On 17th January 2017, Technical Advisors Europe participated in the event “Outlook for European Infrastructure Investment 2017” hosted by the Infra Finance Breakfast Club at KfW IPEX-Bank’s office in Frankfurt, Germany.
The panel discussion was led by Christian Bevc, Managing Director Transport and Social Infrastructure (PPP) at KfW IPEX-Bank. The panel members included Thilo Rose, Senior Investment Director at Meridiam, Dr. Peter Brodehser, Director Infrastructure Investments at Talanx Asset Management GmbH, Doris Schürch, Vice President at Partners Group, and Thomas Schwenzer, Project Director at Eiffage PPP GmbH. The audience consisted of more than 50 infrastructure professionals.
All panel members agreed on the fact that there is currently a lack of investment opportunities in the infrastructure market. In particular, the pipeline for transport infrastructure projects in Europe remains modest and the increasing size of funds is furtherly amplifying competition among infrastructure investors. Therefore, investors are considering new sectors and geographies, such as Southeast Europe, to invest.
In respect of the upcoming European infrastructure projects, the A49 is likely to be one of the last greenfield projects in Germany for a while. The Czech D4 motorway PPP project attracted more than five bidding consortia and more than 10 consortia are expected to bid for the upcoming motorway PPP projects in Norway.
Moreover, the infrastructure investment landscape is expected to change in the short term. Basel III, in particular the Net Stable Funding Ratio, is likely to negate the maturity transformation function of the banking sector. Hence, institutional investors such as pension funds are expected to play a bigger role when it comes to funding future infrastructure projects since they are not affected by the upcoming banking regulations.
Last but not least, the panel confirmed that the appetite for new infrastructure investment opportunities remains very high and competition is increasing. This will make it more difficult for all market participants to source sufficient projects and investment opportunities.
For Technical Advisors Europe, as a technical advisor in transactions and PPP-projects, this may still imply a high demand for technical due diligences and feasibility studies in diverse regions of Europe. Investors have to select partners and team members very carefully in order to remain on the winning side.