The global economy demonstrated resilience in 2024, avoiding contraction despite persistent inflationary pressures and elevated interest rates. However, the economic momentum remains fragile, shaped by ongoing geopolitical uncertainties, fiscal constraints and shifting monetary policies. Rising commodity prices and supply chain disruptions remain potential inflationary catalysts, underscoring the importance of policy stability.

For the infrastructure sector, interest rate trends are particularly critical, as borrowing costs influence asset valuations, capital flows and deal activity. Infrastructure deal activity moderated, reflecting a measured approach to capital deployment. Publicly traded infrastructure assets have seen valuation compression, reflecting capital market volatility and higher interest rates.

Looking beyond near-term macroeconomic factors, long-term secular trends continue to reinforce infrastructure’s role as a critical asset class. Key investment themes shaping the next decade include digitalisation, decarbonisation, demographics, and modernisation and 18 renewal of aging infrastructure.

According to the Global Infrastructure Hub, the world faces an infrastructure investment gap of approximately US$15 trillion by 2040, highlighting the urgent need for private capital. With governments constrained by high debt and fiscal deficits, specialist investors like BBGI are well positioned to bridge this gap. BBGI’s team is dedicated to identifying attractive core infrastructure opportunities that offer long-term cash flow visibility, strong inflation linkage and a meaningful social purpose.

The disconnect between private market valuations – evidenced by recent secondary market transactions in the core infrastructure sector – and the valuations currently ascribed by the public markets to the listed infrastructure sector continues to persist. Activity in the secondary market, particularly private market participants, reaffirms BBGI’s confidence in the attractiveness of these asset classes. However, over the last few years, this disconnect between public market and private market valuations has constrained BBGI’s access to capital markets and remains a key impediment to seizing the growth opportunities.

North America

Canada:

Canada’s Investing in Canada Plan commits over C$180 billion to infrastructure projects until 2028. The plan is designed to achieve three key objectives: fostering long-term economic growth, enhancing community resilience and promoting social inclusion. To achieve these goals, investments are distributed across five streams: public transit, green infrastructure, Social Infrastructure, trade and transportation, and rural and northern communities. So far, over C$155 billion has been invested, with the Government continuing to roll out additional initiatives to support critical infrastructure development.

Launched in 2024, the Canada Public Transit Fund7 will, for instance, allocate C$30 billion over ten years to improve and expand public transit infrastructure. This initiative aligns with the broader effort to enhance urban mobility, reduce emissions and support sustainable transportation networks. To further advance Canada’s infrastructure ambitions, the Canada Infrastructure Bank (‘CIB’) plays a key role in developing and investing in next-generation infrastructure projects. The CIB’s focus areas include clean power, green infrastructure, public transit, trade and transportation, broadband expansion and Indigenous infrastructure. As at December 2024, the CIB8 has invested over C$13 billion in 75 projects, supporting the country’s transition to a more sustainable and resilient infrastructure network.

While Canada has reduced its reliance on PPPs in recent years, collaboration with the private sector remains crucial for delivering the country’s estimated C$224 billion infrastructure backlog. Discussions are ongoing about how to recalibrate public-private cooperation models to improve efficiency, while procurement of infrastructure projects continues at federal, provincial and local levels.

US:

In the US, deglobalisation and energy security concerns are key drivers for infrastructure investments, requiring upgrades in transportation, utilities and digital infrastructure. With the new administration, federal infrastructure priorities are shifting from climate-focused projects to traditional energy, private-sector-led development and deregulation. The administration has suspended funding for Infrastructure Investment and Jobs Act (IIJA) projects and the Inflation Reduction Act (‘IRA’), with a new focus on initiatives such as the US$500 billion Stargate AI programme, suggesting that technological infrastructure will be a major federal investment focus, alongside energy and industrial projects.

While federal priorities are evolving, state and municipal governments remain pivotal in funding and managing core Social Infrastructure, including education, healthcare, public safety and water systems. Despite substantial public investment, many communities struggle to maintain and upgrade essential services, leading to increased collaboration with the private sector to address funding gaps and accelerate development.

EU:

Europe is facing headwinds, from rising costs of living and housing shortages, to business and migration management. These issues have been impacted by broader societal, environmental, security and economic shifts. In response, the new European Commission has outlined key priorities aimed at making Europe more competitive and is establishing a framework that significantly influences public and private infrastructure investments across various sub-sectors in its member states.

Achieving these objectives will require substantial financial commitments. According to a report published by a former president of the European Central Bank, an additional annual investment of at least €750 billion to €800 billion is necessary to maintain competitiveness and drive sustainable growth, the majority of which is expected to come from private sources. To support economic resilience and long-term sustainability, the EU's infrastructure investment priorities are centred on three key areas: sustainable energy, digital transformation and strategic connectivity projects. Another major pillar of EU investment is transportation and mobility. The EU is continuing the development of the Trans-European Transport Network, a comprehensive system of roads, railways, airports and waterways designed to ensure seamless and efficient movement across member states.

Beyond EU-led initiatives, individual member states are advancing their own infrastructure agendas. Many governments are prioritising Social Infrastructure, such as housing, healthcare and education, to improve access to essential services and address challenges like housing affordability and regional disparities.

UK:

The UK’s National Infrastructure and Construction Pipeline – published in 2023 – estimates that £700 billion to £775 billion in infrastructure investment will be required over the next decade, with energy, transportation and Social Infrastructure identified as the most critical areas. The Government has introduced structural changes that will reshape the implementation and priorities of this pipeline, and is merging the National Infrastructure Commission with the Infrastructure and Projects Authority (‘IPA’) to create a single, more powerful infrastructure oversight body. The resulting National Infrastructure and Service Transformation Authority (‘NISTA’), set to launch in April 2025, will have an expanded mandate to streamline infrastructure delivery, align projects with strategic government goals and accelerate execution.

Recognising the need to mobilise private capital for infrastructure development amid fiscal constraints, the UK Infrastructure Bank was restructured into the National Wealth Fund (‘NWF’) in October 2024, expanding its mandate beyond traditional infrastructure to support the broader industrial strategy. With an estimated initial £27.8 billion in capital, the NWF aims to catalyse private investment in key sectors.

The Government’s infrastructure strategy focuses on sustainable development and economic growth, with transport, housing and healthcare forming key investment pillars. For example, the Government has pledged to build 1.5 million new homes, and by combining public and private sector funding, the Government aims to drive housing growth, improve regional connectivity and create sustainable urban expansion. The Government has also outlined a vision for transforming the National Health Service (‘NHS’) into a more community-based model, prioritising localised health service delivery.

Australia and New Zealand

The Infrastructure Investment Program (‘IIP’) remains the Australian Government's primary funding mechanism for major infrastructure projects, supporting a rolling ten-year pipeline of investments in roads, rail, public transport and regional connectivity. According to Infrastructure Australia’s latest report, the nation's major public infrastructure pipeline is valued at A$213 billion over the five years from 2023–24 to 2027–28, with a growing emphasis on energy transition and Social Infrastructure. Infrastructure Australia projects a six-fold increase in renewable energy projects over the next five years, making strategic planning for logistics and enabling infrastructure critical for both the government and private sector.

State and territory governments are prioritising energy transformation and Social Infrastructure, including investments in hospitals, education and housing. PPPs continue to play a critical role in delivering these projects.

In New Zealand, the Government introduced an NZ$32.9 billion investment plan for the 2024–27 National Land Transport Programme to enhance efficiency in infrastructure delivery.