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White Paper on Infrastructure Investment

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White Paper on Infrastructure Investment

Boris Galonske shares a white paper on investing in infrastructure to increase financial stability and prosperity.

Infrastructure has evolved as an investment asset class. With increasing investment needs, the participation of private capital has increased as well. However, a funding gap remains putting economic development at risk. The 2008 financial crisis has shown that infrastructure contributes to higher re­silience of the financial services sector. Hence, policy makers are well ad­vised to further improve the conditions for privately funded infrastructure build-out. This will improve confidence in financial services offerings as it stimulates economic benefits and increases portfolio stability. 

Situation today 

Infrastructure investment needs have increased over time. In the late 1990s, annual global investment needs were below USD 2 TN1 Until 2040 they are

expected to increase to nearly USD 4 TN annually. The Infrastructure Out­look of the G20 Global Investment Hub expects total infrastructure invest­ment needs of USD 94 TN until 2040. This implies a funding gap of USD 15 TN2 as shown in Figure 45.1. 

The case for privately funded infrastructure 

Therefore, stimulating infrastructure investments and closing the funding gap will contribute to GDP growth. Longer-term GDP gains might even be higher if these investments are not financed by public budget deficits.

 

Key points include:

  • Infrastructure from an investor’s perspective
  • What investors require
  • Digitization as a risk management lever

 

Download the full white paper, Infrastructure investing: Increasing financial stability and prosperity, from Silverbergh.com.