Global Risks for Infrastructure – The Technology Challenge

GIIA, in partnership with Marsh & McLennan, is today pleased to launch the latest in a series of reports looking at global risks for infrastructure.

Global Risks for Infrastructure – The Technology Challenge examines the impacts that rapid technological advancement are having on infrastructure assets around the World and what it will mean for the sector in years to come.

Speaking on the launch of the Report, CEO Lawrence Slade said:

“The rapid pace of technological advancement around the world can be seen as something of a mixed blessing for the infrastructure sector. While it has unquestionably created new opportunities – and indeed in some cases entirely new markets – owners and operators of infrastructure assets have also been faced with new competition, changing demand patterns, evolving regulation and an increased exposure to cyber-risk.”

“In facing these challenges, infrastructure investors and asset operators must focus on building technological agility by developing new core skills within their teams and adapting and optimizing existing assets all while scanning the horizon for new technological advancements.”

Click here to read Global Risks for Infrastructure – The Technology Challenge

Exciting times ahead for Infrastructure Investors

By Jon Phillips, Director of Corporate Affairs

After such a difficult year for many, including those involved in infrastructure, it is pleasing to be able to end the year with a sense of optimism. We will enter 2021 with the prospect of a Biden administration committed to Build Back Better and unlocking the political  impasse on US infrastructure; the European Commission has set out its plans to deliver its Green New Deal and the UK has published its long awaited National Infrastructure Strategy as a vital step towards delivering on its Net Zero targets.

Here in the UK, private capital has helped to develop new energy infrastructure for decades, illustrated by the largest installed capacity of offshore wind in the world, with nearly £19bn invested in UK offshore wind energy between 2016-2021. With a legally binding commitment to reach Net Zero emissions by 2050, the UK appears strongly placed to attract the investment required to decarbonise not just its energy sources, but all sectors of the economy, including buildings and transport.

Infrastructure investment will also lay the foundation for a sustainable recovery to the pandemic, delivering on the ‘Levelling Up’ agenda. This is because infrastructure investment delivers multiples of the original investment in terms of its wider economic returns, with projects distributed across the country.

However, PwC’s new report Unlocking Capital For Net Zero Infrastructure, commissioned by GIIA, identifies that £400 billion of investment will be needed over the next 10 years to achieve Net Zero commitments – twice the current rate of investment. That is why the UK Government and Regulators need to think hard about how to create the right investment environment to attract the international capital necessary to deliver such an ambitious programme.  And, according to the latest Global Infrastructure Index (a survey of 20,000 people from around the world published by Ipsos MORI in partnership with GIIA) the general public agrees. The 2020 survey found that public sentiment supports the positive role that private investors can play in renewing and rebuilding our infrastructure.

In Great Britain, 82% of those surveyed agree that investment in infrastructure is vital to the country’s future economic growth, whilst 69% of responses favoured the prioritisation of infrastructure in the government’s planning for the post COVID-19 recovery. Two thirds of the population do not believe we are currently doing enough to meet our infrastructure needs as a country, and support for private investment is strong with those in favour of private investment if it means the country gets what it needs, outnumbering those against by 7 to 1.

To ensure investors have the confidence to deploy private capital in UK infrastructure, it is critical that the government sets out a clear, sector-by-sector roadmap and strategic regulatory guidance from which investment can be steered cohesively towards achieving long-term policy objectives, whilst at the same time striking the right balance between consumer interests today and in the future.  GIIA’s recent report; The Future of Regulation sets out some recommendations which we hope will be helpful in shaping that future regulatory framework and building on what has been a tremendous success for the UK over the last 40 years.

The much-anticipated release of the National Infrastructure Strategy, including the creation of a new National Infrastructure Bank, is a welcome step forward. There are exciting times ahead for those with an interest in financing and managing sustainable infrastructure for the benefit of future generations and no time to lose!

Raconteur ‘Future of Infrastructure’ Special Report

GIIA is pleased to once again be the Publishing Partner for Raconteur’s ‘Future of Infrastructure’ special report, appearing in today’s The Times, alongside contributions from other members including Macquarie, ISquared and Deloitte.

Click here to read Raconteur’s ‘Future of Infrastructure’ special report. 

No time to lose in the global race for capital

By Lawrence Slade, CEO, GIIA 

With the not-so-small matters of Brexit and Covid-19 to deal with, it is perhaps not surprising it has taken time for the Government to lay out how it will turn the Prime Minister’s promise of a once-in-a-generation infrastructure revolution into reality.

But much like the proverbial London bus, three important announcements have come in a matter of a few weeks and more are expected. The Prime Minister’s ten-point plan for a green industrial revolution, the Spending Review and the National Infrastructure Strategy have given us a glimpse of how Government wants to use infrastructure investment to put the UK on course to reach net zero emissions by 2050, strengthen economic resilience and create thousands of new green jobs.

This is, however, just a start. There are substantial financial and technological challenges ahead. Success will rely on a coordinated approach that drives investment and innovation across the economy and allows the private and public sectors to work together at pace.

