Private infrastructure investors target U.S. market as American Society of Civil Engineers warns of long-term funding gap

A global survey of leading investors in infrastructure has revealed that the United States ranks number one as the world’s most attractive investment destination.

The biannual survey by the Global Infrastructure Investor Association (GIIA) – which represents more than 100 of the world’s top investors and advisors in the market – produced with partners Alvarez & Marsal, found that the U.S. has further widened its appeal over other countries since last year.

The survey came as the American Society of Civil Engineers (ASCE) on Monday, May 13 published Bridging the Gap, an economic report which warned that – even with billions of extra dollars available through bipartisan infrastructure bills – the country faces a huge, long-term funding gap.

International investors have particularly ranked the U.S for the attractiveness of its digital and renewable energy infrastructure sectors. Sentiment has also turned more positive for investing private finance in the transportation sector, including airports, tolled roads and bridges, railways, and seaports.

‘The ASCE report makes clear that big increases in public funding delivered under bipartisan infrastructure bills must continue. But that alone is not enough. Private investors see a huge opportunity to help State and city governments with the private finance and expertise they need to fix their problems”, said Jon Phillips, CEO of GIIA.

“These global investors have decades of experience of working with public sector partners to finance and manage high-quality infrastructure in countries like Canada, the UK, mainland Europe and Australia. They now see the opportunity to help in the U.S., and are willing and ready to play their part.”

In looking forward for up to 20 years as to how the U.S. can close a multi-trillion-dollar funding gap, the ASCE report emphasised the potential for private investors to help municipal governments reduce the burden on public borrowing, such as municipal bonds.

It concluded that, “recent federal investments have slowed the growth of our national infrastructure deficit, however the gap has grown too large to single-handedly eliminate with any one source. Feasible, forward-looking policies paired with collaboration across all levels of government and the private sector will be necessary to further support the nation’s vital infrastructure systems and ensure they can provide service for families and businesses now and well into the future.”

GIIA’s survey of global investors found that U.S. authorities do need to address certain barriers to private investment, including a lack of clarity on funding models, a lack of visibility on future project pipelines, and further streamlining of permitting processes that enable quicker decisions and get improved infrastructure up and running faster.

“Governments around the world are in a global competition to attract private finance and skills, and that includes the U.S. To succeed, elected politicians and officials must develop their skills in building partnerships with the private sector. The appetite among investors to work with State and municipal governments to fill the funding gap is substantial”, Phillips said.

“States like New York, New Jersey, Florida and Alabama are getting it right – and the American public is enjoying the benefits. They’re opening public-private partnership offices, they’re inviting the private sector in as experts in infrastructure modernization, and we can see from example after example – that it’s working.”

Read the report here.

Pictured above, David Quam at the American Society of Civil Engineers 'Bridging the gap report launch', Monday, May 13, 2024.