growing number of Global Infrastructure Hub and Global Infrastructure forums for investors seeking to drive more sustain- Facility, infrastructure and public-private partner- able outcomes. This will help position road safety ship (PPP) sectors, the Organisation for Economic investment in the sustainable finance markets and Co-operation and Development (OECD) Development support actionable progress toward meeting SDG tar- Assistance Committee (DAC) and Convergence for gets and the goals set by the international commu- blended finance transactions, SDG Impact and its nity to at least halve global road deaths by 2030. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 99 7. Appendices SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 101 Appendix A. Mapping Road Safety to the SDGs Figure A.1. Mapping Across the Eight High-Impact Project Archetypes Source: Original figure produced for this publication. Note: This table is not exhaustive and the suggested SDG target links are not applicable to all projects under each archetype. Illustrative mapping of road safety to 27 of the 169 SDG targets The mapping shown in figure A.1 and table A.1 is not exhaustive and is only for illustrative purposes. It is sug- gested that for any road safety project, a consideration of all 169 indicators should be taken into account to see all the areas where SDGs can be targeted. This selection of 27 of the SDG targets aims to illustrate to the reader some of the more likely areas for SDG linkages to occur in road safety projects. Part of this mapping taken from the following publication: Monclús, Jesús. 2020. Road Safety and the SDGs: A Guide for Private Sector Organizations. Madrid, Spain: Fundación MAPFRE. https://noticias.mapfre.com/ media/2020/01/Road-Safety-and-the-SDGs.pdf. 102 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Table A.1. Mapping of Road Safety to SDG Targets SDG Target SDG Indicator Road Safety Relation 1.4 By 2030, ensure that all men and 1.4.1 Proportion of population Transport and mobility are considered “basic services” women, in particular the poor and the living in households with access by the United Nations, meaning road-related projects vulnerable, have equal rights to eco- to basic services that also expand access to transport contribute to nomic resources, as well as access to 1.4.1 basic services, ownership, and control over land and other forms of property, inheritance, natural resources, appro- priate new technology, and financial services, including microfinance 1.5 By 2030, build the resilience of the 1.5.1 Number of deaths, missing Road safety is often defined as a preventable global poor and those in vulnerable situations persons, and directly affected disaster. Road traffic injuries disproportionately and reduce their exposure and vulnera- persons attributed to disasters affect vulnerable groups of road users, including the bility to climate-related extreme events per 100,000 population poor who represent more frequently vulnerable road and other economic, social, and envi- users. Those affected by road crashes often bring the ronmental shocks and disasters only income to the families who are often thrown into poverty as a consequence. 1.5.2 Direct economic loss Road safety is a global disaster that has significant attributed to disasters in rela- economic costs, which can be as high as 6% of GDP tion to global gross domestic in LMICs. product (GDP) 3.2 By 2030, end preventable deaths of 3.2.1 Under 5 mortality rate Road fatalities still represent the main cause of death newborns and children under 5 years of from childhood and youth age groups between 5 and age, with all countries aiming to reduce 29 years. Every four minutes a child is prematurely neonatal mortality to at least as low lost on the roads of this world: more than 500 chil- as 12 per 1,000 live births and under 5 dren every day. mortality to at least as low as 25 per 1,000 live births 3.6 By 2020, halve the number of global 3.6.1 Death rate due to road Road safety directly targets this SDG target by lower- deaths and injuries from road traffic traffic injuries ing traffic injuries and fatalities. accidents 3.8 Achieve universal health coverage, 3.8.1 Coverage of essential Emergency medical care is an essential health service. including financial risk protection, health services Road safety interventions that expand emergency access to quality essential health care service provision or trauma care also expand essen- services, and access to safe, effective, tial health provision. quality, and affordable essential medi- cines and vaccines for all 3.9.d Strengthen the capacity of all 3.d.1 International Health Improvements in post-crash response to road victims countries, in particular developing Regulations (IHR) capac- can increase survival rates and reduce long-term countries, for early warning, risk reduc- ity and health emergency consequences. tion, and management of national and preparedness global health risks 5.5 Ensure women’s full and effective 5.5.2 Proportion of women in Programs can be designed to ensure that women participation and equal opportunities managerial positions are included in managerial positions for road safety for leadership at all levels of deci- projects. sion-making in political, economic, and public life SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 103 SDG Target SDG Indicator Road Safety Relation 7.2 By 2030, increase substantially the 7.2.1 Renewable energy In upgrading fleets to be safer, there could also be share of renewable energy in the global share in the total final energy an increase in the percentage of vehicles that are energy mix consumption electric. 8.8 Protect labor rights and promote 8.8.1 Fatal and non-fatal occu- Safe labor conditions for road workers, including pro- safe and secure work environments for pational injuries per 100,000 fessional drivers in developing countries, are a part of all workers, including migrant work- workers, by sex and migrant road safety. This could include the upgrade of com- ers, in particular women migrants, and status mercial fleets, construction of rest stops, tighter laws those in precarious employment for commercial drivers, and protective infrastructure and vehicles to safeguard road workers. 