How Investing in Infrastructure Improves the Lives of Millions

For millions of people around the world, living with stability and prosperity depends, in part, on being able to trust the infrastructure systems around them. Access to basic public services makes both personal and community development possible—development that simply couldn’t happen without that infrastructure.

Across much of Latin America, trust in these systems is more than an abstract idea: it is the foundation that allows people to live without constant worry. When water, sanitation, transportation, and energy networks function reliably, people can direct their time and resources toward other essential parts of life. For that reason, public infrastructure investment is fundamental to the region’s development.

In Honduras, for example, a water and sanitation modernization project supported by the World Bank helped decentralize services by transferring them to municipal providers. As a result, nine water systems shifted from centralized management to nine local units, improving coverage, continuity, and maintenance. In some communities, water availability increased from only three days without any supply to more than twenty hours of service each day.

In Peru, in the past, the U.S. government supported the Natural Infrastructure for Water Security (NIWS) project, designed to restore and protect key ecosystems—forests, wetlands, and traditional canals—to strengthen water management and reduce drought and flood risks. The U.S. government has also allocated more than $30 million to these kinds of initiatives through climate adaptation and green infrastructure mechanisms.

Other investments are also driven through the United States International Development Finance Corporation (DFC). In 2024, the DFC and IDB Invest launched a new platform to co-finance development projects in Latin America. The DFC committed $30 million in technical assistance for ongoing projects, ensuring they meet environmental, social, and quality standards and can scale their impact.

These mechanisms are not just credit—they are a bet on strengthening public and public–private infrastructure projects, building institutional trust between Latin American governments and U.S. partners. The United States has consolidated its role as the region’s main investor, accounting for 38% of total FDI in Latin America and the Caribbean. In contrast, the European Union’s share fell to 15%, its lowest level since 2012. Investment originating within the region reached 12%, becoming the third-largest source of FDI, while China represented barely 2%.

“From CEPAL (ECLAC), we believe that Latin America and the Caribbean must leverage foreign direct investment to advance toward more productive, inclusive, and sustainable development. To do so, it is fundamental to use FDI as a strategic instrument within productive development policies,” highlighted José Manuel Salazar-Xirinachs, Executive Secretary of CEPAL.

Development and Trust Go Hand in Hand

When communities trust their public services, the benefits aren't just local. The reliability of systems like water, sanitation, and transport strengthens the economy, improves public health, and promotes investment. Additionally, when the citizenry participates in maintenance, the foundations are laid for more inclusive and resilient governance.

According to the OECD Survey on Trust in Public Institutions in Latin America and the Caribbean (LAC), only around 35% of people report having high or moderately high trust in their national government. Trust in local government is slightly higher (37%), while public administration usually lags behind (32%). However, the survey also reveals that many daily interactions with public institutions do generate satisfaction. For example:

— 55% of citizens feel satisfied with administrative services. — 57% say that information about those services is accessible. — 43% believe public services would improve if people filed complaints. — 41% trust that innovative ideas would be adopted.

Investing in infrastructure is not only about building roads, water plants, or electrical systems—it is about creating the conditions for millions of people to live with less uncertainty and more possibility. Every improvement in a water network, every neighborhood that gains stable lighting, every community that accesses reliable transportation represents recovered hours, reduced risks, and expanded opportunities.

The examples in Honduras and Peru, along with the new financing models supported by the United States, show how smart investments can transform daily life. When these initiatives are paired with strong environmental and social standards, they also strengthen institutions and cooperation among countries—an essential pillar of sustainable development in Latin America.

That’s why investing in infrastructure is also investing in social cohesion. Ultimately, improving it means improving lives. And when millions of people can depend on the systems that surround them, the entire region becomes stronger, more resilient, and more capable of building the future it deserves.