GIH: Private investment in infrastructure decline!

Filling the infrastructure: a priority, today more than ever!

Everyone agrees: investing in social infrastructure is essential.  Analytics published by WHO provide a striking illustration of the economic and social growth impact of investment in social infrastructure, with health infrastructure the second cost-driver of achieving the health targets across all the SDGs (with a staggering 36% of all investment needed in LMICs).

How to reconcile this with the grim prospect of a declining private investment trend in infrastructure, while leveraging private capital investment to fund public assets is essential?

The Global Infrastructure Hub, a Sydney-based G20 initative, produced in 2017 a Global Infrastructure Outlook corroborating the findings of the WHO Health Price Tag, with conclusions that the world was facing an overallUS$15 trillion gap between projected investment and the amount needed to provide adequate global infrastructure by 2040.

On 27 October, the GI Hub published a new report Infrastructure Monitor 2020 underscoring that:

Private investment in infrastructure through primary market transactions remains low at around US$100 billion per year and has been declining over the past decade.

More granular information delineated throughout the report show that:

• In 2019, only 25% of private infrastructure transactions occurred in new infrastructure investments, down from 64% in 2010.
• Private investment in social infrastructure declined the most from US$19 billion in 2010 to US$3 billion in 2019.
• Social infrastructure has experienced lower default rates than other infrastructure sectors.
• Total investment in more carbon-intensive and less sustainable energy was greater than investment in renewables in low and middle-income countries.
• Latin America, the Middle East and North Africa have been fast growing regions for private investment, while Europe has seen the largest decline.

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