Writing for the World Bank blog, S&P Global Ratings’ Mar Beltran outlines New South Wales’ infrastructure turnaround

Following a countrywide slump for infrastructure projects during the financial crisis, the Australian state of New South Wales (NSW) is displaying signs of promise. Thanks to its application of new financing models and regulatory rigour, NSW’s economic growth is outstripping the G20 average.

In turn, NSW has become a blueprint for regional regeneration. In a blog contribution for the World Bank, Mar Beltran, S&P Global Ratings’ senior director and sector lead for EMEA infrastructure, describes the turnaround.

To read the blog, please click here.

S&P Global Ratings publishes its latest Infrastructure Finance Outlook magazine

S&P Global Ratings has published its latest edition of Infrastructure Finance Outlook – reviewing the most pressing developments from the global infrastructure sectors in the third quarter.

Infrastructure Finance Outlook provides global insights from S&P Global analysts on topics including: reviving North America’s water network; capital rules for EU infrastructure investments; the impact of Hurricane Harvey on the oil and gas sectors; airport redevelopment across Latin America; and renewables in India.

For ratings news and updates (and much more), read the latest edition here: http://bit.ly/IFR2017Q3

Moorgate compiles and edits Infrastructure Finance Outlook.

Easing infrastructure finance flows: S&P Global Ratings’ Trevor D’Olier-Lees and Mar Beltran write for BRINK NEWS

There’s no denying that underinvestment in infrastructure can have deleterious effects upon a country’s trade and economic competitiveness. But, equally, the challenges of financing capital-intensive infrastructure projects from public funds – and without compromising fiscal targets – are only heightening. The question, therefore, is: What tools are available that can ease financing for urgently-required infrastructure projects?

Writing for BRINK NEWS, Trevor D’Olier-Lees and Mar Beltran, both from S&P Global Ratings’ infrastructure ratings practice, bring to light the various means by which projects can raise capital. Traditionally, such projects may have either tapped into the capital markets or employed privatisation models. But, alluding to various worldwide projects including energy infrastructure, water systems and highways, D’Olier-Lees and Beltran highlight some of the emerging financing alternatives: such as “asset recycling”; the use of public-private partnerships (P3); and the “bundling” of assets.

While such methods are increasingly putting capital to work, D’Olier-Lees and Beltran stress that they are not without their challenges. Certainly, these alternatives are not immune to the perennial concerns around costs, technological and counterparty risks, and unfavourable regulatory landscapes.But by identifying, managing and appropriately mitigating these risks, the public and private sector players can create the optimal conditions to enhance infrastructure systems worldwide.

The BRINK NEWS article can be found here.

S&P’s Luisina Berberian discusses the rise of offshore wind power projects in Energy Voice

Global investment in offshore wind projects is soaring – propelled by rising investment in renewables, lower market costs, greater climate change awareness worldwide, and developments in technology. With Europe still standing tall as the regional world leader in offshore wind power, other regions are fast recognising the benefits.

While these regions try to emulate the technological breakthroughs seen in Europe, there remains a plethora of market challenges that must be addressed.

Writing for Energy Voice, Luisina Berberian, associate director, Infrastructure Finance Ratings, S&P Global Ratings, considers the technological, regulatory, and geographical limitations to offshore wind power growth, and how the industry as a whole will overcome them.

To read the full article, please click here.

S&P Global Ratings tells the specialist press that EFSI needs more investment – but certain challenges must be addressed

The Investment Plan for Europe (IPE), or the Juncker Plan, was conceived in 2014 by European Commission (EC) President Jean-Claude Juncker to boost job creation and growth, meet the long-term needs of the economy, increase competitiveness, and help strengthen infrastructure. To bolster the IPE, the European Fund for Strategic Investments (EFSI) was also launched to help mobilise finance for investment and help finance reach the real economy.

6338125076_0c02550fdb_zAs of January 2017, EFSI financing related to approved operations under the EIB Group was set to trigger €168.8 billion of investment or 54% of the €315 billion target amount. In addition, Jyrki Katainen, EC vice president for jobs, growth, investment, and competitiveness, reported that agreements had been concluded with venture capital funds, financial intermediaries, and promotional banks, benefitting over 400,000 SMEs.

Now that the Fund has begun to meet its objectives, the EU is considering extending and enlarging the EFSI. A recent S&P Global Ratings report agrees that greater investment is still needed to lift potential growth in all European economies and address demand in countries on the Eurozone’s periphery. However, implementation of the plan must be sped up before the rise in global and European interest rates pull the attention of investors away.

The report also finds that the geographical coverage and additionality of EFSI must be improved. Projects financed so far are mostly in more developed member states (92% EU-15 vs. 8% EU-13), which can rely on strong administrative capacity and, according to some, tend to be those that could have been financed without EFSI.

More about this report can be read at Delano and the International Project Finance Association (subscription required).

Image credit: CC Search user: Edwin (License)

S&P highlights Brexit’s impact on investor appetite for British infrastructure

mike-wilkinsThe prospect of leaving the EU is spreading uncertainty among investors in the UK’s infrastructure, according to a new report from S&P Global Ratings.

In the report, ‘Brexit Is Weakening Investor Appetite For UK Infrastructure Assets. But Not For Long’, Managing Director of Infrastructure Finance Michael Wilkins notes that, while Britain has historically attracted more foreign investment in infrastructure than any other European country – thanks to its stable regulatory environment – the decision to leave the EU has already had an impact on the appetite for assets in the sector. Deals have been delayed, asset sales postponed, and some projects downsized. In fact, UK-based merger and acquisition (M&A) deals in the first half of 2016 were down to $72.9 billion, the lowest level since 2011.