9.1 Develop quality, reliable, sustain- 9.1.1 Proportion of the rural Road improvements may also expand access to rural able, and resilient infrastructure, population who live within 2 km populations. For example, this could be the case for a including regional and transborder of an all-season road new road concession. infrastructure, to support economic 9.1.2 Passenger and freight vol- Road improvements may also impact passenger and development and human well-being umes, by mode of transport freight volumes in LMICs. with a focus on affordable and equita- ble access for all 9.4 By 2030, upgrade infrastructure and 9.4.1 CO2 emissions per unit of Safety improvements for vehicle fleets can also make retrofit industries to make them sus- value added a move toward a higher percentage of fuel-efficient tainable, with increased resource-use vehicles. efficiency and greater adoption of clean and environmentally sound technolo- gies and industrial processes, with all countries taking action in accordance with their respective capabilities 9.a Facilitate sustainable and resilient 9.a.1 Total official international Safer roads can also be built to be more resilient infrastructure development in devel- support (official development (such as to natural disasters and climate change). oping countries through enhanced assistance plus other official Furthermore, if development assistance is used, the financial, technological, and technical flows) to infrastructure project can contribute to targets on expanding inter- support to African countries, least-de- national support for resilient infrastructure in LMICs. veloped countries, landlocked develop- ing countries, and small island develop- ing states 10.6 Ensure enhanced representation 10.6.1 Proportion of members Engaging LMIC stakeholders in legislation, projects, and voice for developing countries in and voting rights of develop- and private capital mobilization for road safety will decision-making in global international ing countries in international help to deliver more long-term and sustainable economic and financial institutions organizations solutions. in order to deliver more effective, credible, accountable, and legitimate institutions 11.2 By 2030, provide access to safe, 11.2.1 Proportion of population Safer roads can make public transport more accessi- affordable, accessible, and sustainable that has convenient access to ble, and public transport itself can be a target of road transport systems for all, improving public transport, by sex, age, safety interventions. road safety, notably by expanding and persons with disabilities public transport, with special attention to the needs of those in vulnerable sit- uations, women, children, persons with disabilities, and older persons 104 MOBILITY AND TRANSPORT CONNECTIVITY SERIES SDG Target SDG Indicator Road Safety Relation 11.5 By 2030, significantly reduce the 11.5.1 Number of deaths, Road safety is often defined as a preventable global number of deaths and the number missing persons, and directly disaster and also disproportionately affects the most of people affected and substantially affected persons attributed vulnerable communities. Road death reduction can, decrease the direct economic losses to disasters per 100,000 therefore, be seen as contributing to reducing deaths relative to global GDP caused by disas- population from disasters in countries where road deaths are ters, including water-related disasters, very high. with a focus on protecting the poor and 11.5.2 Direct economic loss in As shown in this report, road traffic injuries (RTIs) people in vulnerable situations relation to global GDP, damage cause significant economic costs, resulting in part to critical infrastructure, and from damage to infrastructure and disruption to number of disruptions to basic basic services. Therefore, reducing the disasters services attributed to disasters caused by road crashes can curtail economic losses. 11.6 By 2030, reduce the adverse per 11.6.2 Annual mean levels of Fleet upgrades that move toward greener vehicles capita environmental impact of cities, fine particulate matter (e.g., can also reduce city-level pollution, as can road safety including by paying special attention PM2.5 and PM10) in cities (pop- upgrades that encourage activities such as cycling or to air quality and municipal and other ulation weighted) using public transport. waste management 11.7 By 2030, provide universal access 11.7.1 Average share of the Road safety can contribute to the accessibility, inclu- to safe, inclusive, and accessible, green, built up area of cities that is sivity, and safety of key areas, with safety around and public spaces, in particular for open space for public use for school zones being a particular example. In particular, women and children, older persons, all, by sex, age, and persons vulnerable road users can be made safer within cities. and persons with disabilities with disabilities 11.b By 2020, substantially increase the 11.b.1 Number of countries that Road casualties are commonly defined by the road number of cities and human settle- adopt and implement national safety community as a global disaster. Therefore, ments adopting and implementing disaster risk reduction strat- the number of cities adopting safe and sustainable integrated policies and plans toward egies in line with the Sendai (road) transport policies and plans and the number of inclusion, resource efficiency, mitiga- Framework for Disaster Risk countries with safe and sustainable (road) transport tion and adaptation to climate change, Reduction 2015–2030 policies and plans contributes to holistic disaster risk and resilience to disasters, and develop management targets. and implement, in line with the Sendai 11.b.2 Proportion of local Framework for Disaster Risk Reduction governments that adopt and 2015–2030, holistic disaster risk man- implement local disaster risk agement at all levels reduction strategies in line with national disaster risk reduction strategies 12.2 By 2030, achieve the sustainable 12.2.1 Material footprint, mate- Moving toward more fuel-efficient fleets and planning management and efficient use of natu- rial footprint per capita, and to minimize footprint in road safety infrastructure ral resources material footprint per GDP projects can contribute to lower material footprints. 12.5 By 2030, substantially reduce 12.5.1 National recycling rate, Projects can consider how to minimize their waste waste generation through prevention, tons of material recycled production, particularly in large-scale infrastructure reduction, recycling, and reuse projects. 