As Government acknowledges in its new National Infrastructure Strategy, unlocking sufficient private investment will be essential given the scale of the task ahead. At a moment where the Government’s balance sheet is stretched, a recent report from PwC, commissioned by Global Infrastructure Investor Association (GIIA), estimated that we would need to spend around £40bn each year, for ten years, to reach the net zero goal in the UK. That’s twice the current rate of investment. Mobilising capital on such a scale will put a premium on using the competitive dynamic of the private market to ensure projects are well managed and delivered efficiently. We will need to double down on the ingenuity of the private sector to come up with new solutions to age old problems.

Key to driving greater levels of investment in infrastructure is certainty – on what Government is seeking to achieve and on where it wants the market to focus. One way Government can provide this certainty is by translating its high-level vision into more detailed sectoral strategies. Government is aware this is needed and is expected to make major announcements in the weeks and months to come, including the Energy White Paper, Transport Decarbonisation Plan and Heat and Buildings Strategy. It is critical that these set out in more granular terms how Government plans to drive forward key technologies, such as clean hydrogen to carbon capture, utilisation and storage.

In addition, Government needs to set out how it will draw private investment into major, new infrastructure projects. The UK has a history of finding innovative ways to bring together the public and private sectors to deliver best value for the taxpayer and consumer. The Government is already taking action. The newly announced UK National Infrastructure Bank should provide a mechanism to attract capital to projects that would otherwise not go ahead, “crowding in” private investment to emerging technologies alongside direct support from the taxpayer.

But the jury is still out as to whether the combination of the Regulated Asset Base model, Contracts for Difference and the new Bank will provide sufficient tools in the toolbox for Government to leverage the private capital necessary to deliver on its infrastructure pipeline. Despite pioneering the Public Private Partnership (PPP) model, copied and utilised to great success around the world, HM Treasury remains reluctant to revisit the Private Finance Initiative. GIIA will shortly be bringing forward a report based on global best practice that sets out how the right infrastructure financing mechanisms can promote greater levels of competition, harnessing the efficiency and innovation of the private sector and building a stronger evidence base to ensure we learn lessons and consistently improve delivery over time.

But even if Government takes the steps necessary to increase certainty, it will also need to re-establish the historical strengths of the economic regulatory regime that has unlocked much of the country’s infrastructure investment over the last 30 years. A focus on short-term outcomes, often at expense of long-term policy objectives such as climate change, has undermined the UK’s reputation as the pre-eminent destination for international investment.

Government is taking steps in the right direction. It has established a new Office for Investment in chaired by Lord Grimstone, Minister for Investment – a welcome addition that will help bridge the gap between Government and the investment community – and it has signalled a willingness to update the regulatory regime for a new age.

The UK’s approach to regulation has been copied across the world for good reason: it has driven high levels of investment and substantial improvements in efficiency service quality. Yet it faces new challenges from net zero, rising customer expectations and digitisation. An update is overdue.

We can build on strong foundations. GIIA’s recent report, ‘The Future of Regulation’, identifies four core principles which should frame strategic, financial and structural updates to the regulatory framework. These include a clearer division of roles and responsibilities between Government and regulators, a greater focus on intergenerational equity, strong incentives for innovation over the long-term and the streamlining of regulation to reduce both the burden on companies and costs for consumers.

There is no time to lose. We need to make rapid progress over the next decade, and the UK is in a global race for capital. The coming year will be pivotal to unlock the investment needed for the UK to build back better.

New Report – The Future of Regulation

The regulated utility sector is a core pillar of the UK economy. Over the last three to four decades, it has overseen the transformation of utilities that deliver many of our essential services.

However, while the UK’s system of economic regulation is often praised as an example of best practice, there have been a number of shifts more recently that have impacted the effectiveness of the regulatory regime in delivering new investment.

In the much anticipated UK Spending Review, delivered today by Chancellor of the Exchequer Rishi Sunak, the Government itself acknowledges a need to provide a ‘clear and enduring framework for investors and businesses’ to support the model of independent economic regulation and GIIA welcomes the Chancellor’s commitment to preparing a policy paper on this topic to be shared in 2021.

‘The Future of Regulation’ lays out a set of core principles that we believe can effectively and fairly govern the UK’s regulated utility sector for decades to come, and will form a key part of our engagement with Her Majesty’s Treasury on this important policy area in coming weeks and months.

Click here to read The Future of Regulation

New Report – Unlocking Capital for Net Zero Infrastructure

GIIA, in partnership with PwC, has published a new report: ‘Unlocking Capital for Net Zero Infrastructure’. Based on interviews with infrastructure investors, the report identifies an urgent and immediate need for additional investment in order for the UK to meet its ambitious net zero targets.

Based on PwC research, it is estimated that £400bn of investment will be needed over the next ten years to achieve net zero – double the current rate.  The report concludes that private sector investment will be critical for power systems, buildings and industry, transport, and digital infrastructure but highlights the current lack of a policy framework to support the long-term low-risk capital required to hit targets.

