Deborah Zurkow (pictured), CIO Infrastructure Debt, Allianz Global Investors on the UK Government’s decision to boost infrastructure spending by GBP3bn a year…
By earmarking a further GBP3bn from a fiscally constrained budget, the Chancellor has underlined the importance of infrastructure spending to the UK economy. Given the estimated GBP200bn pipeline of infrastructure projects identified by the Government, the lion’s share of investment will need to come from the private sector.
The government should be congratulated on the steps it has taken thus far but more focus is needed on unlocking additional sources of investment. In particular there is a gap – perhaps bridgeable through education – between the type of projects the government is seeking investment for (new builds) and the types of investments pension funds are looking to make (refinancing).
By deepening investor understanding of this specialised sector, together we can improve the chances that new projects get off the ground while investors tap into an asset class with attractive risk-adjusted returns in a low-yield environment.