12.6 Encourage companies, especially 12.6.1 Number of companies As part of the road safety investments, monitoring large and transnational companies, to publishing sustainability reports and evaluation (M&E) is key, and the impact on wider adopt sustainable practices and to inte- society should be published. grate sustainability information into their reporting cycle SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 105 SDG Target SDG Indicator Road Safety Relation 12.7 Promote public procurement 12.7.1 Degree of sustainable The role of the public sector is crucial to show the practices that are sustainable, in public procurement policies and way ahead. Public contracting authorities can award accordance with national policies and action plan implementation contracts to organizations showing commitment and priorities good practices in road safety. Include additional safety provisions in road transport infrastructures projects, including public transport tenders, and public (and private) procurement of only safe vehicles. 16.1 Significantly reduce all forms 16.1.4 Proportion of population Roads can also be dangerous in terms of violence, of violence and related death rates that feels safe walking alone and road safety projects may also take this into everywhere around the area they live account. For example, street lighting could increase safety by making communities feel safer walking the roads at night. 16.5 Substantially reduce corruption 16.5.1 Proportion of persons Road safety interventions will always require strat- and bribery in all their forms who had at least one contact egies for improved enforcement. For example, an with a public official and who automated speed enforcement system will make it paid a bribe to a public official, easier for authorities to reliably capture and enforce or were asked for a bribe by speeding violations, limiting the room for corruption. those public officials, during the Projects can also entail working closely with the police previous 12 months and other enforcing bodies to improve standards. 16.5.2 Proportion of businesses that had at least one contact with a public official and that paid a bribe to a public official, or were asked for a bribe by those public officials during the previous 12 months 16.6 Develop effective, accountable, 16.6.1 Primary government Transparent and efficient use of transport public bud- and transparent institutions at all expenditures as a proportion gets can be encouraged. levels of original approved budget, by sector (or by budget codes or similar) 16.8 Broaden and strengthen the par- 16.8.1 Proportion of members Participation of developing countries in international ticipation of developing countries in and voting rights of develop- road safety fora and decision-making bodies with the institutions of global governance ing countries in international impact on the condition of the road safety system organizations 17.1 Strengthen domestic resource 17.1.1 Total government reve- As road safety has a significant impact on GDP in mobilization, including through inter- nue as a proportion of GDP, by LMICs, plans to reduce these costs can have a positive national support to developing coun- source impact on government revenue, as can business tries, to improve domestic capacity for models that generate new revenue streams for public tax and other revenue collection road safety budgets. Source: Monclús, Jesús. 2020. Road Safety and the SDGs: A Guide for Private Sector Organizations. Madrid, Spain: Fundación MAPFRE https://noticias.mapfre. com/media/2020/01/Road-Safety-and-the-SDGs.pdf. 106 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Appendix B. Methodology for Selecting the Eight Road Safety Project Archetypes The investigation into the project archetypes was based on a comprehensive framework for road safety mapped across the United Nations’ National Road Safety System Pillars, as presented below, from which an analysis and prioritization of the different countermeasures was conducted. Figure B.1. National Road Safety System Pillars Source: Original figure produced for this publication, based on the United Nations’ National Road Safety System Pillars. Analyzing available evidence on the impact of differ- • PIARC Road Safety Manuals: https://roadsafety. ent interventions on road traffic incident (RTI) reduc- piarc.org/en tion and fatal and serious injury (FSI) prevention from: • Global Road Safety Facility (GRSF)-Bloomberg • The iRAP Road Safety Toolkit: http://www.toolkit. Initiative for Global Road Safety (BIGRS) and World irap.org/ Bank reports: https://www.roadsafetyfacility.org/ publications/high-toll-traffic-injuries-unaccept- • European Union’s (EU’s) SafetyCube: https://www. able-and-preventable safetycube-project.eu • World Health Organization (WHO) reports on Synthesizing from a list of more than 100 road safety road safety: https://www.who.int/westernpacific/ countermeasures across the road safety framework, health-topics/road-safety these were grouped into 19 implementable project archetypes, as per the table below. • Centers for Disease Control and Prevention (CDC) Road Safety Calculator: https://www.cdc.gov/trans- portationsafety/calculator/index.html SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 107 Table B.1. Synthesis of Implementable Project Archetypes 8>/<@/8>398/=318+>398= $/= $<91<+7     ,4782;4B054CHA46D;0C8>=B0=324AC85820C8>=0608=BCBC0=30A3B   $  ,4782;4<8=86A00334B86=0=3DA10=5>A<<09>A '& $  (>0334B86=0=3DA10=5>A<<8=>A '& $  'A>C42C8E48=5A0BCAD2CDA4 '& $  )?4432>=CA>;8=5A0BCAD2CDA4B?443;8<8CBCA0558220;<8=6CA05582>1BCAD2C8>=B     $  82H2;4'*-0=3?434BCA80=?0C7BC>B4?0A0C4C74<5A><>C74A<>C>A8I43CA05582     $  *A055822>=CA>;0=39D=2C8>=BB86=BB86=0;B<0A:8=6B34E824BDB43C>A46D;0C4F0A=>A6D834CA05582    $$  !=>5?A4 7>B?8C0;20A4>= B8C4C>CA0=B?>AC     $  !E8=6C74;4E4;>5CA08=8=6>5<43820;?4AB>==4;C><0=0645>A02DC4CA0D<020B4   $$  8ABC083CA08=8=6>51HBC0=34AB3A8E4AB0=3?>;824<0=C>38<8=8B7<>AC0;8CH0=330<064B4A8>DB=4BB   '&  4E4;>?<4=C0=3A468>=0;8I0C8>=>54<4A64=2HCA40C<4=C0=3CA0D<024=C4AB     $$  )054CH8=BC8CDC8>=B 24=CA0;064=284BA4B40A27 '& $ $  $>C>AE4782;48=BDA0=24B274<4B   '&  #0FBA46D;0C8=6A>03DB4A1470E8>ABD270BDB4>574;<4CBB40C14;CB24;;?7>=44C2 '& $ $ $$$$  =5>A24<4=C2C8>=BC0:4=C>4=BDA42>=   $ $ $$$$  )0=2C8>=B0=3?4=0;C84BB0<40=B>54=5>A24<4=C5>A>14384=24>5A>03B054CH;0FB0=3A46D;0C8>=B   '&  A8E4ACA08=8=60=3;824=B8=6    '& (>03DB4A43D20C8>=0F0A4=4BB1D8;38=60=3?D1;8220C40270??A>?A80C4B:8;;B>5 &'&  () $ Source: Original table produced for this publication. Based on the available evidence of each interven- framework as displayed in figure B.2. Quadrant I (top tion on RTI and FSI reduction from the sources listed left, in light gray) identifies high-impact interven- above, the impact of each project archetype was eval- tions with potential for private sector participation uated from one to five, one being low and five being to be mapped to potential business models, while high. Each project was also analyzed for the poten- Quadrant II (top right, in light blue) identifies inter- tial degree of private sector involvement, consider- ventions related to legislation and human behav- ing whether private actors could take on the role of ior as prerequisite interventions, such as enforce- investor, borrower, or implementer for each of the ment, to be mapped to the relevant interventions in interventions, and whether there were significant Quadrant I. Quadrant III (bottom right, in blue) iden- barriers to private sector participation. The result- tifies interventions with impact potential considered ing evaluation was mapped against the road safety too low to be taken further. 