With the global economy facing its deepest economic contraction since the Second World War, many governments are looking to infrastructure development to reinvigorate growth. Investments in infrastructure have the potential to boost productivity, facilitate trade and generate widespread multiplier effects that can aid economic recovery. As public sector support for infrastructure development and adaptation grows, new opportunities are likely to emerge for private infrastructure owners and operators — both in the construction of new infrastructure, as well as in the enhancement of existing assets.
However, the risk profile of infrastructure assets is shifting: Climate change is imposing new pressures on the long-term and stable returns traditionally promised by the infrastructure sector. Volatility in the earth’s climate and an unprecedented global transition toward low-carbon energy and consumption is presenting new risks, and the private sector will not be able to effectively protect against these risks alone.