Digital Infrastructure Investment: Where will the billions come from?
By Alex Wong, Senior Advisor, Strategic Engagement and Initiatives, ITU
Today’s digital economy offers great potential to unlock economic growth and social development globally. But there is an entrance requirement: Internet connectivity.
As many as 2.6 billion people — roughly a third of the global population — remain unconnected, largely due to a lack of necessary infrastructure for even basic digital connectivity.
This leaves them cut off from the benefits of online communication as well as myriad learning and economic opportunities, including those associated with emerging technologies such as artificial intelligence (AI).
Simply put, equality and equity are not possible without equal access to the Internet.
While estimates vary, the most comprehensive estimate to date suggests that building out the infrastructure to connect everyone adequately will cost hundreds of billions of dollars by 2030.
How to mobilize digital infrastructure investment
A new initiative by the International Telecommunication Union (ITU) and leading multilateral financial institutions aims to unlock the vital billions to ready the world for a sustainable digital future.
The Digital Infrastructure Investment Initiative (DIII) brings together a range of organizations critical to digital infrastructure development including the private sector, civil society, academia, and governments.
ITU is co-leading the initiative with the Asian Infrastructure Investment Bank (AIIB), the African Development Bank Group (AfDB), the European Bank for Reconstruction and Development (EBRD), the Inter-American Development Bank (IDB), the Islamic Development Bank (IsDB) and the International Finance Corporation (IFC — part of the World Bank Group). We are doing this in close coordination with the G20 Presidency, held by Brazil in 2024 and by South Africa in 2025, and with the support of the Boston Consulting Group (BCG) as a knowledge partner.
Launched in early 2024, the DIII has strengthened the focus on digital infrastructure investment across several fronts.
Expanding meaningful and affordable connectivity will contribute directly or indirectly to accelerating progress towards 70 per cent of targets under the UN Sustainable Development Goals (SDGs), according to UN studies.
Progress is on track for only 17 per cent of the 169 SDG targets and stalled or regressing for over a third of them. Yet digital technologies could galvanize a turnaround.
This makes digital infrastructure investment a top global policy priority.
Along with the 2030 Agenda for Sustainable Development, building connectivity and developing the digital economy rank high among UN-wide priorities for Africa, as well as in G20 frameworks promoted by Brazil last year and now taken up by South Africa.
What is meant by digital infrastructure?
The essential infrastructure to enable “digital transformation” spans a range of components, including wireless, satellite links, fibre, data centres, undersea cables, and innovative emerging options, each with certain characteristics and investment profiles.
Connecting people and communities today depends not only on building and sustaining traditional connectivity infrastructure, but also on investing in cloud services, data centres, storage and computing capacity.
Mobilizing investment at this kind of scale presents a major international challenge. Investors point to the lack of de-risking mechanisms as a serious roadblock, followed by concerns about economic and political stability, government support, the reliability of demand, and the supporting infrastructure available in developing countries.
In response, the DIII has formed a working group to collaboratively identify solutions that can support investments in digital infrastructure.
In its initial stage, the working group focused on three key areas:
- Understanding the digital infrastructure investment gap and the consequent sustainable development opportunity.
- Developing a preliminary “Digital Infrastructure Investment Country Assessment Framework” to identify major roadblocks for digital infrastructure investment in countries.
- Identifying innovative financing mechanisms and instruments that international organizations and multilateral financing institutions can implement to accelerate progress on the target of achieving universal and meaningful connectivity by 2030.
This initial phase of work in 2024 has produced guidance on suitable funding sources, operating models, and financial and de-risking mechanisms to address the country- specific challenges identified in the assessment framework.
Making good business sense
Investing in digital infrastructure is ultimately about unlocking human potential and economic growth. In addition, the DIII aims to demonstrate a strong business case.
Another facet of this initiative, therefore, is to identify how the public and private sectors, along with development finance institutions (DFIs), can collaborate to introduce, adopt and make the best use of innovative financial mechanisms to ensure digital readiness.
Making that case will be important to gain access to the billions of dollars needed for digital infrastructure in challenging contexts over the medium and long term. Successful mobilization means bringing meaningful connectivity, as well as the benefits of digital transformation, to the world’s least developed countries (LDCs), landlocked developing countries (LLDCs), small island developing states (SIDS), and other emerging or underserved markets.
Cooperation on the digital future for all
The DIII Working Group’s recommendations were a key input to Brazil’s G20 Digital Economy Working Group and last year’s UN Summit of the Future.
This year, DIII findings will inform the upcoming Fourth International Conference on Financing for Development.
They will also help advance the work of Giga, the joint initiative between ITU and UNICEF to connect every school to the Internet, which is participating as a DIII Working Group member.
We look forward to embarking on the next phase later this year.
Download the related white paper: Digital Infrastructure Investment Initiative: Closing the digital infrastructure investment gap by 2030
Header image credit: Adobe Stock