108 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Figure B.2. Review of Road Safety Interventions Analysed According to Their Measured Impact and Potential for Private #-=1->7.97),:).-;?16;-9=-6;176:)6)4?:-,*):-,76;0-195-):<9-,158)+;)6,87;-6;1)4.79891=);- Sector Participation :-+;798)9;1+18);176     !  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SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 109 Appendix C. Investment Structures Illustrative mapping of road safety project archetypes to the business models As explored in each of these investment structures, some models are better suited to certain project arche- types than others. For example, Model D suits interventions that can be private sector led, whereas Model A suits interventions traditionally in the public domain, and that may be acting as a public good. The above illustrates some examples of project archetypes where these models could be suitable. The remainder of this chapter will go on to lay out other primary concerns in applying countermeasures and investment structures, namely monitoring and evaluation (M&E) frameworks, and risk and mitigation strategies. Figure C.1. Illustrative Mapping of Road Safety Project Archetypes to Selected Business Models %9+.=+0/>C:<94/-> !9./6  6;.;06;4A<.@B/;.A6<;.92;A6AF & +2560926;@=20A6<;.;1 02?A6360.A6<;      &6;.;06;4;2D&&&@  & <::2?06.93922AB=4?.12       116A6<;.912/AA<2E6@A6;4&&&@ & $2D?<.10<;02@@6<;@D6A5 ?<.1@.32AF?2>B6?2:2;A@       A=?=0;8I0C8>=>5@=206.96@A      A?.B:.02;A2?@ Source: Original figure produced for this publication. Note: Models A1 and A2 are both included within model A. Models E1, E2, and E3 are each included within Model E. 110 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Model A: Social and Sustainability Bonds and Other Debt Instruments Note: a. The lender could also serve as the TA provider, for example, in the case of the WBG; b. Could include state-owned enterprises (SOEs). The following four graphics cover both Model A1 and Model A2, as applicable. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 111 Note: a. National development bank. b. 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ote: a. National development bank. b. Actors in blue = World Bank Group entities. 118 MOBILITY AND TRANSPORT CONNECTIVITY SERIES  #"$,-',1%6/)8'328)<87%6)137879-8%&0)*363()0  # #!  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CSR-related initiatives will be most suitable for sustainability-linked financing, that is, non-restricted use-of-proceeds for general corporate purposes with road safety outcomes linked to SDGs.  #"$,-',1%6/)8'328)<87%6)137879-8%&0)*363()0  # #!  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"<0.90<;A2EA@D52?2  )52;221303B054CH8B834=C858430B0=02DC4270;;4=648=C742>D=CAH0=3  <;53>=>ABC70C0A402C8E4F8C7C74C0A64CA468>=0=3F8;;8=6C>?0AC828?0C40B>DC2><45D=34AB ,5.A3.0A942CC744=C8CHB7>D;370E420?028CHC>2>=CA02C8C0=3<08=C08=BCA>=6>E4AB867C .A.C.69./696AF C.69./92/.@296;21.A. )D558284=C30C08B0E08;01;4C>34C4A<8=4010B4;8=40=334E4;>?0??A>?A80C4C0A64CB0=3<>=8C>A?A>6A4BBC>F0A3BC74C0A64CB #2.@B?./92>;B>ABHBC4<40BDA40=3CA02::4H>DC2><4BA4@D8A43C>B42DA4>DC2><45D=38=6 0<@F@A2: :=92:2;A2?0.=.06AF E08;018;8CH>520?01;4B4AE8240=3C427=>;>6H?A>E834ABF8;;8=6C>F>A:8=C74C0A64CA468>= ,5.A.?2A52=?<4?.: @=206360=?2 ?2>B6@6A2@=2?A.6;6;4A<#<129 & #( :=92:2;A2?0.=.06AF E08;018;8CH>5F8;;8=60=320?01;4C427=>;>6H?A>E834AB>A2>=CA02C>ABC>8?4A0C48=C4AE4=C8>=B & )?.B:.0.?202;A2?@ :=92:2;A2?0.=.06AF E08;018;8CH>5F8;;8=60=320?01;4C427=>;>6H?A>E834AB>A2>=CA02C>ABC>8?4A0C48=C4AE4=C8>=B SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 125 Appendix D. Results Framework Illustration for All Eight Project Archetypes Figure D.1 provides an illustration of the results framework that can be considered for each of the eight proj- ect archetypes (P1 to P8) highlighted in this report. This figure is purely for illustrative purposes, showing some of the types of outcomes and associated outputs that can be considered at the input, intermediate, and final outcome levels. Figure D.1. Illustration of a Results Framework Aligned with SDGs ().?42A  0=3().?42A  7:+-> (43D243=D<14A>550C0;8C84BB4A8>DB8=9DA84B) B &?2C2;A6<; #6A64.A6<; ') ?.A2?21B0A6<; ?21B0A6<;6;A?.B:. 38+6 (43D2C8>=8=(* B1H;4E4;>5B4E4A8CH ?29.A21:-97/= (43D2C8>=8=(* B1HCH?4>52>;;8B8>= <36;7B?F 9?>:?>= (43D2C8>=8=(* B1H;>20C8>=8 4 L1;02:B?>CBM (43D2C8>=8=(* B1HCH?41H8=E>;E43DB4A4 6 8=E>;E8=6ED;=4A01;4DB4A8=E>;E8=62><<4A280;5;44C (43D2C8>=8=(* B1H20DB44 6 3D4C>E4782;4508;DA43D4C>B?4438=6 4=34A38B066A460C4330C0  2)  (+,&/(  2)52$'1(7:25.,     2)  (63216(  1(75$80$ 8>/< &(17(56 )$,/85(5$7( 67$525%(77(5 5('8&7,21,1 52$'0((76 7,0(2) &(17(5 7/.3+>/ &203/$,17 5('8&('%<  2)52$'$66(66('86,1* $9(5$*( , 67$5 72&5$6+6,7( $&&(66,%/( 9?>-97/= :,7+  , 63((' 25%(77(5)25 0867127 :,7+,1 .0    )/((7  (3/$&(0(172)'$0$*('  2) 3('(675,$16 (;&(('  )520$1< 9?>:?>=  2) &203/<,1* ,1)5$6758&785(:,7+,1'$<62) 9,2/$7256  $9(0(17 0,187(6,1 /2&$7,21 5(*,67(5(' :,7+ 5(3257,1* ,668('),1(6 &21',7,21 85%$1$5($6 9(+,&/(6 5$7,1*6  2) ,1'(;,6$7 $1'! ,163(&7,21 &$0(5$6  5266:$/. 0,187(6,1 0$,17$,1(' (9(5< .0 585$/$5($6  1(:),;('  1(:52$'  1(:6$)(7<,1)5$6758&785(6%8,/7  1(:  1(:  80%(52)  80%(52) $1' 1(: :257+< (* 0(',$16 &5$6+ 63((' 3('(675,$1 $0%8/$1&(6 75$80$ 8:?>= 02%,/( 9(+,&/(6 %$55,(56 0$1$*(0( &5266,1*6 $1' &(17(56%8,/7 &(17(56%8,/7 %28*+7  %/$&.63276:,7+,19(670(17 17&$0(5$6  :$/.:$<6 9(+,&/(6,1 $1' 3/$16 23(5$7,21$/, 5(3$,5(' 23(5$7,21 (48,33(' =('   (#  !# !  $8/:),-;     $!%  #  $$ $ () % .7:!# %%  #) !-/176)41B)<176  '% (% !# %%' &% % '&#  7.$!$% #%%  &!# #"&#%$ #$%#&%&#  #% # &$#$ $#'$ %#&%#$  Source: Original figure produced for this publication.  126 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Appendix E. Country Analysis for 10 Select Low- and Middle-Income Countries Considering the country contexts for which road 4. Corruption perception index safety projects could be applied, an analysis of 10 low- and middle-income countries (LMICs) was con- 5. Level of countries’ investment in infrastructure ducted across the low-income to upper-middle-in- 6. Public-private partnership (PPP) readiness within come countries range. These countries were analyzed the public sector along two primary dimensions: (1) private sector participation potential and (2) public sector readiness. 