FUNDING INFRASTRUCTURE FIT FOR THE SUSTAINABILITY CHALLENGE
When infrastructure finance market chroniclers look back at 2018, they may well see it as the year a major realignment began in both geographical and sector opportunities. With Brexit unresolved and the once highly important Turkish infrastructure market at risk of implosion, stakeholders who still have large amounts of capital to deploy, have been forced to look elsewhere for opportunities on a continent where traditional pipelines have been exhausted and operational asset prices have become prohibitively expensive.
But the infrastructure challenge has not gone away and funds and developers have this year found increasingly innovative ways to revitalise traditional pipelines and develop opportunities in new parts of the asset class. This is particularly important in a year when the need for workable but fast solutions to the imminent challenges of climate change and the necessary radical societal changes which go with it have become even more pressing with water shortages and emissions targets particularly to the fore this year. Maintaining the existing economic balance in a market like Spain, where this year’s European Infrastructure Finance Summit will take place, will require an investment in new infrastructure tailored to the vagaries of the climate reality. This also means facilitating growth in a sustainable way, through the construction of bigger but more smartly managed roads and airports, accessible charging infrastructure for electrical vehicles and better management and delivery of both the water supply and waste management.
All of these themes are now front of mind for governments and their political opponents as they enter one of the most politically polarised elections the European Union has ever seen. And the role of infrastructure investors has become unavoidably political with talk of renationalisation and criticism of the PPP structure challenging practitioners to show how the market has and still can deliver outcomes which are beneficial to the taxpaying public while remaining a viable investment option for LPs and GPs.
This is why it became clear to us that Madrid, which is home to many of the developers devising the solutions to these challenges all over the world, was the obvious place to bring investors and other infrastructure stakeholders together at this year’s EIFS. This October we will discuss how these players have changed their approach for a changed market and how they and other stakeholders can build and maintain leading positions in the new landscape.
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