Solving Cities

Developing countries get a big investment in urban transportation

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The Asian Development Bank will provide loans and grants totaling $175 billion for transportation projects in developing countries.

While transportation projects are some of the most important investments a city can make they're also some of the most expensive.

That's why the Asian Development Bank announced at Rio+20, the United Nations conference on sustainable development, last week that they will join with seven of the world's largest multilateral development banks to provide loans and grants totaling $175 billion over the next 10 years for urban transportation projects in developing countries.

“Rapid motorization is creating more congestion, air pollution, traffic accidents and greenhouse gas emissions – especially in developing countries,” said ADB President Haruhiko Kuroda at a news conference in Rio de Janeiro, the site of the Rio+20 conference. “Developing countries have the opportunity to leapfrog to a greener future of less motorization, shorter commutes, and more energy efficient transport systems.”

As ADB points out in a news release, transportation is a key issue not only for the environment but also for the economy. By 2030 transportation-related CO2 emissions are expected to account for 50 percent of the global total. While transportation -- especially from vehicles -- emits large amounts of CO2, traffic congestion is also holding back national economies. Economic loses from traffic congestion total 5 percent of GDP in some Asian countries.

Andrew Revkin at The New York Times called the announcement "one of the most important developments at Rio+20." Here's why:

[T]hese loans typically leverage 10 or 20 times more public and private investment, meaning this initiative could shift trillions of dollars from conventional road-building projects to more sustainable transportation alternatives.

ADB has already invested in urban metrorail systems in Vietnam, bus rapid transit systems in Mongolia and Bangladesh, low-cost electric vehicles in the Philippines, and inland waterway transport in the People’s Republic of China.

Here's a helpful infographic from ADB showing the efficiency of different modes of transportation:

Photo: Flickr/Jonas Hansel

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Tyler Falk

Contributing Editor

Tyler Falk freelance journalist based in Washington, D.C. Previously, he was with Smart Growth America and Grist. He holds a degree from Goshen College. Follow him on Twitter. Disclosure