Infrastructure as Business brings new emphasis and clarity to the importance of private investment capital in large-scale infrastructure projects, introducing investors, policymakers, and other stakeholders to a key element that is surprisingly absent from the discourse on public-private partnerships. Despite the importance of modernizing infrastructure across the globe, governments often face challenges in securing the necessary capital to meet future need, as well as developing policy to meet these goals. Explaining the structure of the private investment universe and flow of private capital in such projects, this book ambitiously aims to bridge this "infrastructure gap" by elucidating shared terminology, conceptual frameworks, and an alignment of goals and objectives between public and private sectors―essential to meet increasing environmental, social, and governmental requirements for infrastructure in coming years.
- Appropriate for graduate-level courses in real estate, public policy, and urban planning that focus on infrastructure, project finance, and procurement and delivery models such as PPPs.
- Provides a clear understanding of private investment and PPPs to the investment community as well as professionals in real estate, project finance, and related fields, who often learn mostly on-the-job and from colleagues.
- Equips government officials and policymakers with key terms and concepts needed to "sit across the table" with private financers and explore opportunities for private capital investment in early project stages.
- Outlines communication strategies for both public and private sectors, which will increasingly need to collaborate to address climate change, respond to new technologies, and develop efficient ways to deliver services.
Written to engage academic, private investment, and public policy/governance audiences alike, Infrastructure as Business: The Role of Private Investment Capital invites discussion and opens doors to advancing new business models, with international applications, to offer increased value for private investors as well as more efficient, flexible funding for innovative infrastructure development in the future.
Author(s): James McKellar
Publisher: Routledge
Year: 2023
Language: English
Pages: 282
City: New York
Cover
Endorsement
Half Title
Title Page
Copyright Page
Dedication
Table of Contents
List of Figures
Acknowledgments
Author Biography
Introduction
Organization of the Book
An Increasingly Uncertain World
Notes
Part I Setting the Context
1 Defining Infrastructure
Notes
2 What We Learn From History
Notes
3 Who Owns Infrastructure
Public Versus Private
An Ever-Changing Pattern of Ownership and Control
A Downside of Privatization
New Ownership Structures
Notes
4 Addressing the Infrastructure Gap
Impact of the Infrastructure Gap
Funding Versus Financing of Infrastructure
Notes
5 Challenges in Moving Forward
Growth of Cities
Incremental Change
Intangible Infrastructure
Note
Part II Investing in Infrastructure
6 The Appeal of Real Assets
Externalities
Monopolies
Rationalizing the Public Interest in Infrastructure Assets
Evolution of the Capital Markets
Desirable Features of Infrastructure as an Asset Class
Challenges and Risks in Investing in Infrastructure
Impact On Pricing
The Appeal of Investing in Infrastructure
Notes
7 Investing in Infrastructure
A Wall of Money
Growth in the Sector
A Case for Investing in Infrastructure
Portfolio Diversification
Capital Appreciation Potential
Predictable and Steady Streams of Income
Potentially Higher Risk-Adjusted Returns
Inflation Protection
Current Status of the Asset Market
Need to Reassess Risk and Return
Impacts of Climate Change On the Investment Industry
Note
8 Infrastructure as a Business
Simplifying the Business Proposition
Enterprise Risk Management
A Portfolio Approach
Portfolio Construction
Structuring an Investment Business
Factors Influencing a Portfolio Investment Approach
Notes
9 Elements of the Business Model
Elements of a Business Model
Public–private Interface
Business Models for Greenfield Projects
Business Models for Emerging Economies
Infrastructure Business Models
Notes
10 Infrastructure Business Models
Nav Canada
Sharing Risks and Rewards
Recent Examples of Growth Strategies
Notes
Part III The Investment Universe
11 The Global Market for Infrastructure Investments
12 The Flow of Infrastructure Capital
Dry Powder
Investment Conduits
Infrastructure Risk and Return Categories
Investing the Proceeds
Mapping Private Investment Opportunities
Measuring Performance
What the Research Tells Us
Analyzing the Data
Notes
13 Perspectives On the Investment Industry
Conduits for Channeling Investment Funds
Institutional Investors
Listed Funds (Infrastructure Managers)
Macquarie Infrastructure and Real Assets (MIRA)
Brookfield Asset Management (BAM)
Unlisted Funds
Public Pension Plans in Canada: The “Canadian Model”
Public Pension Plans in the U.S.
Notes
14 Public Finance Challenges
Project Preparation and Design
The Proverbial Question
The Infrastructure Bond Market
Lowering the Cost of Capital: The Ontario Experience
Case Study: Bridgepoint Health Care, Toronto, Canada
Notes
Part IV Sustainable Infrastructure
15 What Is Sustainable Infrastructure
What Is Sustainable Infrastructure and Why Do We Need It?
Sustainability Is Context Sensitive
A Narrow Window of Opportunity
Sourcing the Necessary Capital
A Dirty Secret
Notes
16 Global Landscape of Climate Finance
The Climate Financing Gap
Task Force On Climate-Related Financial Disclosures (TCFD)
Coalition for Climate Resilient Investments (CCRI)
Notes
17 ESG and Responsible Investing
A Brief History of Environmental, Social, and Governance (ESG)
Shifting the Emphasis in ESG
Challenges in Implementing ESG
ESG and Institutional Investment in Infrastructure
A Central Role for ESG
Part V Investing in New Infrastructure
18 Greenfield Projects
Challenges for the Private Sector With Greenfield Infrastructure
Public–private Partnerships
Devising a Capital Structure for PPPs
Challenges for the Public Sector in Greenfield Infrastructure
Incentivizing Private Capital in Greenfield Infrastructure
The REM Project, Montreal, Quebec, Canada
Notes
19 Challenges in Project Delivery
Global Challenges in Large-Scale Project Delivery
Project Delivery Challenges Unique to the Emerging Economies
Impact of Project Delivery On Sustainability Requirements
Notes
20 Investing in Emerging and Frontier Economies
The Evolution of the Emerging Markets
Investment Needs
Role of Governments
Risks in the Emerging Economies
Notes
21 Financing Infrastructure in Developing Countries
Mobilizing Private Capital
Blended Finance
Investor Potential in the Emerging Markets
Notes
Part VI New Frontiers for Investors
22 Non-Tangible Infrastructure Assets
The Emergence of Data Infrastructure
A Recent Example
Two Challenges Facing Investors in Intangible Infrastructure
Note
23 The Need for Creativity and Innovation
Drivers of Change
Expanding Upon Innovation
The Infrastructure of Tomorrow
A Green Opportunity
Note
Conclusion: Now and Into the Future
References
Index
