Hosted 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.