7. Countries’ experience with infrastructure PPPs To determine this, the following key metrics were analyzed: 8. Countries’ experience with road PPPs 1. The presence of road safety agency regulations A summary of the final synthesis resulting from this for road safety analysis is shown in figure E.1, where those in the top right quadrant have both the necessary public sec- 2. The World Health Organization (WHO) enforce- tor readiness as well as potential for private sector ment rating of regulations investment. 3. Data availability and capacity Figure E.1. Public Sector Readiness and Private Sector Participation Potential for 10 Countries $<3@+>/&/->9<$+<>3-3:+>398$9>/8>3+6  *"!&2*-,1"+1&) /".2&/"0  %&$%-,1"+1&)#,/-/&31" J 9697,3++8.<+D3670E478674A J !/B3-970B78674E834=24>5 -2)& 0" 1,/ - &162&)!&+$ &+3"01*"+1 8=2><4?>?D;0C8>=B<0:8=610=:01;4 9697,3+ ?A8E0C4B42C>A?0AC828?0C8>=8= 1DB8=4BB<>34;B0=370E4C74A45>A4 A>03'''B7>F4E4A8CB?D1;82  !/B3-9 B44=7867?A8E0C4B42C>A?0AC828?0C8>= 20?028CH8=A>03B054CH8B 8=A>03'''B D=34A34E4;>?43A424=C;H  <+D36 J 8.3+70BB86=85820=C4E834=24>5 B7>F8=6<><4=CD<0C0 BD224BB5D;A>03''' =0C8>=0;;4E4;  8.3+ J &/8/1+670BB44=B4E4A0; 8=5A0BCAD2CDA4'''B4E834=28=6  &/8/1+6 A4;0C8E4<0CDA8CH  ),4-,1"+1&)  *"!&2*-,1"+1&)   "31/<3+ /".2&/"0-2)& )"!*,!")0 J 3,/<3+!9D+7,3;?/+8. >239:3+3>=>C70E44E834=24>5 A>03'''B0=370E4;8<8C43?D1;82 J %A+8.+70BA4;0C8E4;H;4BB4A 4E834=24>5'''B1DC8CBBCA>=6 <><4=CD<0A>D=30A>03B054CH !9D+7,3;?/ %A+8.+ ?D1;8220?028CH;4=3BF4;;C>C74 J -78;4 "31/<3+70B703B><4 0??;820C8>=>545542C8E4A>03B054CH 8=5A0BCAD2CDA4'''B8CB;>F?D1;82 >239:3+ 8=C4AE4=C8>=B A>03B054CH20?028CH0=32>=24A=B 0A>D=32>AAD?C8>=<0:48CA4;0C8E4;H 3,/<3+ ;4BB0CCA02C8E45>A8=E4BC>AB (!  !      118$/ 6 $?,63-&/->9<%/+.38/== Source: Own Original figure produced for this publication. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 127 Cross-country comparisons in a matrix for- burdens that could be considered for International mat: The matrix serves to assist high-level analysis Development Association (IDA) financing despite between countries on the two dimensions of public lower credit ratings. Liberia and Mozambique do not sector readiness and private sector participation. In have high enough potential for private participa- Quadrant IV, both private sector and public sector tion, and with high corruption perceptions and debt capacity are too weak for road safety investments. burden, they may only be suited for official develop- In Quadrants III and IV, technical assistance to create ment assistance (ODA) or donor-funded road safety maturity in the private and public sectors could be interventions. used to move the local context toward Quadrant I— where the necessary public and private sector readi- Regulatory frameworks, enforcement, ness exist. and causes of RTIs Further analysis of the key drivers of road traffic Private sector participation: Brazil, Colombia, and incidents (RTIs) found that poor road infrastructure, India have strong track records in public-private part- poor vehicle condition, and poor road user behavior nerships (PPPs), and though Mexico has seen several (in part due to weak enforcement) were major chal- road PPPs, it also has had several hiccups around lenges across countries. failed PPPs. Ethiopia, Rwanda, and Senegal could be likely candidates for new road concessions or road As illustrated in figure E.2, seven out of 10 countries safety PPPs given potential pipeline opportunities. have implemented all or almost all key road safety However, lower incomes entail they may require donor regulations (according to the WHO’s Global Status subsidization for road safety investments. Nigeria does Report on Road Safety 2018). not have sufficient evidence for successful PPPs in the road sector and high corruption perceptions, making However, according to the same source, most have only potential road safety PPPs suitable. insufficient enforcement scores, especially Ethiopia and India. Liberia and Rwanda are both missing three Public sector readiness: Colombia and India also key regulations; however, Rwanda has high enforce- see strong potential in direct investments to gov- ment while Liberia has very poor enforcement. Mexico ernments given their credit ratings and relative is missing several key regulations according to the debt sustainability. Brazil’s lower sovereign credit 2018 report. However, Mexico has notably seen some rating and Mexico’s corruption perception make momentum to improve its safety. Other key public them less attractive for public investment. Senegal challenges in the country set include lack of coordina- and Rwanda have lower corruption and debt tion and capacity, and lack of earmarked funding. 128 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Figure E.2. Regulatory Framework and Enforcement Ratings for 10 Countries Source: WHO 2018. Analysis of the underlying top causes of RTIs at the condition and speeding. These then pointed to road country level was also conducted, as illustrated in safety interventions such as vehicle inspections and figure E.3. All 10 countries have low road quality automated speed enforcement technologies. The standards, resulting in fatal and serious injuries (FSIs) remaining risk factors causing FSIs on roads are best that can be addressed through road upgrades with addressed by incorporating effective driver education appropriate safety standards incorporated. The two and awareness and behavior change campaigns. leading issues were found to be around poor vehicle Figure E.3. Top Causes of Road FSIs Across 10 Countries Source: WHO 2018. