Which countries are the most attractive for infrastructure investment?

Global Infrastructure Investment Index 2016

Derek Sprackett

Head of Financial Institutions, Middle East

+971 (0) 4 423 3900 Mail

Singapore, Qatar and Canada rank in top five in latest Index

The urgency for new and improved sustainable infrastructure around the world is increasing. However infrastructure projects are continually delayed through lack of investment, even though the appetite to invest is evident.  The third Global Infrastructure Investment Index 2016 (GIII) supports investors, contractors and project sponsors alike in ensuring that the investment gap is bridged successfully.

Nations with stable political environments, secure business environments and strong growth potential such as Singapore, Qatar and Canada are the most attractive markets for infrastructure investors according to Arcadis’ third Global Infrastructure Investment Index 2016.  

The Index is published every two years and ranks 41 countries by their attractiveness to investors in infrastructure.  In order to gauge their appeal the study looked at various issues including the ease of doing business in each market, tax rates, GDP per capita, government policy, the quality of the existing infrastructure and the availability of debt finance. Combining all of these factors provided a strong overview of the risk profile for each market and how attractive each one is likely to be to potential investors.

The report takes an in-depth look at the trends within each region to identify which ones are the most attractive, with a spotlight on the Americas, Asia Pacific, Europe (including a focus on the Eastern European infrastructure investment market), and the Middle East. 

"In times of risk and uncertainty, infrastructure is an increasingly popular asset class for private sector investors."

The countries are ranked below in order of most attractive for long term infrastructure investment:

Despite infrastructure being a long term investment, short term factors such as currency devaluations, commodity prices and security issues can be a barrier to investment.  Given these issues, nations including the US, UK and Germany are in strong positions to potentially attract more private sector finance, which could bridge the funding gap for the development of much needed new infrastructure. 

Our research also highlighted that four of the top ten ranked countries – UAE, Canada, Malaysia and Norway – carried a higher short term risk, indicating that better investor opportunities may lie in the operation and maintenance rather than the construction of the infrastructure asset: 

For contractors, getting the risk right means that investors are more forthcoming and as a result they are able to generate long term income through the range of PPP structures. It is therefore not surprising that contractors today are using a number of strategies to enter into emerging high potential markets, deemed to have a big future in PPP and major project investment. The GIII also features a spotlight on getting the risk right for contractors.

"There is clearly a lot of social and public need for new infrastructure across the world... There has to be a way of bridging the gap and finding solutions to improve investment readiness."

Overall there is an urgent need for dialogue between the public and private sectors to close the funding gap, and unlock the huge community and business benefits from infrastructure investment.

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Derek Sprackett

Head of Financial Institutions, Middle East

+971 (0) 4 423 3900 Mail

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Global Infrastructure Investment Index 2016 - Middle East

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