Sustainable Asset Valuation (SAVi)
and the case for investing in
Nature-based Infrastructure
Liesbeth Casier & Emma Cutler
March 2023

What if we invest in NBI where possible?
Cost-savings up to 50%
Health benefits, avoided pollution, avoided
damages to infrastructure
Increased revenues for local economic actors

Some barriers to scaling the use of NBI
✓ Lack of rigorous and systemic assessments on the potential of nature to provide
adaptation and infrastructure services
✓ Lack of understanding of the biophysical and monetary value of many
ecosystems and their related co-benefits
✓ Lack of comparability and certainty for policy makers, infrastructure planners and
investors to be able to rely on the performance of nature
✓ Lack of ability to compare the capital costs, operating costs and (indirect)
revenue streams of NBI with grey alternatives for adaptation

Questions SAVi can answer for
Governments & Cities
• How does environmental, social and economic performance
increase value for money for taxpayers?
• Is sustainable infrastructure systematically more expensive to
build? Can these costs be recuperated during the use phase?
• Do sustainable assets trigger more positive externalities such as
higher GDP, Green GDP, employments, innovation, productivity,
etc.?
• Will this asset help trigger sustainable development?
IISD’s Sustainable Asset
Valuation (SAVi) is an
assessment methodology
that helps governments
and investors steer
capital towards
sustainable infrastructure
and demonstrates how
this can deliver better
value-for-money for all.
Governments
& Cities
Investors Citizens

SAVi Methodology
Simulation
Customization
Valuation
Based on systems thinking, system dynamics simulation, and
project finance modelling.
Developed by placing a financial value on economic, social and
environmental externalities and risks
Customized to reflect local conditions and needs
Co-created through a multi-stakeholder approach that enables
the identification of material risks and opportunities that are
unique to the project.
Co-creation

➢Energy
➢Transport
➢Buildings
➢Water & irrigation
➢Waste
➢Nature-based
infrastructure
Current use of SAVi &
infrastructure sectors

Sustainable Asset Valuation (SAVi)
The SAVi methodology quantifies and values the environmental, social, and economic
externalities of infrastructure projects.

How we work

Example:
Results of an assessment of forest
restoration in the Brantas River Basin

Study Area
Geographic location
• East Java
• Three sub-watersheds in the upper Brantas
River Basin
Activities
• Upstream agriculture and forest
• Downstream industrial activity including a PT
Multibintang brewery

Environmental Challenges and Proposed Solutions
Current problems
• Deforestation and land degradation leading to limited
water retention
• Drought during the dry season
• Flooding and erosion during the rainy season
• Water pollution
Future problems
• Continued land degradation and associated problems
• Increased water demand
• More precipitation with more variability
Multi-stakeholder approach
• United Nations Industrial Development
Organization (UNIDO) convened public and
private sector stakeholders to identify priority
actions and apply for funding from the Global
Environment Facility to address water concerns
• Collaboration with the Ministry of Environment
and Forests
Proposed actions
• Reforestation and improved forest management
• Water retention wells

SAVi Assessment Goals
Quantify the costs, benefits, and financial performance of
forest restoration and water management, including
externalities and avoided costs
Assess the impact on downstream water availibity if land
restoration occurs on a large scale
Identify mechanisms to fund reforestation, such as
carbon finance

Integrated Cost Benefit Analysis Results (million USD)
20-year lifetime 30-year lifetime
RCP 4.5 RCP 8.5 RCP 4.5 RCP 8.5
Added Benefits
Value of bamboo exports 0.21 0.21 0.35 0.35
Value of agroforestry benefits 2.12 2.12 3.35 3.35
Tree planting wages 0.52 0.52 0.52 0.52
Carbon storage benefit 31.99 31.99 31.99 31.99
TOTAL ADDED BENEFITS 34.84 34.84 36.21 36.21
Avoided Costs
Avoided flood damages to households 24.00 24.53 486.79 77.96
Avoided flood damages to agriculture 12.06 14.00 193.73 36.90
Avoided erosion damages to agriculture 17.85 42.64 41.65 52.56
Avoided nitrogen pollution 17.10 17.10 25.65 25.65
Avoided phosphorus pollution 8.08 8.08 12.12 12.12
TOTAL AVOIDED COSTS 79.09 106.34 759.93 205.18
Investment & Maintenance Costs
Improved land management investment cost 8.94 8.94 8.94 8.94
Absorption wells and biopori investment cost 0.56 0.56 0.56 0.56
Annual maintenance costs 0.10 0.10 0.14 0.14
TOTAL COSTS 9.60 9.60 9.64 9.64
NET BENEFITS 104.34 131.59 786.50 231.75
BENEFIT TO COST RATIO 11.87 14.71 82.56 25.03

Key Takeaways
The project has positive net benefits
for society when externalities are
considered and is cheaper than
constructing a reservoir with the
same water retention capacity.
The project can reduce the costs of
extreme flooding and contributes to
climate adaptation.
Carbon payments play a critical role
in making the project financially and
economically attractive and can cover
the investment and maintenance costs.
The avoided costs of flooding,
erosion, and water pollution create
signicant value for society but are not
monetized for investors.

Results can be used by many stakeholders
• UNIDO / Donors and funders
o The assessment shows the value of a multi-stakeholder approach to land and water management
o Results can be used to help scale-up reforestation efforts
• Industry / private sector
o The assessment demonstrates that the project is an economical way to enhance water retention
and water availability for industry while also providing co-benefits for society
• Government
o The assessment highlights the value of land restoration and watershed management, which are
priorities identified in the Indonesia National Medium Term Development Plan 2020-2024

Thank You!
Contact details:
Emma Cutler, ecutler@iisd.org
Liesbeth Casier, lcasier@iisd.org