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 129 Looking deeper into the available International Road arising in the bottom right quadrant are of the high- Assessment Programme (iRAP) data (publicly avail- est concern as they represent a high percentage of able at the iRAP big data tool: https://www.vaccines- deaths, and the road infrastructure is unsafe for them. forroads.org/irap-big-data-tool/), a dissection of which types of infrastructure treatments are most Using this, it becomes apparent all countries in the needed was possible. iRAP also provide a free to use data set appear to have road infrastructure that is iRAP demonstrator (https://www.irap.org/project/ more developed for four-wheelers and should seek star-rating-demonstrator/), which can help a user to improve its design standards for vulnerable users, evaluate the impact of different countermeasures such as, two-wheelers and pedestrians. Ethiopia and given an input of baseline data, and the iRAP Road Mexico should focus on making their infrastructure Safety Toolkit (http://toolkit.irap.org/) also provides safer for pedestrians, while Senegal might con- an overview of the most effective infrastructure sider behavior change campaigns. Brazil, Colombia, treatments. and India should consider safety interventions for two-wheelers, including appropriate infrastructure Which areas are most critical to treat can be evalu- design, and identify behavior change campaigns such ated as is done in figure E.4, where the percentage of as helmet wearing. For four-wheelers, poor infra- road fatalities represented by the user type (pedes- structure may be less of a concern, and road user trian, two-wheeler, or four-wheeler) is plotted against behavior and vehicle condition interventions should the percentage of the road network that is at an iRAP be considered for Ethiopia and Senegal. three-star or better rating. Therefore, those points                  Figure E.4. Percentage of Road Fatalities Relative and Road Safety Ratings per User Type                     !                                                                      !   !       Source: Original figure produced for this publication, based on iRAP data. Note: iRAP assessments are not currently not available for Rwanda, Nigeria, Liberia, and Mozambique. Reference WHO (World Health Organization). 2018. Global Status Report on Road Safety 2018. Geneva: WHO. Accessed March 11, 2021. https://www.who.int/publications/i/item/9789241565684. 130 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Appendix F. Implementation Guides by Project Archetype Vehicle inspection and certification: Private financier invests in public-private partnership (PPP) to build a network of inspection and certification centers to improve roadworthiness of vehicles Note: a. Activities will vary by country and setting and must be tailored to local context; b. noncomprehensive. c. See next graphic for details. Note: a. Examples of KPIs from research, for example, case studies; actual M&E framework will be designed with the enforcing authority, financer, and a road safety expert, and must be tailored to local context. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 131 Commercial vehicle fleet upgrade: Fleet managers upgrade their vehicles to achieve roadworthiness through complete vehicle renewal or safety upgrades Note: a. Activities will vary by country and setting and must be tailored to local context; b. noncomprehensive; c. Operator obtains title of vehicle upon expiration of lease; d. See next graphic for details. Note: a. Examples of KPIs from research, for example, case studies; actual M&E framework will be designed with the enforcing authority, financer, and a road safety expert, and must be tailored to local context. 132 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Commercial vehicle fleet upgrade: Fleet managers upgrade their vehicles to achieve roadworthiness through complete vehicle renewal or safety upgrades a a b Note: a. Activities will vary by country and setting and must be tailored to local context; b. noncomprehensive; c. See next graphic for details. a Note: a. Examples of KPIs from research, for example, case studies; actual M&E framework will be designed with the enforcing authority, financer, and a road safety expert, and must be tailored to local context. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 133 Road safety upgrades on highways: Upgrading highway infrastructure for protective infrastructure that adheres to iRAP’s three-star or better rating a c d b Note: a. Activities will vary by country and setting and must be tailored to local context; b. noncomprehensive; c. Land acquisition issues cited as major obstacle; d. See next graphic for details. a Note: a. Examples of KPIs from research, for example, case studies; actual M&E framework will be designed with the enforcing authority, financer, and a road safety expert, and must be tailored to local context. 134 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Speed management and automated enforcement: Upgrading roads with speed-reducing infrastructure and automated enforcement devices on high-speeding networks c a c b Note: a. Activities will vary by country and setting and must be tailored to local context; b. noncomprehensive; c. See next graphic for details. a Note: a. Examples of KPIs from research, for example, case studies; actual M&E framework will be designed with the enforcing authority, financer, and a road safety expert, and must be tailored to local context. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 135 Upgrades for protection of vulnerable users: Upgrading roads in urban settings to protect vulnerable road users that adheres to iRAP’s three-star or better rating for pedestrians, cyclists, and motorcyclists a c b Note: a. Activities will vary by country and setting and must be tailored to local context; b. noncomprehensive; c. See next graphic for details. a Note: a. Examples of KPIs from research, for example, case studies; actual M&E framework will be designed with the enforcing authority, financer, and a road safety expert, and must be tailored to local context. 136 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Effective post-crash care: Providing emergency medical services and regionalized trauma care network for road crash victims a c b Note: a. Activities will vary by country and setting and must be tailored to local context; b. noncomprehensive; c. See next graphic for details. a Note: a. Examples of KPIs from research, for example, case studies; actual M&E framework will be designed with the enforcing authority, financer, and a road safety expert, and must be tailored to local context. