Infrastructure Knowledge Exchange

The third meeting of the G20 Infrastructure Working Group (IWG) was held in Sydney, Australia from the 4th to the 6th of June, with the GI Hub playing an active role.

As outlined earlier in this blog series, private investors are looking for reliable returns to justify the risks that they are taking. Financing and procurement of cross-border projects will often be more complex than national projects due to the scale of the project and compounded risks, and the financial returns may be more uncertain than for national projects.

Risks can be hard to define, manage and mitigate. In infrastructure projects that cross regional or national borders and involve multiple parties from both the public and private sector, these risks may be amplified.

On 12 July 2018 the GI Hub’s COO, Mark Moseley, joined a webinar panel on blockchain and its applications for infrastructure, hosted by the International Project Finance Association (IPFA). Blockchain is the technology that underpins Bitcoin and other similar ‘cryptoassets’, such as Ethereum and Ripple. Its potential, and the recent volatility of cryptoassets, has made the technology one of the most hyped and misunderstood technologies in the market.

The Global Infrastructure Hub and Turner & Townsend Launch PPP Contract Management Tool. Effective management essential to unlocking value behind infrastructure PPPs.

On 22 July, at their meeting in Buenos Aries, the G20 Finance Ministers and Central Bank Governors voted to renew the mandate of the Global Infrastructure Hub for another four years.

When we as consumers decide to invest our money—whether through shares, bonds, or other instruments—we look at whether our investment will deliver a solid financial return. It makes sense then that the same risk-return principle is applied to investments in infrastructure.

Infrastructure can often be used as a pawn in the political chess game, not only at a federal level between political parties, but at a foreign policy level too. It’s crucial that a cross-border infrastructure project has political support and cooperation from all parties involved, and that it’s being supported not for political gain, but to further regional development. A lack of strong political leadership can be detrimental to a cross-border project, and weak capacity can be a deterrent to investors.

With a growing global focus on attracting private sector investment into infrastructure and utilising the public-private partnership (PPP) model, it is crucial that governments focus on the entire duration of a PPP contract. Efforts need to extend beyond ‘achieving financial close’ and beginning construction or ‘cutting the ribbon’ for commencement of services.