More than three thousand preventable deaths and over 100,000 injuries from occur from road trauma every day. Over the next ten years more than 30 million people will suffer life-changing injuries in road crashes. The costs will be borne by families, communities, health systems, insurers, business and the broader economy. But despite this only an estimated $1-3 is invested in road trauma prevention for every $100 of costs.
It is estimated that an additional US$260 billion of financing will be required to achieve road safety targets 3.6 and 11.2 of the Sustainable Development Goals (SDGs) in low and middle-income countries (LMICs) alone over the coming decade.
The Member State agreed Global Road Safety Performance Targets include the need for all new roads to be 3-star or better for all road users and to achieve 75% of travel on roads that are safe for all road users by 2030. To support these targets iRAP has developed the Business Case for Safer Roads that demonstrates how achieving 75% of travel on 3-star or better roads will deliver a BCR of 18 to 1 in low-income countries, 11 to 1 in low-middle income countries, 15 to 1 in upper middle-income countries and 4 to 1 in high-income countries. A win-win-win investment for all that will save lives, save money and create jobs.
Impact Investment and Innovative Financing
The actions needed to improve road safety are well understood – build safer roads, improve vehicle safety, reduce speeds, encourage and enforce safe road user behaviour and improve trauma care. The return on investment is significant with internal rates of return of 20%+ common.
Social impact investing provides an exciting opportunity to ‘unlock’ these win-win-win benefits of improving road safety by mobilising private-sector finance and donor funding through a “Saving Lives Bond” or similar financial instruments. With results-based financing to achieve 75% of travel that is 3-star or better for pedestrians, cyclists, motorcyclists and vehicle and public transport occupants worldwide by 2030 over 100 million people can be spared the burden of road trauma over the life of the infrastructure investments.
The Partnerships for 2030 Impact
The road industry knows how to build and maintain safer roads. Public-private partnerships are already active worldwide that are providing 3-star or better journeys for their customers (e.g. Malaysia, PiPa Concession, BR-153 Brazil, Abertis, Transurban, Indonesia). Governments are already setting national policy targets for 3-star or better roads by 2030 (e.g. UK, Vietnam, Australia, New Zealand). Joining the dots between the beneficiary of road trauma reductions and the solutions will provide the basis for innovative financing that will save lives. iRAP’s work with the government owned insurer TAC aims to inform this important aspect of impact investment.
iRAP is also partnering with the World Bank, IFC and the FIA High Level Panel to mobilise private-sector financing for road safety. The work benefits from the expertise of Dalberg, Cardno and Social Finance in developing appropriate financing instruments, business models and results-based investments across all road safety action areas.
iRAP’s vision for systematic long-term investment in 3-, 4- and 5-star highways and city streets for all road users in all countries worldwide will help save lives and achieve the SDGs. Initiatives like a “Footpaths for Africa” impact bond can target fundamental shortcomings of road infrastructure as we build back better.
The impact investment work is ongoing and builds on a range of concept and viability studies:
- iRAP Global Business Case for Impact Investors – English version here
- iRAP Global Business Case for Impact Investors – Portuguese version here
- FIA Foundation Investing to Save Lives report – https://www.fiafoundation.org/connect/publications/investing-to-save-lives
- FIA Foundation Breaking the Deadlock report – https://www.fiafoundation.org/connect/publications/breaking-the-deadlock