Infrastructure has always been the backbone for global growth and humanity's progress. Roads, ports, power grids, broadband networks and utilities are the arteries through which goods, services, investment and future prosperity must flow. Building new as well as modernizing existing infrastructure is the necessary foundation for both growth today and resilience tomorrow.

Yet despite this centrality, investment in infrastructure continues to lag far behind global needs. The financing gap continues to grow — standing at over $15 trillion between now and 2040. This gap is most acute in emerging markets, which account for more than 90 percent of world population growth — from 4 to 8 billion — in the last 50 years, yet this is also the region where world growth will be powered from in the next decade.

Part of the issue is that infrastructure in emerging markets has a branding problem. Investing in it is increasingly seen as the right thing to do for sustainability. Consequently, it can be positioned as, at best, discretionary and sometimes philanthropic.

But the paradox is that there is plenty of capital. Finance exists and in larger volumes than ever, even accounting for the ongoing political pressures on public resources. But capital flows to where the signals point. And, if those signals are weak or mixed, it will continue to default to safer and shorter-term bets.

There is an urgent need for a brand reset on this narrative and to ensure it is more broadly understood for what it is — a necessary and compelling commercial opportunity. Infrastructure financing has to account for its growth potential and the ability to avoid economic losses.

While this will unlikely be a quick fix, every actor — from governments and multilateral development banks to financiers and regulators — has a role to play, collectively, to help overcome some of the more specific challenges related to infrastructure finance.

The first obstacle is the lack of long-term planning and execution consistency by some governments. Absence of a transparent road map with clear project prioritization deters private investors and slows down the most urgently needed initiatives. Countries should leverage on project preparation facilities to help structure, manage and mitigate risks. Critical projects cannot move forward without government approval, permits and clarity of ownership beyond the development phase. In many markets these are slow, opaque or vulnerable to political interference. Without political leadership to streamline processes, billions of dollars will continue to sit idle.

Second, the sourcing of finance. Emerging markets, facing the steepest funding gaps, often struggle to access affordable capital. Mobilizing private capital at scale requires creative structuring — blended finance, guarantees, and long-term vehicles that can match the lifespan of the assets being built. Increasingly hailed as the solution to infrastructure finance, blended finance, which is an innovative approach to development financing that strategically combines public, philanthropic, and private capital to fund sustainable development initiatives, particularly in low income and developing countries, reduced last year. In the instances where it has been deployed, it has proven to be a catalyst, so its potential is undiminished. As for investors, emerging market assets can act as a source of risk diversification for private credit, sovereign wealth funds and pension funds, which historically have a propensity to focus on developed market exposures.

The third challenge lies in the regulatory treatment of infrastructure finance. Private sector banks and institutional investors must operate within prudential rules that shape where they put money. Current frameworks treat infrastructure as riskier than it truly is, penalizing long-term lending compared with short-term exposures. It is encouraging to see the B20 Finance & Infrastructure Task Force call out the mismatch between risk perception and risk performance. So long as this persists, infrastructure will remain underfunded.

Each of these are politically and technically complex — but imminently achievable. Each would benefit from a clear and collective expression that infrastructure is a "must-have", setting a powerful cross-sector signal that capital and enabling policy can follow.

The stakes are high. Without major infrastructure investment, emerging markets will struggle to sustain growth, leaving billions locked out of prosperity. Without resilient energy and transport systems, economies will remain vulnerable to climate shocks and supply chain disruptions. And without stronger digital and physical networks, global productivity will falter at precisely the moment the world needs new engines of growth.

The question is not whether the world can afford to finance its infrastructure needs, but whether it can afford not to.

The author is the president, international at Standard Chartered.

The views don't necessarily reflect those of China Daily.

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