GIIA CEO Lawrence Slade, speaking on the release of the report, said:

“Private capital stands ready to help turn the UK’s ambitious net zero agenda into reality through the delivery of environmentally and socially responsible infrastructure, but investors need additional clarity from Government around the policy and regulatory framework that will cover these investments.”

“The delivery of a clear and compelling Net Zero infrastructure roadmap is a crucial first step in unlocking the investment needed to decarbonise our economy and ensure a cleaner, greener future.”

Read Unlocking Capital for Net Zero Infrastructure

Click here to read the press release

Position vacant – Communications & Events Executive

Global Infrastructure Investor Association (GIIA) is the voice of private investors in infrastructure. Based in London we have more than 50 investor members, who manage more than $780bn of infrastructure assets covering utilities, renewable energy, transport, digital and social infrastructure.

GIIA is seeking applications from interested candidates to join their small, but hard working, team as a Communications & Events Executive to increase awareness of our work both externally and within our membership and manage our programme of global events on a range of topics.

Reporting to the Head of Communications the successful applicant will be responsible for:

  • Writing and editing marketing material, website and social media content, press releases, event invitations, member newsletters and internal briefing notes
  • Managing the office’s global events calendar for both online and in-person (when permitted) events. This will include managing guest lists and invitations, overseeing event logistics and post-event follow up.
  • Using the office’s communications grid to ensure scheduled communications to members are distributed on time
  • Delivering communications to keep members aware of upcoming events and opportunities for engagement
  • Media monitoring and social media tracking
  • Supporting colleagues with any reasonable requests for support

Essential Criteria

  • Previous communications and/or experience in a professional environment
  • Exceptional written skills
  • Highly organised with superior attention to detail
  • Good knowledge of social media platforms (Twitter and LinkedIn)
  • Willing to learn and open to receiving constructive feedback
  • Sociable and collaborative

Preferable Criteria

  • An appreciation of the role private investment plays in delivering major infrastructure
  • Previous experience with design programs (Photoshop / InDesign etc)
  • Experience with WordPress or similar content management systems

In addition to a competitive salary, employees receive pro-rata 25 days annual leave and can participate in a defined contribution pension scheme.

GIIA are following all Government guidance in relation to Covid-19, as such this role is currently home-based, with plans for a managed return to the office (near London Bridge) when possible, although our expectation is that we will maintain a flexible approach to home working

Closing Date: 11 November 2020

Interview/Start Dates

Interview and starting date will be confirmed individually with relevant applicants.

Application Details

In addition to your CV, please send a cover letter (1 page max) outlining your suitability for the role, to Tim Horan at thoran@giia.net

GIIA welcomes applications from people from all backgrounds, with all different kinds of life experiences.

Please note interviews may take place prior to the closing date. Unfortunately, due to the volume of applications, we will only be able to reply to those shortlisted for an interview.

 

Global Infrastructure Index 2020

GIIA has today released the results of the fifth annual Global Infrastructure Index (GII)- the largest survey of its kind gauging public attitudes to infrastructure around the world. In 2020, almost 20,000 people, across 27 countries, were asked a number of questions about the country’s record on infrastructure, investment priorities and the role of the private sector.

Key highlights from the 2020 Global Infrastructure Index include:

  • 79% agree that investment in infrastructure will create new jobs and boost the economy; 4% disagree.
  • 68% believe Government should prioritise infrastructure investment as part of the Covid-19 economic recovery; just 8% disagree.
  • There has been an increase in support for private investment among people if it helps their country get the infrastructure it needs with 68% in favour (up 4 percentage points from 2019) and only 8% opposed (down from 13% in 2019).

To view the full survey results please click here

To view GIIA’s press release please click here 

To view GIIA’s infographic please click here

 

 

GIIA Infrastructure Pulse Survey – Q3

GIIA, in partnership with Alvarez & Marsal, has today released the Q3 GIIA Infrastructure Pulse Survey for both the European and Americas markets. This quarterly survey aims to provide a regular temperature check of sentiment in the sector and to monitor emerging trends.

In Europe, the Q3 Pulse Survey shows an improvement in investor sentiment among those firms currently fundraising when compared to Q2, with the Nordics continuing to be the region viewed most positively by investors. In terms of sector outlook, respondents were increasingly bullish about transactions in communications infrastructure (reflecting increased appetite for, and number of, opportunities in fibre, telco towers and datacentres) as connectivity remains critical as people work from home. Sentiment also remained strong in the renewable generation, biomass and EfW sectors. In Europe, the importance of ESG continues to increase in terms of its significance to investment decisions.

Meanwhile, the Americas Pulse Survey also showed an improvement in investor sentiment among those firms currently fundraising and, like Europe, the sector viewed most positively was communications technology. However, most respondents expressed a more positive view in Q3, as compared to Q2, of the anticipated timeline for portfolio yields to return to pre-COVID-19 levels.

Click here to view the Q3 GIIA Pulse Survey – Europe

Click here to view the Q3 GIIA Pulse Survey – Americas

GIIA is grateful to Alvarez & Marsal for their partnership on this project.