Insights

In 2021, private investment in infrastructure projects in primary markets recovered to its pre-pandemic level but remains stagnant and far shy of what is needed to close the infrastructure investment gap.

In 2021, global green private investment in infrastructure projects in primary markets rose to a record-high share of 60%, but this trend needs to accelerate and expand beyond renewables to meet climate goals.

Green investment in infrastructure outside of renewables is limited. While renewables represent almost 90% of total green private investments in infrastructure projects, green investment in other sectors only represent 14%.

Co-financing provide a supportive enabling environment that minimises risk exposures, catalysing private co-financing for infrastructure in middle- and low-income countries.

The green bond market has seen exponential growth since its inception in 2007. In 2020, green bonds represented 60% of bond issuances for private investment in sustainable, primary infrastructure globally, mostly concentrated in developed regions.

Preliminary evidence shows superior performance for some sustainable infrastructure investments in comparison with other infrastructure sector investments

Private investors have shifted away from non-renewables in both developed and developing markets. The appetite for renewables is stronger in developed markets.

Low private investment in the social, telecommunications, water and waste infrastructure sectors

Private investment in infrastructure is dominated by the energy and transport sectors

Infrastructure project preparation capacity is weak across most regions of the world. It is critical to strengthen these capabilities to address one of the major bottlenecks in attracting private capital to infrastructure, which is the lack of a bankable, investment-ready pipeline of infrastructure projects

For investors seeking to diversify and optimise their portfolios, infrastructure debt and unlisted infrastructure equities are very strong options, according to long-term data

Unlisted infrastructure equities have provided higher risk-adjusted returns to investors than an average global listed equity. With greater recognition of its attractive performance, investors’ demand has increased, and returns have aligned over time with its lower risk or volatility

Infrastructure debt has a highly attractive and resilient risk-return profile for investors. Expected losses are particularly low given high recovery rates in cases of default

Private investment in infrastructure projects in primary markets has been stagnant for seven years running

Private investment in infrastructure projects in primary markets was resilient to COVID-19 pandemic shocks

Public investment in infrastructure is more effective in increasing economic output than other types of public spending

Investment in public transit infrastructure can contribute to creating more inclusive societies. Public transit services are more often used by lower-income households, women and ethnic minorities.

Regulatory capital frameworks require banks and insurers to put aside more capital for infrastructure investments than is warranted by their historical credit performance

Infrastructure equities have an attractive risk-return profile providing a competitive alternative to other investment options.