Cement Energy and Environment

.. .,.. Facilities (AfDB, EBRD, ADB),and , of course new MOBs like AIIB are specifically focusing on infrastructure. Last year the World Bank Group mobilized US$24 billion in financing that included a wide range of financing instruments. ADVANCED MARKETS (Replacement of Aging Infrastructure) • Outdated air traffic control systems • Structurally delicient or functionally obsolete bridges • Aging and potentially t'azardous dams • Water systems that are near the end of their usefullffe • Power irwestment has not Kept pace with power demand • Rail bottlenecks as aresult of growth and ehaJYJes in demand pattems Figure 1Advanced Marltets Crumbling Infrastructure • MaJor roads in poorcondition and highway congestion • Outdated levees with unknown reliability • waterway locks significant~ past useful tne • Under-built public transit • Aging wastewatersystems that discharge billion of gallonsof untreated wastewater DEVELOPING MARKETS (New Demand from Urbanisation) Large-scale and rapid urbanisation requalres massive Infrastructure and esserrtlal services build-outs - Water and waste water systems • Sewerage and sanitation - Roads and bridges • Solid waste management • Rail and transit systems • Emergency services (Police,Fire) • Housing stock F19urc 2 Dcvetop•ng Markets· Needed even BaSIC lnrrastructure "With all of these institutions bringing more resources into infrastructure, the next question becomes 'What is the quality of the investment we will make? 'It's not just a matter of money. The quality of infrastructure matters to get the maximum benefit for jobs and growth, for people's lives, for the environment and for a climate-friendly future," said Jordan Schwartz, Head of the Global Infrastructure Facility and Acting Director of the World Bank Group's Singapore Hub. "Patient Capital" is Aplenty Globally, the main sectors of infrastructure demand are power & gas utilities, oil & gas, and transportation. In addition , private investment is expected to increase its role in current share of global investment from its current total of roughly 15 percent. The Bain Research categorizes private infrastructure investment into two groups: • Core infrastructure sectors like electric utilities, oil & gas, and transport, which will grow at an average three percent per year through 2017, and • Social infrastructure such as water, healthcare , and education which will grow at an annual average off our per cent over the same period. As private investors look to infrastructure as an asset class, however, two core challenges have emerged. First, regulatory and economic instability within individual markets can act as a deterrent, especially to investors with less infrastructure expertise. Second, lower costs of ra1smg capital and fewer good targets for investments has led to increased competition and rising asset prices. INFRASTRUCTURE: TRENDS Capital inflow seeks returns. But there is no dearth of capital per say. Capital just is on lookout for viable destinations. The Needs • FIVekey mfrastructure sectors Weakened public finances are triggering a worldwide influx of private capital, at a time when private investment capital has been steadily accumulating, and is now eager for long-term, low-risk, inflation-protected returns that are better insulated against economic cycles. Bain dubs these funds "patient capital," given investor willingness to await returns over a longer horizon. O.AA~ ~WVii'WW 1. Extraction 2. Utilnies 3. Manufaculng 4. Tansport 5. Social • Oil and gas • Powa generation • Al•oleum refining • Ral • ttlsplals • Other extrachon • Electtlcily T&D • Cherrical ' lbads • Schools (coal. metals. • Gas · water • Heavy metals • Airports minerals) • Telecoms • Ports The Needy- World Urban Populanon I!:!J 1.5 million People areadded tothe global urban population every week tttttttttatatatttttttJtttttatltttJtttttJtt Figure J If you oon"tuwestwhen )Our econoll>{os grottlllQ. you mayflnd)Ourseh eryqwckty ata poonl where)Ourrunways and rooosand pons and r3ll hnes arc choked · • Richard Abad.c. Pv,.C"sgloballl>ader lor Cap• tal Pro,ects & Infrastructure 27