The integration of nature and sustainability in cities has ceased to be an aspirational concept to become a strategic axis of urban development. The need to build cities that are resilient, sustainable and prepared for climate change and demographic challenges has transformed the green urbanism into a key factor in both public policies and investment decisions.

The data confirms it: according to the Preqin Infrastructure Global Report 2025the assets under management in unlisted infrastructure - a sector that includes green and sustainable projects - will reach 2.35 trillion dollars by 20292.35 trillion by 2029, with a projected annual growth of 10,8%. This increase responds to the growing appetite of institutional investors for infrastructure associated with sustainability, urban mobility and energy transition, mainly focused on Core & Core-plus strategies.

Green Infrastructure flourishing among investors

Green infrastructure, ranging from parks and green corridors to nature-based urban solutions for water management and heat mitigation, has established itself as one of the most dynamic segments of the global infrastructure market.

Preqin's report highlights that, by 2024, transactions in renewable energy and sustainability accounted for 69% of total primary infrastructure transactions, the highest level since 2006.the highest level since 2006. This trend reflects not only the environmental imperative, but also the perception that assets and investment strategies related to these initiatives offer resilience and stability, even in complex economic environments.

While ESG investment-related funds tend to have lower volatility than funds not guided by ESG criteria, in the case of ESG infrastructure funds, they tend to have lower volatility than funds not guided by ESG criteria. ESG Infrastructure Fundsnot only have lower volatility, but have also generated higher returns than their comparables. generated higher returns than their comparable Non-ESGpossibly due to an investment approach with a more moderate risk-return profile than other types of strategies, such as Private Equity.

Cities that are breaking new ground

The development of sustainable cities is not only a private sector drive. Several governments have implemented concrete public policies to promote green urbanism:

• Medellín, Colombia: The "City of Eternal Spring", with its green corridors that run through the main streets and avenues with its green corridors running through the main streets and avenues, has reduced the ambient temperature by up to 2 degrees Celsiusas part of a comprehensive climate change adaptation plan.
• SingaporeRecognized as a global model, the country has incorporated green roofs and green facades in its legislation since 2009, with an installed green infrastructure of more than 200 hectares in urban buildings.
• Paris, FranceThe "Paris Breathes" program and urban renaturation urban renaturation projects have created more than 30 hectares of new green spaces in densely urbanized areas.
• Copenhagen, DenmarkGreen infrastructure plan has reduced motorized traffic, increased green spaces and improved air quality in several neighborhoods, and implemented water management strategies aligned with climate change adaptation initiatives.
• Barcelona, SpainThe implementation of the superblocks (superblocks) has reduced motorized traffic, being highlighted for its sustainable mobility approach by the World Smart City Awards.

These examples show that green urbanism is already part of the urban development agenda in several regions, supported by regulatory frameworks and active policies.

In line with the above, interest in the private sector in interest in sustainable infrastructure investment has been growing in the private sector.. Although today these positions are still underweight in the portfolios of the main market players, they recognize that investment in infrastructure with social impact will be an important trend in the coming years, together with investment in energy transition and decarbonization.

Urgency under concrete

The growing allocation of capital to sustainable infrastructure, coupled with proactive public policies in various cities, demonstrates that green urbanism is not only an aesthetic trend, but a central axis in the construction of resilient and competitive cities, considering that by 2050, about 68% of the world's population is projected to live in urban areas.

The challenge is clear: we must promote the growth and transformation of our urban spaces, which are already facing the consequences of climate and demographic changes.which are already facing the consequences of climate and demographic changes. Increasingly intense heat and cold waves, respiratory diseases, pollution and unequal access to green spaces are just some of the issues that require attention.

The development of green infrastructure is not a utopia, it is an urgency that beats under the concrete and is felt in every forgotten corner of our cities, and that can no longer wait for the future to catch up with us.

Raimundo Fuenzalida
Portfolio Manager Private Debt Fynsa AGF