How Private Money Is Powering the Push to Climate-Proof Roads, Railways, and Cities

The World Bank’s 2025 report, developed in partnership with CPCS Transcom Limited and GRID Engineers, provides a comprehensive blueprint for integrating private sector participation (PSP) into climate-resilient transport infrastructure. Backed by insights from the Global Center on Adaptation, Korea Green Growth Trust Fund, and Japan’s Quality Infrastructure Investment Partnership, the report highlights the urgency of designing, financing, and operating resilient railways, roads, and urban transport systems amid escalating climate risks. With natural hazards already threatening transport lifelines, the World Bank urges governments to adopt a system-wide, proactive approach, one that aligns legal frameworks, investment planning, and financing models with adaptation objectives.

Resilient Railways: From Policy to Practice

Railway infrastructure, vital to national connectivity and freight efficiency, is increasingly vulnerable to extreme weather events such as floods, landslides, and excessive heat. Yet, only a fraction of countries explicitly include railway resilience in their national climate policies. Drawing on successful examples from Vietnam, India, and Tanzania, the report illustrates how governments are tackling this oversight. In Vietnam, a high-level risk assessment revealed that disruptions in 20 percent of the railway network could result in daily losses exceeding US$2.6 million. This data, generated through joint modeling efforts with the World Bank, enabled Vietnamese authorities to prioritize adaptation investments and update their Nationally Determined Contributions (NDCs) and National Adaptation Plans (NAPs).

India’s approach focused on integrating disaster preparedness into the Eastern Dedicated Freight Corridor with early warning systems and design upgrades. In Tanzania, climate resilience planning went beyond rail infrastructure to include the rehabilitation of flood-control reservoirs, coordinated with the agricultural and irrigation ministries. These examples underscore that successful adaptation often requires inter-agency collaboration and cross-sectoral investments that extend beyond the immediate transport assets.

Picking the Right Models: Tailoring PPPs for Resilience

The report dives deep into the mechanics of public-private partnerships, providing governments with guidance on how to embed resilience into different PSP models. From full-scale Design-Build-Finance-Operate-Maintain (DBFOM) contracts to open access service agreements, the study maps where and how private actors can add value. Risk allocation is a recurring theme, with clear recommendations on which party, public or private, should handle specific responsibilities such as site selection, resilient design, and emergency preparedness.

A standout example is the Philippines, whose newly updated PPP Code mandates that climate resilience be explicitly addressed in all project planning, approval, and implementation stages. This legal clarity ensures that resilience is no longer treated as a peripheral concern but rather a contractual obligation that shapes how infrastructure is built and managed. Performance-based contracts are encouraged, with Key Performance Indicators (KPIs) tied to resilience outcomes such as service continuity during disasters and the ability to recover swiftly after extreme events.

Financing the Future: Green Bonds and Climate Capital

A central challenge facing climate-resilient infrastructure is the funding gap. Resilience upgrades typically raise capital and maintenance costs, reducing financial viability under conventional models. The World Bank’s report presents several ways to bridge this gap, including resilience investment charges built into user tariffs and viability gap funding from governments. However, it places particular emphasis on innovative finance, such as green bonds and sustainability-linked instruments.

Indonesia offers a model example, having issued sovereign green sukuk to fund railway upgrades in Java that support both emissions reductions and resilience. Private operators are also stepping in. In Brazil, Via Mobilidade raised nearly half a billion dollars through green bonds to support PPP-driven upgrades to São Paulo’s urban rail network. These bonds often attract broader investor interest and may reduce the cost of capital when paired with rigorous environmental targets. The report recommends that governments blend such instruments with concessional climate finance from institutions like the Green Climate Fund or the Global Environment Facility to improve the risk-return profile of resilient infrastructure projects.

Smart Solutions for Roads and Cities

The report applies a similarly structured approach to the road and urban transport sectors, highlighting the growing vulnerability of highways, rural roads, and city transit systems to climate-related disruptions. In Mozambique, for instance, more than half the road network lies in flood-prone areas. An economic analysis revealed that maintaining roads in good condition could cut flood-related losses by nearly 28 percent. In Vietnam, benefit-cost analyses conducted at the national and provincial levels found that many road links, especially coastal expressways, offered strong returns on adaptation investments, with some routes registering BCRs as high as 197.

Output and Performance-Based Road Contracts (OPRCs) emerge as a preferred PSP mechanism, particularly for developing countries. In the Limpopo River Basin in Mozambique, OPRCs enabled rapid emergency repairs after flooding, with contract terms linking payments to resilience-based performance indicators. Governments are advised to develop climate-informed terms of reference, conduct market sounding to ensure private sector appetite, and offer contingency support where residual risks remain too uncertain or severe for the private sector to bear alone.

In urban transport, where infrastructure density and interdependency complicate resilience planning, the report points to Douala, Cameroon as a promising example. There, flood risk assessments were integrated into the design of a new Bus Rapid Transit (BRT) system, with elevated stations, drainage upgrades, and adaptive service plans built in from the outset.

A Call to Action for Future-Proof Transport

The World Bank’s roadmap reinforces one central message: resilience must be a foundational requirement in infrastructure development, not an afterthought. The tools, financing options, and partnership models are already in place. What’s needed is political will, strategic alignment, and capacity-building to make resilience central to how transport infrastructure is financed, designed, and managed. By working collaboratively with private actors, development partners, and communities, governments can transform their transport networks into resilient lifelines capable of withstanding the shocks of a rapidly changing climate.