July news, insights & events
All the latest from GIIA and the Infrastructure Industry
Networking & fireside chat with White & Case - 6 September
Join us for drinks and a discussion between our CEO Jon Phillips and Partner Tim Sheddick about current market trends.
New GIIA CEO steps up engagement in North America
In July we convened Canadian members and strengthened state ties at the National Governors Association summer meeting.
Public and private collaboration key to net zero efforts
Writing in City AM, Jon reflects on the UK Chancellor's Mansion House speech and a new US-UK climate initiative.
GIIA featured in Infrastructure Quarterly Q2 2023
Jon spoke with the CBRE team about infrastructure's resilience in a high inflation, high interest rate environment.
UK foreign influence registration regime now law
In our latest guest post, Paul Butcher of Herbert Smith Freehills talks through the FIRS' implications for investors.
5 takeaways from our podcast with Water UK
We sat down with the business group’s Chief Executive David Henderson to talk investment, regulatory reform and PR24.
Talking Global Infrastructure episode 13: The direction of water
In this episode, GIIA's Director of Corporate Affairs Simon Montague is joined by David Henderson, recently appointed Chief Executive Officer of Water UK, to discuss the industry’s recent apology to customers, how private investment has driven improvements in water quality and must continue to do so in the future, and the importance of having the right regulatory system to continue to attract private capital.
From the CEO
As I have seen first-hand throughout my career in the aviation and nuclear sectors, and now at GIIA, infrastructure assets usually sit at the interface of public sector policy and private sector delivery. It’s for this reason that political dynamics play a significant role in shaping infrastructure investment outlooks, and why investors need to be adept at navigating these dynamics to optimize portfolio values and inform investment strategies.
Right now, everywhere we look, there is no shortage of politics at play in GIIA’s core markets. Most observers anticipate a general election in the UK some time in 2024, with speculation switching between a May or November polling date. Labour and the Conservatives are busy working on their manifestos, with both keen to show ambition in delivering net zero and stimulating economic growth through investment, but both working in the context of a cost-of-living crisis, mounting public debt and little appetite for tax rises. It is clear from our engagement with both that they recognize the importance of attracting private capital to help deliver their infrastructure ambitions, but how this plays out in terms of tangible policies is still unclear.
June 2024 will see EU parliamentary elections, the results of which will not only determine the balance of power in the parliament, but also the make-up and agenda of the European Commission. And of course, November 2024 will see the next US presidential election. After the success of the Bipartisan Infrastructure Deal (IIJA) in 2021, it remains to be seen whether the consensus around fixing the US’ ailing infrastructure remains a political priority, and if so whether the polarized politics of the US will support or obstruct the continued roll out of the Infrastructure Investment and Jobs and Inflation Reduction Acts.
Fundamentally, governments and societies want to see improved, smart, climate resilient infrastructure that enhances the economy and environment. The challenge is that, to pay for it, either cash strapped governments have to increase public debt or raise taxation, or customers (and regulators) have to accept rises in bills. At times of high interest rates and inflation, the politics of funding infrastructure becomes more complicated and polarized. And as the impacts of the energy transition are felt by communities and economies, the pace and political consensus around delivery of net zero priorities will undoubtedly be called into question.
Infrastructure will remain a key political battle ground over the coming months, and we will continue to monitor, advise and advocate on behalf of our members accordingly.
Get Involved
New York Member Reception
Members are invited to join us for a lunchtime reception at McKinsey's offices, Please contact Sophia Taylor for more information and to register.
Date: 12 September 2023 I Location: New York, US
GII Net Zero Roundtable New York
Following our lunchtime reception, we're hosting a roundtable discussion at McKinsey's office in New York. Contact Sophia Taylor for more information.
Date: 12 September 2023 I Location: New York, US
Washington DC Reception
Members and stakeholders are invited to join us alongside Sullivan & Cromwell. Please contact Sophia Taylor for more information and to register your interest.
Date: 13 September 2023 I Location: Washington DC, US
Clean Energy Investment Summit
Members are entitled to discounted access to the Infocast US summit examining trends in the renewables, alternative fuels and clean tech sectors. Please contact Sophia Taylor for more information.
Date: 2 October 2023 | Location: Houston
Annual Conference
Members can now register for our annual conference in London sponsored by Ashurst and KPMG.
Date: 14 November 2023 I Location: 1 Duval Square, London E1 6PW
GIIA advocacy spotlights
US
David Quam, US Representative
This month we headed to the National Governors Association summer meeting in Atlantic City, New Jersey, at which the group emphasized the need to accelerate project delivery. The call comes as states work to leverage more than $1.4trn in energy, transportation, water and telecommunications funding linked to the Infrastructure Investment and Jobs Act.
Governors created a bipartisan Energy and Infrastructure Working Group earlier this year to develop recommendations to streamline the permitting process. While some recommendations became part of the permitting reforms passed in the debt ceiling negotiations earlier this year, governors agreed that more needs to be done to speed up permitting and build projects. The working group is chaired by Utah Governor Spencer Cox and Louisiana Governor John Bel Edwards.
Elsewhere, the Biden administration released funding allocations for the $42.5bn Broadband, Equity, Accessibility and Deployment grant program (BEAD) last month. The allocations begin a six-month shot-clock during which states must submit their plans to provide broadband access to all Americans.
