_Beyond the Gap_ improves upon many previous costing studies by including the cost of future operation and maintenance, and by discounting the estimates. In low- and middle-income countries, annual maintenance costs during 2015–30 are projected to be 0.1–0.2 percent of GDP for water and sanitation, 1.1–2.1 percent of GDP for transport infrastructure, and 0.02–0.11 percent of GDP for flood protection, although costs vary as a share of regional GDP (Figure 1B).<sup>7</sup> Maintenance is crucial to the supply of reliable infrastructure service. It can also generate substantial savings. In the transport and water and sanitation sectors, for instance, good maintenance reduces the lifecycle cost of infrastructure by more than 50 percent. It is thus crucial that maintenance costs be included in budget planning.

# **B. Regional estimates of investment needs**

The WBG’s SDG costing estimates at the global level build on a significant body of work on infrastructure investment needs at the regional level. In some regions and countries, the investment needs exceed the 4.5–8.2 percent of GDP estimated for the global level. Although not all of these estimates were explicitly produced to track progress toward the SDGs, they all cover sectors included in the SDGs. These costing exercises use different country samples and time periods. They also differ in their definitions of the targets to be achieved with investment (e.g. SDGs or other policy goals) and in whether they include maintenance costs. These differences across studies make comparability challenging. Moreover, these studies, whether conducted by the WBG or other institutions, typically do not attempt to optimize future investment needs in light of the historical, and possibly constrained, relationship between infrastructure, income level, population, and urbanization (Fay et al. 2017).

- _East Asia and Pacific_ . Progress in the development of infrastructure has been uneven within the region. Among East Asian and Pacific countries, Cambodia and Myanmar require the most improvement in access to infrastructure services (Marcelo Gordillo et al. 2017). For example, about 60 percent of Cambodia’s population has access to electricity, but 20 percent of the power generated is lost in transmission and distribution.

- _Europe and Central Asia._ Despite recent moves toward greater infrastructure links, countries in Central Asia remain poorly connected to the rest of the region and the rest of the world, as reflected in elevated cost and time of transport (Gould 2018). Limited resources to rehabilitate, operate and maintain existing infrastructure in the region present a challenge to providing reliable infrastructure services.

- _Latin America and the Caribbean._ Between 2008 and 2013, regional investment in infrastructure averaged 2.7 percent of GDP, lower than the 4–5 percent of GDP average infrastructure investment needs estimated by the literature (Fay et al. 2017). Although access to water and electricity in Latin America and the Caribbean is relatively high, the region underperforms in transportation. Within the region, access is uneven, and provision of some services is inefficient, ultimately holding back progress on multiple SDGs. The

> 7 In a recent study, Hallegatte, Rentschler, and Rozenberg (2019) analyze the ability of infrastructure systems to function and meet users’ needs during and after natural hazards. They show that maintenance costs will increase in the presence of climate change and natural disasters.

7