By: Harvey Chandler, Director of Policy & Public Affairs
When Ursula von der Leyen professed in her 2026 State of the Union Speech that kickstarting Europe’s economy is the Commission’s number one priority, she set the task out in terms infrastructure investors recognise. In today’s economy, she said, “speed is of the essence”, and when it comes to investment decisions a permit, a grid connection or the right de-risking instrument can determine whether an investment moves ahead or it doesn’t. It’s that same premise that forms the basis of our Competing for Capital report published with lead analysis from Freshfields. The report provides cross-market analysis of policy and regulatory frameworks across nine of the world’s largest infrastructure markets, with a dedicated chapter on the European Union (EU).
For the EU, the stakes were set out two years ago by Mario Draghi, whose report looking at EU competitiveness put the additional investment need for meeting the bloc’s goals at €750–800 billion a year. He was clear in his assessment that public budgets cannot meet this target alone. But with private capital in search of markets that are most welcoming, and with clear frameworks to navigate, how does the EU measure up?
In short, there’s strong foundations in place, but much more work is needed to attract the capital inflow required to deliver against EU targets.
Progress to date
The report finds that markets are converging on a narrow set of tools to attract long-term capital. This includes regulated asset base models, CfD-style revenue support and availability-based PPPs, all of which are well known and well understood model s for attracting private capital. In that respect, Europe is where much of these toolkits are deeply embedded. For example, at member state level, France’s long tradition of utilising consessions, as well Spain and Italy’s RAB-type network regimes offer the long-duration, predictable cash flows institutional investors are seeking. Also of note is France, Spain, Italy and the Netherlands retention of standardised PPP frameworks, which set them at an advantage compared to the UK for example, which has not yet replaced its previous PFI model.
When it comes to public investment, balance sheets are being put to work in certain markets. Germany’s €500 billion special infrastructure fund is a stand out example. It also has a KfW managed €30 billion Germany Fund, which is largely employed in the form of guarantees aimed at mobilise some €130 billion of private capital.
Europe also has a relative advantage on predictability that is a valuable commodity in the quest for attracting capital. In contrast, our competing for capital report highlights continuing uncertainty over US tax credits and sector regulation as well as a need in the US for a more coordinated national pipeline of infrastructure projects.
Maintaining momentum
Despite positive developments, the field for attracting capital remains highly competitive globally as governments seek to bridge the infrastructure funding gap.
GIIA’s Spring 2026 Pulse Survey ranked Canada and Germany as the most attractive markets for infrastructure investment, with the US third, and both leaders are seeking to press on with their advantage. Canada’s first investment summit, held in Toronto this week, drew investors from nearly 30 countries and came with plans to open the country’s four largest airports to private capital; we took a look at Canada’s infrastructure moment last month. Germany follows on 20 October with its own investor summit in Berlin, led by Chancellor Merz. And for all the policy noise and speculation about the outcome of the midterms, the US retains deep investor interest, as we argued in our July piece on the tailwinds for US infrastructure, which sees these same tailwinds outlasting the midterms. A look at the Competing for Capital reports shows too why this is the case, including the US’s higher competitiveness on equity returns for utilities.
A case in point: data centres
Data centres illustrate the current contest. Most jurisdictions now treat them as strategic, given growing utilisation of their use in AI applications, and growing demand for data sovereignty.
The EU wants to triple capacity within five to seven years – the subject of GIIA’s recent paper on Europe’s data centre expansion – while US build-out continues at pace, as developers seek to address growing concerns around power usage – something often addressed through co-location of new energy generation infrastructure.
Where capital flows going forward, the EU, US, Asia or further afield, will depend largely on grid connections and permitting, bringing us back to von der Leyen’s point on the need for speed in decision making.
Where work remains
Consistency: The report’s central message is that the tools used such as CfDs, RAB and availability models no longer differentiate markets. Instead it’s about consistency in approach. This is where Europe’s record is mixed, as shown by the report’s findings. France’s uncapping of CfD negative-premium repayments, past retroactive changes to Italian renewable incentives, the shifting Dutch subsidy policy, and non-EU member the UK’s RO indexation changes are all cited as examples of “soft retrospective risk”. In these circumstances changes may be legally prospective, but ultimately alter the economics of capital already committed. Regulatory credibility and consistency in approach, the report argues, now functions as a form of capital in itself.
Pipeline: None of the EU member states covered in our paper demonstrate a single consolidated pipeline – somewhere the UK in comparison has made more progress. In the EU across most markets and sectors investors must piece together varied sources to determine where opportunities to engage exist for the to invest. Many of the new public vehicles that are emerging are financing platforms rather than sources of procurement-ready projects.
Delivery: Every European market studied has legislated to speed up permitting, from Germany’s Infrastructure Future Act to Spain’s strategic projects regime. The report judges permitting reform as an essential component of competitiveness, but warns of a gap between legislative and wider strategic ambition and administrative capacity to deliver, particularly at regional and local levels. It’s implementation, not ambition that is holding Europe back in this respect.
Mario Draghi identified slow permitting as a central barrier to delivery of Europe’s energy transition. So von der Leyen’s call for faster grid and storage build-out to support a 46% electrification target by 2040 – building on the Electrification Plan we analysed in July – will be delivered, or not, in local planning offices, so this is where more focus, and capacity building is now needed.
Regulatory fragmentation: Mario Draghi’s report argues that beyond permitting, the regulatory burden and fragmentation is holding Europe back, in alignment with our own assessment in the Competing for Capital report.
The European Commission says its twelve omnibus packages are cutting around €17 billion a year in administrative costs, and reducing the regulatory burden in tandem, which is encouraging. Likewise, moves to address fragmentation in regulation in the EU and across member states should be advanced to provide consistency in approaches that support project delivery.
Conclusion
The markets that are attracting capital are not necessarily those with the most generous headline incentives, but those that align durable regulation, predictable policy, credible permitting and a visible pipeline.
Read more in our online competing for capital report here.