Digital infrastructure investment: USD 1.6 trillion to close the gap

Imagine a world everyone can use the Internet, where urban areas worldwide are linked into a fibre network, and where support is readily available for anyone who cannot afford digital services or lacks the skills to use them.

Building that reality requires closing a massive investment gap for digital infrastructure, estimated to reach at least USD 1.6 trillion, mostly in developing countries, according to a newly released white paper from the International Telecommunication Union (ITU).

Meaningful digital connectivity has become a vital foundation for communities, businesses, and governments around the world. By improving access to education, health care, employment, and financial services, it boosts people’s capacity, quality of life and income, especially in rural areas.

But achieving this is complex, requiring international, public-private and cross-sector cooperation amid daunting development challenges.

Digital Infrastructure Investment Initiative

ITU and leading development finance institutions (DFIs) have joined forces to focus on the financing gap for digital infrastructure — specifically hardware components, including wireless, satellite, fixed broadband, data centres, undersea cables, Internet exchange points (IXPs), and towers. The partners assessing how to address those challenges and mobilize investments on a massive scale — enough to meaningfully connect everyone worldwide by 2030.

The Digital Infrastructure Investment Initiative (DIII), launched in coordination with the Brazil’s G20 presidency last year, also draws on the expertise of industry players, investors, and infrastructure builders.

To start with, the DIII aims to:

• Understand the current financing gap and the opportunities it presents.
• Identify the main challenges countries face in advancing digital infrastructure investment.
• Identify innovative financing mechanisms and instruments to help achieve universal and meaningful connectivity by 2030.

Innovative finance needed

ITU’s white paper — Digital Infrastructure Investment Initiative: Closing the digital infrastructure investment gap by 2030 — analyses the investment gap, raises key questions, and summarizes achievements in the initiative’s first year.

The analysis suggests 33 per cent of today’s global population is offline. This reaches 54 per cent in low- and lower-middle-income countries, reflecting infrastructure and other challenges.

Demand fragmentation, core infrastructure gaps, unclear digital policies, execution risks, and country risks all hinder investment. But innovative financing can help overcome those challenges.

Digital infrastructure investment platforms and technical forums involving ITU, the DFIs, and digital infrastructure investors could strengthen investment coordination and drive collaborative financing.

Commitment to deliver

Connectivity for all has been a global policy aspiration for decades. Now, ITU and partners are grappling with it as a practical, solvable challenge.

“Together, let us commit to delivering high-quality infrastructure that will create lasting benefits on markets, economies, and communities around the world,” says ITU Secretary-General Doreen Bogdan-Martin in her foreword to the DIII white paper.

The DIII builds on the momentum of the Pact for the Future and Global Digital Compact adopted at the last UN General Assembly. In particular, it aims to catalyse the development of innovative and blended financing to connect the estimated 2.6 billion people not meaningfully connected in today’s world.

ITU is co-leading the initiative with the Asian Infrastructure Investment Bank, the African Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank, the International Finance Corporation, and the Islamic Development Bank, with Boston Consulting Group as a knowledge partner.

The initiative has also brought together over 40 organizations, representing investors, technology companies, governments, and civil society, in a dedicated DIII working group.

The need for the initiative was recognized by the G20 Digital Economy Working Group in last year’s Maceio Ministerial Declaration.

Going forward

This year, South Africa’s G20 presidency — with a focus on connectivity for inclusive digital development — promises to further step up the momentum on digital infrastructure investment challenges.

ITU plans to spotlight digital infrastructure needs, along with potential solutions and action areas, at the UN’s Fourth International Conference on Financing for Development (FfD4) in Seville, Spain, between 30 June and 3 July.

Download the white paper: Digital Infrastructure Investment Initiative: Closing the digital infrastructure investment gap by 2030

Note: The current USD 1.6 trillion digital investment gap estimate builds on an earlier USD 428 billion estimate developed as part of ITU’s Connect Humanity study in 2020. The estimate is now updated to reflect a meaningful connectivity target (20 mbps) to 100 per cent of the population, estimates for data centres, and operating expenditure (opex) costs to 2030.

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