Consensus estimates that an additional $57 trillion investment in global economic and social infrastructure is required through 2030 to just keep pace with global GDP growth rates.
Traditional sources of financing - public funding through government budgets and commercial bank project finance loans are not going to be sufficient to meet this additional financing requirement. Fiscal budget deficits and Debt service levels are going to restrain public funding options. Regulatory capital treatment will deter new and increased commercial bank participation in project finance.Pressures on multilateral development banks priorities and funding sources will limit the flow of capital from these institutions.
New private sector investors need to be attracted to these investment opportunities. PPP projects need to be encouraged. Institutional investors, asset managers and owners; pension funds; sovereign wealth funds; insurance companies and even innovative crowd funding initiatives have to be tapped to fund this critical infrastructure financing gap.
The barriers and inhibitors to attracting these new investors need to be addressed as a matter of urgency. Data driven discussions, communication and debate needs to occur urgently between all stakeholders to get this process accelerated. Infrastructure needs to develop as true capital markets asset class with appropriate liquidity and tradeable benchmarks.
infraccess - smart data for infrastructure