May 2019
The infrastructure gap is significant - both in value and impact terms
Summary: It is widely acknowledged that infrastructure investment globally is currently well below what is needed to meet anticipated economic growth projections and aspirations. It is required in developing and developed economies alike. Factors such as the drive toward decarbonization and digitalization mean the need goes beyond maintenance, to replacement and refurbishment of existing infrastructure
As the balance sheets of both national governments and corporates have become constrained over the past decade, the opportunities available for private-sector investor involvement have expanded greatly. This is particularly true for greenfield infrastructure investors, as financing the construction of new-build assets can be unattractive, given the lag between capex and earnings.
Greenfield infrastructure can bring a number of clear benefits to an economy; key among them is economic stimulation. Direct economic stimulation also has a multiplier effect, generating additional benefits to a society, such as secondary job creation and improved social services. Other direct beneficial impacts also arise, such as creating cleaner energy.