Investor allocations in infrastructure expected to increase in 2015
North America (29 per cent), closely followed by Europe (26 per cent), were voted the most likely regions for infrastructure investment in 2015. The results were revealed at the annual Outlook for European Infrastructure Investment roundtable hosted by international law firm Berwin Leighton Paisner (BLP) and organised by Infra Finance (INFIN) following a survey of delegates.
The event, attended by over 150 of Europe’s leading energy and infrastructure professionals, also revealed that over a third of voters (67 per cent) generally felt positive about the outlook for infrastructure investment as a whole.
When looking at the financing of infrastructure deals, keeping with current trends, almost half of respondents (42 per cent) anticipated commercial bank debt to be the debt product most likely to be deployed in infrastructure deals/refinancings over the coming year.
Other main findings included:
- Renewables (31 per cent) and transport (30 per cent) were voted as the sectors expected to be the most active in terms of infrastructure deals in 2015;
- Social infrastructure (6 per cent) and telecoms (2 per cent) were the least popular choices, reflecting the audience’s view of the oil price impact;
- Brownfield regulated infrastructure (27 per cent) and brownfield unregulated infrastructure (26 per cent) were voted as the infrastructure asset categories likely to yield the most infrastructure deals over the coming year, followed by greenfield PPPs (21 per cent), demonstrating the perceived difficulty in getting greenfield projects off the drawing board;
- A lack of deal pipeline/assets (49 per cent) followed by political interference/political risk (27 per cent) and asset over-valuation (19 per cent) were seen as the biggest threat to a sustained flow of infrastructure deals in 2015.
Mark Richards, BLP’s Head of Projects & Infrastructure, commented: “The results demonstrate that infrastructure investor sentiment towards the market remains strong, in fact, even more so than at last year’s event. Investors see their allocations increasing and there remains a strong appetite for renewables and transport assets. The area the audience expressed most concern was pipeline; more deals need to come to market, especially in Europe. Even with the proposed plans to launch a EUR 315bn investment plan in the EU’s 2015 budget, there is still a lack of clarity on the detail behind the investment plans and linkage to a pipeline of credible and investible infrastructure projects.”
To view the full survey results, please see the following: http://www.blplaw.com/media/download/INFIN_Survey_Results.pdf