Repeatable, predictable and dependable projects are needed to increase investor confidence.
Industry leaders have spoken about the key need for certainty and predictability in infrastructure project development today (10.9.21) at a global roundtable panel discussion hosted by the International Federation of Consulting Engineers (FIDIC).
Speaking at the session, on “Funding sustainable infrastructure” as part of FIDIC’s Global Infrastructure Conference, a panel of industry leaders looked at what works, what doesn’t and what should the sector aim for.
“Quality infrastructure is driver of sustainable growth,” said Enzo de Laurentiis, chief procurement officer at the World Bank, who stressed that this was central to achieving the bank’s efforts to alleviate poverty around the globe. There was still a $2.5 trillion gap every year in what was needed to be spent on infrastructure investment, as there were millions of people without access to modern infrastructure including digital which was increasingly important, he said. “Smart infrastructure is efficient infrastructure and builds strong economies,” said De Laurentiis.
De Laurentiis also highlighted the importance of creating social value and opportunities for communities and building resilience in the way that infrastructure investments were made. The World Bank’s procurement policies supported these aims, he said, many of which included FIDIC contract recommendations and guidelines on managing risk and combating corruption.
Chris Chijiutomi, head of infrastructure equity in the infrastructure and climate group at UK investor, CDC Group, said there were some key market sectors currently of interest in attracting private capital into sustainable infrastructure. These markets were energy, transport, telecoms, water and social infrastructure. “We want to work with partners who understand the market. Finding the right partner is critical. We can take early risks with our capital, but we look for partners who can take things on to the next level in terms of investment,” said Chijiutomi.
Macquarie’s managing director for UK climate investments, Richard Abel, addressed some of the main features of successful scaling-up of infrastructure deployment in emerging markets. “From an investor perspective, infrastructure investment needs to be as boring as possible!” he said. “Repeatable, predictable and dependable projects are what we need – we just need the courage to be boring!” Abel said.
Head of corporate finance for Europe at the National Australia Bank, Adam Coxhead, said there were lessons to be learned from PPP-funded programmes and especially in the energy sector as the industry gears up for the massive investment required to meet net zero ambitions. Some of the UK green energy projects had been particularly effective and the industry would do well to look at those as an exemplar, said Coxhead.
The issue of value was highlighted by Chris Campbell, CEO at Consulting Engineers South Africa. “You are not just looking to procure something that will last only a couple of years. Whole-life costing is crucial and cannot be ignored when we are talking about sustainable infrastructure,” he said.
Summing up the discussion, Aecom’s sustainability development director Robert Spencer, said that environmental, social and governance performance and KPIs needed to be “aligned and consistently measured” as currently that was not the case and this would be crucial in delivering on the UN sustainable development goals, he said.