Nine states received over $1bn with Texas receiving the highest allocation at more than $3.3bn. The Federal Communications Commission estimates that more than 8.5 million locations cannot access high-speed internet.
UK
Chloe Gibbs, Policy & Public Affairs Manager
Advocacy highlights for July included a roundtable for GIIA investor members with the Exchequer Secretary to the Treasury. The discussion provided an important forum in which to unpack the opportunities and challenges facing investors in the UK with senior government officials. Many thanks to all those who contributed. On the policy front, we are currently developing a response to the government’s consultation on the Strategy and Policy Statement (SPS) for energy. Members are encouraged to get in touch to share thoughts on our draft submission.
Elsewhere, alongside other GIIA Working Group leads, I am undertaking a scoping exercise to refresh objectives for our UK Policy Working Group. I would encourage any members that have not already had the chance to do so, to complete the survey. This valuable input will help to inform areas of future focus for the group and so is a fantastic way to ensure your views are heard.
This month saw the Chancellor deliver a much-anticipated Mansion House speech. A strong focus on regulatory reforms and efforts to unlock greater investment from pension funds formed the basis of the address. Parliament rose this week for the Summer Recess, and sights are now set on the Autumn Statement, respective Party Conferences and anticipated reshuffles of both the Labour and Tory frontbenches.
I was also delighted to have the opportunity to attend the APPG on Infrastructure’s ‘In conversation with the RH Chris Skidmore’ event, coordinated by the Institution of Civil Engineers. The discussion addressed a range of themes including the “whole of society” approach that will be required to achieve net zero, as the “economic opportunity of the century.”
Amidst shifting global sands, the extent to which the UK can compete with attractive policies such as those contained within the US Inflation Reduction Act (IRA) was also assessed, along with the vital role the private sector will play in delivering net zero.
A key takeaway from the event was the progressive shift we have observed in the overarching net zero narrative, from a being a purely environmental aim, to a far-reaching and multi-faceted objective that requires cross-society collaboration and mobilisation.
EU
Harvey Chandler, Senior Policy & Public Affairs Manager
A welcome development to kick-off July’s update: the European Parliament’s energy committee has effectively endorsed a Commission proposal for member states to remove the inframarginal generators revenue cap, following our recommendations. Analysis published by the Commission in May shows that the cap undermines a shift towards use of longer-term arrangements that help establish energy price certainty, such as power purchase agreements (PPPs), uptake of which has fallen since the cap’s introduction.
The committee also aligned with our position on contracts for difference, determining that their use shouldn’t be mandatory for member states, and should instead remain one of several tools that can be deployed as part of energy agreements. We now await a final vote on the agreed position in September, as well as a conclusion to member state negotiations in the Council before inter-institutional negotiations begin.
Elsewhere this month, through our discussions with the Commission's international partnerships directorate, DG INTPA, we are now arranging an opportunity for the directorate to present to GIIA members on the role played by INTPA, the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) in supporting investment in digital, energy and transport networks across emerging and developing economies, including through guarantees and other financial instruments. More information will follow shortly. To express your interest in attending, please contact me at hchandler@giia.net.
Fitfor55 took a big step forward in July following the adoption of the Alternative Fuel Infrastructure Regulation (AFIR), with specific deployment targets set for EV and hydrogen refuelling for 2025 and 2030. The regulation also introduces requirements for airports and maritime ports to provide electricity to planes and ships respectively. You can find out more on the Council’s website. FuelEU Maritime has also been adopted, introducing new GHG requirements and outlining how funds raised from FuelEU penalties will be used to help decarbonise the sector. Countries are expected to outline how they will work to meet these and other targets across both transport and energy sectors in their updated draft 2023 National Energy and Climate Plans which have started to be published by the Commission.
This month also saw the Foreign Subsidies Regulation (FSR) implementing regulation (IR) adopted. The regulation requires that companies need to retain relevant information on an ongoing basis to determine exposure to notification requirements for M&A transactions or public tenders. In a departure from the original proposals, however, disclosures now only need to include high-level overviews of financial contributions deemed to be foreign financial contributions. The EU retains a level of ambiguity over what constitutes a foreign financial contribution, with a broad range of items included, from direct grants to low interest and interest free loans, tax incentives and more. DG COMP has provided a Q&A on the regulation.
Turning to the European Council, Spain’s agenda for the presidency looks set to remain somewhat stable, after the likelihood of incumbent Pedro Sanchez’s party remaining in government in Spain increased following Sunday’s election. Whilst PSOE which Sanchez leads isn’t the largest party after the vote, it currently looks the most likely to be able to form a government with support from moderates and those on the left, with the conservative People's Party unlikely to get additional buy in to an alternative coalition that includes the more right-wing party Vox. If correct, this is likely to mean Spain’s agenda for the Council will include proposals to advance electricity market reforms and reindustrialisation.
Making the most of your membership
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Infrastructure around the globe
Bank invests £250m as cornerstone lender in major broadband roll-out deal
nexfibre is aiming to connect five million homes not currently served by major providers by 2026.
EC recommends withdrawal from Energy Charter Treaty
The European Commission statement means growing uncertainty for EU investors.
Wind and solar outperforming coal on US grid this year
Just five years ago, coal’s share of power generation was quadruple that of wind and solar combined.