The UK already relies heavily on the private sector to finance its projects, and the likely continued decrease in FDI and EU funding after Brexit will only increase this dependence. With the government having highlighted as much as £483-billion worth of necessary infrastructure investment until 2021, lower enthusiasm from investors will make addressing this demand all the more difficult.

However, Wilkins admits that the long term could see investors finding new opportunities. In an environment of low and negative yields on government bonds, interest could pick up in infrastructure

investment, while the government has set out a “significant infrastructure pipeline” into which investors can tap.

News of the report was picked up in Smart Energy Universe.

The implications of Brexit: S&P Global Ratings participates in IFPA panel, as covered by the specialist press

spHosted by PwC, the IPFA’s most recent Infrastructure Update gathered a panel of experts from S&P Global, Meridiam, Clifford Chance and Deutsche Bank to discuss the impact of the UK’s vote to leave the EU on UK infrastructure development.

The consensus across the panel was Brexit may well destabilise funding arrangements for major infrastructure projects, with the possible loss of EU regional aid – in particular, funding from the European Investment Bank (EIB)

Offering his insight, Mike Wilkins, Managing Director, Infrastructure Ratings, S&P Global Ratings, suggested that a depreciated currency has been cited as a key cause of investor concern; “A weaker pound may choke project finance in the UK, as imports of specialist materials and equipment required for projects become more expensive. Wind turbines from Europe is one clear example.”

Also referenced, was S&P Global’s pre-Brexit survey of 51 investors, which showed that 71% of respondents believed that Brexit would lower infrastructure investment into the UK in the next two years.

Of course, investors cannot afford to put off decisions indefinitely, and while there are still many questions to be answered, until we have clarity regarding negotiations talks, for many, its “business as usual”.

Following Moorgate’s outreach, the news was published across the finance, real estate, and energy press, including: IPE Real Estate, FTSE Global Markets, Global Banking & Finance Review, Mondovisione, and Energy Central.

Brexit’s impact on infrastructure investment: S&P Global Ratings’ new survey reported in the press

brexit-shutterstock2 (1)With only weeks to go before the UK decides on the future of its EU membership, S&P Global Ratings has weighed in on the Brexit debate, specifically by looking at the possible impact on the country’s infrastructure. Built on findings from a survey of 51 institutional investors, its new report, ‘Post-Brexit, Long-Term Funding Is UK Infrastructure Investors’ Biggest Concern’, reveals that the greatest concern from investors is, above all, currency volatility.

Additionally, Michael Wilkins, lead author of the report and managing director of infrastructure finance ratings at S&P Global, notes that investors found political instability and macroeconomic turbulence – a likely fallout of a Brexit – as significant hindrances to further infrastructure investment for at least two years after the vote. This is because high-levels of uncertainty mean long-term planning becomes especially difficult. However, opportunities to find higher returns in a riskier financing environment may spur some unexpected investment activity, according to some survey participants.

After Moorgate’s targeted media campaign, news of the report and its findings was covered by the financial and specialist press, including Infrastructure Intelligence, Infrastructure Investor (subscription required), Investment & Pensions Europe, FTSE Global Markets, Funds Europe, Private Equity WireInstitutional Asset Manager, and the June edition of Global Treasury Insights.

S&P discusses the challenges of funding Europe’s infrastructure in Global Banking and Finance Review

CaptureEurope needs infrastructure to help spur its growth – but faced with high levels of debt and policies of austerity, governments are finding it difficult to justify funding expensive projects. Writing for Global Banking and Finance Review’s latest monthly issue, Standard & Poor’s Michael Wilkins, managing director of infrastructure finance ratings, points to greater collaboration between the private and public sectors as a solution. Building on a survey of key industry experts, he notes that with the support of such collaboration, government authorities can better identify and prioritise the correct projects, while institutional investors can channel financing according to risk, cost and demand.

The obvious means for fostering this collaboration, as highlighted in S&P’s survey, is improved public-private partnerships (PPPs). Given Europe needs a more developed and flexible PPP framework, Wilkins suggests that ‘capital recycling’ – that is, the sale of existing ‘brownfield’ infrastructure assets to free up funding for new ‘greenfield’ projects – or the raising of new dedicated taxes, like those used to source the funds for London’s new Crossrail, can help.

The magazine can be viewed in full here – please turn to pages 37-39 for S&P’s article.

Natixis and KB Insurance enter infrastructure and aviation co-investment agreement

Natixis and KB insurance announced the signing of a partnership agreement to co-invest in infrastructure and aviation debt last week. This is the fifth agreement signed by Natixis with institutional investors across Europe and Asia as part of the bank’s pioneering model to open the infrastructure and aviation-debt asset class to non-bank financial institutions on a large scale.

natixisUnder the terms of the agreement, KB insurance targets to invest USD 400 million over three years into loans originated globally by Natixis. During the investment period, Natixis will introduce loans backed by infrastructure and aviation assets to KB Insurance, in accordance with the investment criteria specified in the agreement.

Following Moorgate’s outreach, the news was covered by Infrastructure Investor, Global CapitalIJ Global PFI, Infra PPPInfraNewsFlight GlobalPrivate Debt InvestorTXFTrade FinanceGlobal Transport Finance and The Asset