Global investors help to close infrastructure funding gap as asset portfolio tops US$2 trillion
Members of the Global Infrastructure Investor Association (GIIA) have more than US$2 trillion of assets under management, reveals new Global Infrastructure Annual Assets Report
Private investors are increasingly bridging the gap between what governments can afford and what citizens expect in terms of the economic, social and environmental benefits resulting from infrastructure modernization.
The continuing growth of infrastructure as an investment class, and the ever-increasing appeal of private investment and expertise as an alternative to public funding, is reflected in a new report on the global scale of private infrastructure investment.
The Global Infrastructure Assets Report 2024 – produced in partnership with professional services partnership EY - reveals that GIIA’s growing membership now has a total of US$2.04 trillion of assets under management, with 2,869 investments around the world.
The value of members’ assets has increased by 50% over the last two years and has quadrupled since the survey started in 2017, reinforcing GIIA’s role as the voice for the world’s leading investors.
Renewables and transport are the most popular sectors in terms of the number of assets that members own worldwide, while digital infrastructure is the fastest growing, with total assets having multiplied six-fold in six years.
Jon Phillips, chief executive of the Global Infrastructure Investor Association, said:
“Private investors are playing a leading role in delivering society’s infrastructure expectations, as the continuing growth in their investments and assets around the world shows. Governments cannot achieve their ambitions for infrastructure through public funding alone. Our members will continue to play an ever-increasing part in financing, delivering and managing modern energy, transport, water and digital networks.”
Independent advisors say the need for governments to work more closely with private sector finance and expertise in the years ahead is clear and inescapable.
In the United States, the American Society of Civil Engineers has warned that, even at present elevated levels of investment in infrastructure, the country faces a £2.9 trillion funding gap over the next decade. That gap would increase further to $3.7 trillion if the U.S. returns to previous, lower levels of investment after the Infrastructure & Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA) expire at the end of 2026.
In the United Kingdom, the National Infrastructure Commission has estimated that private sector investment needs to increase from £30-40 billion per year over the last decade to £40-50 billion per year over the next two decades, making up most of overall infrastructure investment.
Long-term, the European Union has been a much more attractive investment destination for global investors compared with the similar sized United States. Investors have stakes in more than 730 assets within the E.U. compared to fewer than 450 in the U.S.
Jon Phillips added:
“The U.S. has recently overtaken Europe as the world’s must attractive destination for global investors, thanks to huge incentives packages included in President Biden’s infrastructure bills. But the country has still to undergo cultural change at federal, state and local government levels, to truly view private investment as an alternative to yet more public debt.”
The report starkly illustrates U.S. dependency on public ownership, with investors having stakes in just six airports in the country, compared with 21 in mainland Europe and the UK. Similarly, investors have stakes in fewer than 130 renewables assets in the U.S., compared with more than 470 in Europe and the UK.
Jon Phillips concluded:
“Our members are at the forefront of ambitions to achieve net zero, including the transition to cleaner energy, decarbonization of transport, the digital revolution and desire for clean and resilient water networks. They have project management skills, expertise and significant access to global best practice to be able to innovate, build, operate and maintain assets.
“Governments and regulators who work in partnership with global investors can develop opportunities to modernize and build infrastructure that creates jobs and economic growth and protects and improves the environment.”
Download and read the report at the top right of this page.