CVC Opportunities in Infrastructure

Opportunities for innovative revenues and CVC are rich and diverse. This section will provide examples of CVC opportunities in infrastructure drawn from various resources such as the World Bank’s Global Platform for Sustainable Cities¹, the World Bank’s PPP Legal Resource Center², the Global Infrastructure Hub³, local government websites, company websites, and case studies, as well as the Worked Examples in the Annexes of this report. This section will share insights and examples as to how governments should approach CVC. This section includes a broad but non-exhaustive set of CVC categories, to help the reader identify possible CVC models that might be relevant for a given project or portfolio of projects. It should be noted that not all of the examples and cases discussed and referenced here are successful cases, The Guidelines aim to provide a structured approach to apply success factors and lessons learned from other jurisdictions.

CVC arises under, above, around or within project facilities as shown in Figure 5. For example, air rights can be used to build residential areas, office space, and rooftop solar power generation above public facilities, under the project, may be opportunities for underground parking, commercial areas and storage, within project facilities may be space for advertising and retail services, around the project may be space for commercial services, residential/office space and parking. Project Owners and governments should be creative and open minded, to identify potential CVC opportunities, while being careful to identify risks, assess market demand, gathering market feedback and testing the viability of the CVC opportunity at program design and project feasibility stages.

Figure 5: Possibility for CVC 

^{Source: World Bank10}

The following section of this report showcases six non-exhaustive, broad categories of CVC. These categories include: (i) commercial associated with core-services; (ii) commercial activities within the footprint of the infrastructure; (iii) asset and resource optimisation; (iv) leveraging green-house gas emissions reductions; (v) repurposing or adapting/reusing idle assets; and (vi) commercial activities outside of the footprint of the infrastructure. For each category, a broad definition will be provided, followed by some examples and case studies. However, not all examples will be able to show similar potential for all similar projects and each opportunity needs to be understood through a detailed project level assessment. Different examples may also require different supportive legal framework for the CVC opportunities to be implementable. 

Commercial activities associated with core-services:

Core services can be provided for commercial purpose with improved facilities and services. For example, a public hospital which has a strong reputation for medical staff and medical care can generate additional revenue by adding space for private clinics with shorter waiting time and improved facilities to attract middle- and high-income groups. This type of revenue, however, has to be carefully managed so that it will not adversely impact quality of core-services. Commercial services can help cross-subsidize services provided to serve public purpose. See Figure 6 for examples and case study. 

Figure 6: CVC category - Commercial activities associated with core-services

Commercial activities within the footprint of the infrastructure

The development of infrastructure asset creates public and virtual space that can be used for commercial purpose. See Figure 7 for examples and case studies. 

Figure 7: CVC Category - Commercial activities within the footprint of the infrastructure

Asset and resource use optimisation

Commercial opportunities can arise from existing operational asset or resource which are underutilized or has untapped potential. See Figure 8 for examples and case studies. 

Figure 8: CVC category - Asset and resource use optimisation 

Leveraging green-house gas emissions reduction

To meet global climate targets, infrastructure has an important role to play to contribute to emission reductions through adoption of green technology. Some of these efforts can deliver emissions reductions that generate carbon credits and an additional reveue stream for the project. See Figure 9 for examples and case studies. 

Figure 9: CVC category - Leveraging green-house gas emissions reduction 

Repurposing or adapting/reusing idle assets

Some public assets can lie idle in city centre or areas with high economic value due to outdated use or lack of funding for renovation of the facilities. These assets can be repurposed or adapted for commercial use to respond to changing environments. See Figure 10 for examples and case studies. 

Figure 10: CVC category - Repurposing or adapting/reusing idle assets 

Commercial activities outside of the footprint of the infrastructure: CVC opportunities may be located some distance from the project footprint, for example where the activity requires too much land to be located near the project, where the CVC activity would be too loud or polluting, or where land is only available far from the project footprint.. See Figure 11 for examples and case studies. 

Figure 11: CVC category - commercial activities outside of the footprint of the infrastructure

Footnote 1: Global Platform for Sustainable Cities

Footnote 2: PPPRC

Footnote 3: Global Infrastructure Hub

Footnote 4: Module 17 – Capturing Commercial Value of the World Bank Municipal PPP Framework.