10 May 2019

Infrastructure investment gap large and growing

10 May 2019

Infrastructure investment gap large and growing

 

More investment in infrastructure spending will be needed to meet a growing gap both in Australia and globally.

This was one of the key messages delivered by GIobal Infrastructure Hub (GI Hub) CEO, Marie Lam-Frendo at her keynote speech at the Committee for Economic Development Australia (CEDA) Productivity in Infrastructure Development and Delivery event in Sydney, Australia on 10 May 2019.

Lam-Frendo highlighted the opportunity for infrastructure to boost economic growth and productivity globally. Using the GI Hub tool Outlook, Lam-Frendo stated that based on current trends US$79 trillion is required by 2040 to meet the global infrastructure investment demand. The Outlook tool forecasts an investment need of US$94 trillion by 2040 if countries are to increase their performance. This leaves a gap of US$15 trillion which represents public and private investment for expansion and replacement of capital expenditure infrastructure assets.  

Using insights from the 2019 GI Hub/EDHEC Global Infrastructure Investor Survey, Lam-Frendo shared that around 36 per cent of institutional investors now consider ESG to be a first order question, possibly at the expense of performance in infrastructure investment. This is more than double the 17.2 per cent reported in the 2016 survey.

The global investor survey also revealed Australia was the second most attractive market for infrastructure investment among advanced economies, behind the USA, followed by the UK, Germany and France.

Lam-Frendo concluded her keynote discussing Japan’s G20 priority on quality infrastructure investment, stating that a set of principles were to be agreed in June.

These principles have since been endorsed and are available here. To support the G20’s focus on quality infrastructure the GI Hub has worked closely with the World Bank and the OECD to deliver the Quality Infrastructure Investment Database. This database is a global resource for infrastructure materials and facilities relating to quality infrastructure investment.

View the keynote speech here

Listen to the moderated discussion here