How offering incentives for private sector investment in sustainable Infrastructure and services benefits both local government and businesses

Sustainable infrastructure is becoming more and more important to the private sector, both for long-term economic viability and environmental stewardship. Driven by consumer demand, regulatory obligations, and the possibility of cost savings and competitive advantage, businesses in a variety of industries are putting strategies and innovations into place that support sustainability goals. 

A lot of businesses have made the commitment to use only renewable energy. For instance, to power their data centers, internet giants like Google and Apple have made significant investments in solar and wind energy. Businesses are equipping their properties with wind turbines, solar panels, and other sustainable energy sources. One well-known example is the renewable energy-powered Tesla Gigafactory. 

Governments around the world, including Kenya, have recognized the crucial role of the private sector in advancing sustainable infrastructure and services. To encourage private sector participation, various incentives are offered, which can be broadly categorized into financial incentives, regulatory support, and market-based incentives.  

Read also: The role of policy reforms in embracing sustainability in Africa

Some incentives include investment tax credits where the government allows private investors to deduct a percentage of their investment in sustainable infrastructure from their tax liability. This enables faster depreciation of assets related to renewable energy and sustainable infrastructure, reducing taxable income in the short term. 

The private sector can have access to grants and subsidies where government funds are provided to support specific projects related to renewable energy, energy efficiency, and sustainable infrastructure. Companies in water-intensive industries, such as agriculture and manufacturing, are adopting technologies to reduce water usage and recycle wastewater. Coca-Cola, for example, has implemented water stewardship programs to replenish water used in its beverage production. 

With the availability of incentives, many companies, like Unilever and Procter & Gamble, are aiming for zero-waste to landfill by reusing, recycling, or composting all waste produced in their operations. Businesses are developing programs to take back used products from customers for recycling or refurbishing. In Kenya, the supermarket chain has a system that allows clients to return their worn-out shopping bags to be refurbished with news ones at no cost. 

Many companies are now publicly reporting their Environmental, Social, and Governance (ESG) metrics, providing transparency about their sustainability efforts. This includes setting and reporting on specific sustainability targets. Britam recently launched its sustainability report which shows how companies are being more sustainable and working towards leaving a positive impact on the environment.  

Incentives for private sector investment in sustainable infrastructure and services are crucial for driving the transition to a sustainable economy. By offering financial benefits, regulatory support, and market-based incentives, governments can attract and sustain private sector participation in developing renewable energy. This can also trickle down to efficient resource use, and sustainable urban development by these private companies. These measures not only support environmental goals but also foster economic growth and innovation in sustainable technologies. 

The private sector’s embrace of sustainable infrastructure is multifaceted, involving renewable energy adoption, green building practices, sustainable supply chain management, water conservation, waste reduction and sustainable transportation. These companies are also getting into investment in green technologies, and transparent sustainability reporting. These efforts are not only helping to mitigate environmental impacts but also driving innovation, reducing costs, and enhancing brand reputation which demonstrates that sustainability and business success are increasingly interconnected. 

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