Source: GI Hub based on IJ Global data.
Note: Note that 2022 figures are preliminary and are subject to upward revision as additional transactions are added to the database.
According to our latest report, Infrastructure Monitor 2022, private investment in infrastructure continues to be resilient in the face of heightened political and economic uncertainty, coupled with the long-lasting impacts of the COVID-19 pandemic.
After the initial shock of the pandemic in 2020, private investment in infrastructure projects in primary markets recovered in 2021 to be on par with its 2019 level. This recovery was largely the result of growth in the regions hardest hit during the pandemic – Oceania, Latin America, and Asia – which all saw investment bounce back following steep regional declines in 2020.
Our analysis of preliminary data suggests that private investment in infrastructure projects continued to be resilient in 2022. Last year Q4 was the strongest quarter, reflecting the typical quarterly profile when levels of investment traditionally pick up as the financial closure of deals accelerates; on average, around a third of annual private investment in infrastructure projects close in Q4. In addition, the data shows that investment in the first three quarters of 2022 surpassed levels during the same period for the previous five years.
However, the longer-term story of private investment in infrastructure is one of stagnation. Private investment in infrastructure projects in primary markets has been stagnant for eight years running and remains in the order of USD150-175 billion each year – far shy of the trillions of dollars required to close the infrastructure investment gap. This gap is even larger in middle-and low-income countries (MLICs) and it is particularly worrying that private investment in infrastructure projects declined for the third consecutive year in 2021 in these countries where investment is needed the most. Almost two-thirds of the world’s infrastructure needs to 2035 are in emerging economies, yet 80% of private investment in infrastructure currently occurs in high-income countries.
Our latest trends in global private investment in infrastructure paint a sombre picture. It shows that action is needed to reverse the eight-year long stagnation and address the bottlenecks in MLICs. The need to mobilise private capital to close the growing global infrastructure investment gap is not new, but it’s a challenge that has become increasingly urgent and in today’s climate, even more difficult to address.