The SAVi assessment workflow consists of eight steps: determining a client’s needs, determining project risks and externalities, creating a causal loop diagram, creating a custom SAVi simulation model, validating the model, analyzing the results, reviewing the results with our client and issuing a final report to support our client in their decision making. To learn... Read more »
Frequently Asked Questions
Common FAQ
Natural infrastructure refers to land networks or ecosystems that provide services inherent to those geographical areas, while also perpetuating active conservation efforts and the enhancement of those environments.
Sustainable infrastructure involves developing roads, buildings, energy and water infrastructure with due consideration to economic, social and environmental implications. The International Institute for Sustainable Development (IISD), which designed SAVi and runs the assessments, defines sustainable infrastructure assets as those which: Lower carbon and environmental footprintsProtect natural ecosystems Prove resilient to changing climates Optimize the use... Read more »
About SAVi and Sustainable Infrastructure
Roads, ports, power plants, schools, hospitals and town halls are essential public assets and services. Designing, financing, building and managing them require a variety of skills, industries and supply chains. Done right, sustainable infrastructure can therefore trigger environmental and social improvements across multiple industries. For example, certain types of transportation infrastructure projects, such as the... Read more »
Infrastructure has its own dedicated Sustainable Development Goal (SDG 9) and is also listed as a way of achieving a series of other SDGs, including water and education. For example, SDG 4 on education includes as a means for implementation the following: “Build and upgrade education facilities that are child, disability and gender sensitive and... Read more »
Natural ecosystems and bioengineered hybrid solutions provide a variety of infrastructure services. These services include protection from flood and storm surges, water purification, water storage, irrigation, wastewater treatment, carbon storage and a reduction in energy consumption. In the context of green economy planning, natural ecosystems are also assets that directly increase revenues for several industries,... Read more »
SAVi looks at the system as a whole, mapping out how different factors can affect our interconnected economic, financial, social and environmental systems. It also allows us to understand the various actors that work within those systems. Additionally, SAVi helps governments and investors prepare for the unexpected, thus avoiding costly surprises as the project progresses.... Read more »
The answer depends on many interlinked factors. These include: the type of asset involved, the asset’s location, the maturity of domestic markets for green and clean technologies, labour costs, building material costs, government subsidies for green technologies, the availability of concessional lending for green construction and other similar considerations. In many countries, sustainable infrastructure does... Read more »
SAVi identifies a range of economic, social and environmental risks and simulates how these will change and affect project cashflows across the asset life cycle. This is possible because the SAVi system dynamics model simulates how the asset affects and is in turn affected by the surrounding economic, social and environmental “system.” SAVi can hence... Read more »
Definitions
A risk is the probability of a negative event such as liability, damage, injury or loss. Risks are due to weaknesses and vulnerabilities in the natural environment, in our social systems, in our economies and in financial markets. In finance, risk relates to the probability that the return on investment will be lower than forecast.... Read more »
An externality is a positive or negative outcome of a given economic activity that affects a third party that is not directly related to that activity. Erosion and chemical runoff caused by building roads, which causes water pollution further downstream, is an example of a negative externality. By comparison, an increase in high-earning taxpayers, resulting... Read more »
SAVi assessments produce valued-added cost–benefit analyses (CBAs). These analyses show how direct project risks and second-order externalities affect gross margins, return on investment, internal rates of return, debt service coverage ratios, loan life coverage ratios and other financial performance indicators of interest to asset owners. We also add value to traditional CBAs by valuing the... Read more »
Project finance modelling involves calculating whether the cash flows generated by the project will be sufficient to service the debt and generate an attractive risk-adjusted return for both equity and debt investors. The model generates results on the return on investment, gross margin, internal rate of return, net present value, debt service coverage ratio, loan... Read more »
A causal loop diagram maps out the key indicators and variables of the system under evaluation. The diagram shows the causal relationships between these different elements. These diagrams also make it possible to identify “feedback loops” within those causal relationships that can be self-reinforcing and to see “policy entry points.”
Grey infrastructure involves engineered assets that provide one or multiple services required by society, such as transportation or wastewater treatment.
Natural infrastructure refers to land networks or ecosystems that provide services inherent to those geographical areas, while also perpetuating active conservation efforts and the enhancement of those environments.
Within the SAVi context, a scenario refers to expectations about possible future events, which can then be used to analyze potential responses to these upcoming developments. When we analyze a scenario, we map out various future alternatives, looking both at their causes and how they can affect our system (e.g., a country or business).
Sustainable infrastructure involves developing roads, buildings, energy and water infrastructure with due consideration to economic, social and environmental implications. The International Institute for Sustainable Development (IISD), which designed SAVi and runs the assessments, defines sustainable infrastructure assets as those which: Lower carbon and environmental footprintsProtect natural ecosystems Prove resilient to changing climates Optimize the use... Read more »
Using SAVi
Yes. SAVi users and their stakeholders can test alternative data inputs to compare the differences in the simulated costs of risks, as well as the costs of second-order externalities. We can change inputs and re-run the simulation within minutes, even seconds, such as factoring in the costs from a carbon tax or an increase in... Read more »
The SAVi assessment workflow consists of eight steps: determining a client’s needs, determining project risks and externalities, creating a causal loop diagram, creating a custom SAVi simulation model, validating the model, analyzing the results, reviewing the results with our client and issuing a final report to support our client in their decision making. To learn... Read more »
We have dedicated models for all renewable energy assets—solar, wind, biomass and hydropower—and are able to compare SAVi risk-adjusted returns from those assets against fossil fuel alternatives of the same size. We also have models for roads, surface buildings, irrigation, water supply and sewerage. We are now building a model for waste.
SAVi can be used across the infrastructure cycle to value the costs of risks and externalities. Read more »
SAVi can be used across the infrastructure cycle to value the costs of risks and the costs of emerging risks. Read more »