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 137 Glossary Blended finance is the use of catalytic capital from public or philanthropic sources to increase private sector investment in sustainable development (Convergence). More specifically, it is the use of concessional donor funds to mitigate specific investment risks and help rebalance risk-reward profiles of pioneering, high-impact investments so that they have the potential to become commercially viable over time (International Finance Corporation). Catalytic/concessional capital accepts disproportionate risk and/or concessionary return to generate positive impact and enable third-party investment that otherwise would not be possible (Convergence). Commercial fleet is the collection of motor vehicles owned or leased by an organization in pursuit of its business or orga- nizational objectives. Corporate social responsibility (CSR) is the act of incorporating environmental and social concerns into a company’s planning and operations and can include the creation of funds. Counterparty risk is the likelihood or probability that one of those involved in a transaction might default on their con- tractual obligation. Credit risk is the possibility of a loss resulting from a borrower’s failure to repay a loan or meet contractual obligations. Currency risk refers to the losses that an international financial transaction may incur due to currency fluctuations. It is also known as foreign exchange risk. Development finance institutions (DFIs) are specialized development banks or subsidiaries set up to support private sector development in developing countries. They are usually majority-owned by national governments and source their capital from national or international development funds or benefit from government guarantees. This ensures their cred- itworthiness, which enables them to raise large amounts of money on international capital markets and provide financing on very competitive terms (Organisation for Economic Co-operation and Development; OECD). Environmental, Social, and Governance (ESG) reporting relates to the disclosure of data by investors and corporations on a business’s impact on the areas of the environmental, social, and corporate governance. Green bonds are any type of bond instrument where the proceeds will be exclusively applied to finance or refinance, in part or in full, new and/or existing eligible green projects and that are aligned with the four core components of the Green Bond Principles (International Capital Market Association; ICMA). Guarantee is a contract by a third party (guarantor) to back the debt of a second party (the creditor) for its payments to the ultimate debtholder (investor). 138 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Impact bonds are a type of outcomes-based funding where private investors provide up-front capital to service providers to deliver an intervention or program to achieve measurable outcomes for a target population. Upon the achievement of the agreed-upon outcomes, the investors are then repaid with a premium by an outcome funder. Investors bear the risk that their investments may not be repaid in full if the outcomes are not achieved. Impact investments are investments that seek to generate positive social and environmental outcomes, alongside finan- cial returns (Global Impact Investing Network; GIIN). International Road Assessment Programme (iRAP) is a registered charity with a vision of a world free of high-risk roads for all road users. The iRAP global standard for road safety has been applied in more than 100 countries, and its star-rating models form the basis of the UN Member State agreed Global Road Safety Performance Targets in support of SDG Target 3.6 to halve road deaths and injuries by 2030 (International Road Assessment Programme; iRAP). iRAP star ratings for pedestrians, cyclists, motorcyclists, and vehicle occupants provide an objective measure of the like- lihood of a crash occurring and its severity. One star is the least safe and five star is the safest. Star ratings are based on road inspection data conducted in accordance with iRAP methodology and provide a simple and objective measure of the level of safety that is “built in” to the road for vehicle occupants, motorcyclists, bicyclists, and pedestrians (iRAP). Junior debt refers to bonds or other forms of debt issued with a lower priority for repayment than other (more senior) debt claims in the case of default. Low- and middle-income countries (LMICs) are categorized based on the World Bank assignment of the world’s econ- omies to four income groups: low, lower-middle, upper-middle, and high-income countries, of which LMICs are the three lowest. The classifications are based on gross national income (GNI) per capita in current US$ (using the Atlas method exchange rates) of the previous year. In 2020, low-income countries had a GNI per capita less than US$1,306, lower-middle income between US$1,036 and US$4,054, and upper-middle income between US$4,046 and US$12,535 (World Bank). Monitoring and evaluation (M&E) is the systematic process of collecting and analyzing information to track an activity’s progress toward a certain target in order to inform management decisions. Multilateral development banks (MDBs) are supranational institutions set up by sovereign states, which are their share- holders. Their remits reflect the development aid and cooperation policies established by these states. They have the com- mon task of fostering economic and social progress in developing countries by financing projects, supporting investment, and generating capital for the benefit of all global citizens (European Investment Bank; EIB). Outcomes-based funding is a type of funding that, rather than funding the delivery of an intervention (the inputs to a program or project), is only provided when positive outcomes have been achieved by the program or project, and these outcomes have been verified. Impact bonds are a form of outcomes-based funding. Outcomes funds pool capital from one or more outcome funders to pay for a set of predefined outcomes, allowing for the deployment of multiple impact bonds under one structure. As in all outcomes-based funding structures, payments are only made if those predefined outcomes are met. SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 139 Private sector is the part of the national economy that is not under direct government control. This includes both the real and financial sectors (World Bank). Public-private partnerships (PPPs) are long-term contracts between a private party and a government entity to provide a public asset or service, in which the private party bears significant risk and management responsibility, and remuneration can be linked to performance (World Bank). Road concessions are public-private partnership agreements between the government and a private sector corporation pertaining to the service of roads. Under a typical concession contract, a private sector firm builds or rehabilitates, main- tains, operates, and finances a road for a period between 20 and 30 years. It is common that the commissioning author- ity, be it local or central, grants the private firm the privilege of receiving toll payments from road users (Inter-American Development Bank; IDB). Road safety audit is the formal safety performance examination of an existing or future road or intersection by an inde- pendent, multidisciplinary team. It qualitatively estimates and reports on potential road safety issues and identifies oppor- tunities for improvements in safety for all road users (Federal Highway Administration; FHWA). Social bonds are any type of bond instrument where the proceeds will be exclusively applied to finance or refinance in part or in full new and/or existing eligible social projects and that are aligned with the Social Bond Principles (ICMA). Social finance is financing that supports actions mitigating or addressing a specific social issue and/or seeking to achieve positive social outcomes especially but not exclusively for a target population(s) (ICMA). Social loans are any type of loan instrument made available exclusively to finance or refinance, in whole or in part, new and/or existing eligible Social Projects (Loan Market Association; LMA). Socially responsible investment refers to investing with the aim of achieving financial returns while respecting specific ethical, environmental, and/or social criteria (ICMA). Sustainability bonds are bonds where the proceeds will be exclusively applied to finance or refinance a combination of both green and social projects (ICMA). Sustainability-linked bonds are any type of bond instrument for which the financial and/or structural characteristics can vary depending on whether the issuer achieves predefined sustainability/ESG objectives. In that sense, issuers are thereby committing explicitly (including in the bond documentation) to future improvements in sustainability outcome(s) within a predefined timeline. Sustainability-linked bonds (SLBs) are a forward-looking performance-based instrument. Those objectives are (1) measured through predefined key performance indicators (KPIs) and (2) assessed against predefined sustainability performance targets. The proceeds of SLBs are intended to be used for general purposes, hence the use of proceeds is not a determinant in its categorization. Thus, please note that SLBs are not to be confused with Sustainability Bonds that is, use of proceeds bonds (ICMA). 140 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Sustainability-linked loans (SLLs) are any types of loan instruments and/or contingent facilities (such as bonding lines, guarantee lines, or letters of credit) that incentivize the borrower’s achievement of ambitious, predetermined sustainability performance objectives. The borrower’s sustainability performance is measured using sustainability performance targets (SPTs), which include KPIs, external ratings, and/or equivalent metrics and which measure improvements in the borrow- er’s sustainability profile. The use of proceeds in relation to a SLL is not a determinant in its categorization and, in most instances, sustainability-linked loans will be used for general corporate purposes. Instead of determining specific uses of proceeds, SLL look to improve the borrower’s sustainability profile by aligning loan terms to the borrower’s performance against the relevant predetermined SPTs (ICMA). Sustainable Development Goals (SDGs) refer to 17 integrated and indivisible goals with 169 associated targets and form the core of the 2030 Agenda for Sustainable Development adopted by the United Nations on September 25, 2015, which has as its goal ending poverty, protecting the planet, and ensuring prosperity for all. Each goal has specific targets to be achieved by 2030. These goals and targets have been designed for consideration by national governments but have also been increasingly used as appropriate by corporates (ICMA). Sustainable finance incorporates climate, green, and social finance while also adding wider considerations concerning the longer-term economic sustainability of the organizations that are being funded, as well as the role and stability of the overall financial system in which they operate (ICMA). Technical assistance is nonfinancial assistance provided by local or international specialists. It can take the form of shar- ing information and expertise, instruction, skills training, transmission of working knowledge, and consulting services and may also involve the transfer of technical data (United Nations Educational, Scientific, and Cultural Organization; UNESCO). Themed use-of-proceeds bond is a standard recourse-to-the-issuer debt obligation for which the proceeds shall be cred- ited to a sub-account, moved to a sub-portfolio, or otherwise tracked by the issuer and attested to by a formal internal pro- cess that will be linked to the issuer’s lending and investment operations for eligible investments under the theme (ICMA). Viability gap funding is a grant to support projects that are economically justified but not financially viable. Vulnerable road users are nonmotorized road users, such as pedestrians and cyclists, as well as motorcyclists and per- sons with disabilities or reduced mobility and orientation (European Union; EU). SAVING LIVES THROUGH PRIVATE INVESTMENT IN ROAD SAFETY 141 Mobility and Transport Connectivity series: 2021 reports Accelerating Digitalization: Critical Do Speed Limit Reductions Help Road Actions to Strengthen the Resilience Safety?: Lessons from the Republic of of the Maritime Supply Chain Korea’s Recent Move to Lower Speed https://openknowledge.worldbank.org/ Limit on Urban Roads. handle/10986/35063 https://openknowledge.worldbank.org/ Available also in French. handle/10986/36109 World Bank. 2021. Mitra, Sudeshna; Job, Soames; Han, Sangjin; Eom, Kijong. 2021. Closing the Gap: Gender, Transport, Electrification of Public Transport: A and Employment in Mumbai Case Study of the Shenzhen Bus Group. https://openknowledge.worldbank.org/ https://openknowledge.worldbank.org/ handle/10986/35297 handle/10986/35935 World Bank. 2021. World Bank. 2021. Connectivity for Human Capital: To Pave or Not to Pave: Developing a Realizing the Right to Education and Framework for Systematic Decision- Healthcare through Improved Public Making in the Choice of Paving Transport in African Cities Technologies for Rural Roads https://openknowledge.worldbank.org/ https://openknowledge.worldbank.org/ handle/10986/35185 handle/10986/35163 World Bank. 2021. World Bank. 2021. The Road to Opportunities in Rural Adapting Mobility-as-a-Service India: The Economic and Social for Developing Cities: A Context- Impacts of PMGSY Sensitive Approach https://openknowledge.worldbank.org/ https://openknowledge.worldbank.org/ handle/10986/36626 handle/10986/36787 World Bank. 2021. World Bank. 2021. 142 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Photo Credits Cover Page: Benoit Daoust, Shutterstock, 1305347344 Page 8: Connel, Shutterstock, 415693993 Page 23: lzf, Shutterstock, 1959451564 Page 30: Sarah Farhat, World Bank Page 42: Simone D. McCourtie, World Bank Page 66: Sdecoret, Shutterstock, 357494876 Page 102: Simone D. McCourtie, World Bank Page 116: Metamorworks, Shutterstock, 2021905871 Page 121: Trinn Suwannapha, World Bank