ACE's Barriers to Investment report explores a wide variety of aspects that act as barriers, or significantly change the risk profile of an investment project. These processes are important within the investment cycle and should be understood by all parties involved.
By facilitating wider debate on these issues it is hoped that the UK can open up new and existing avenues of funding to help address the infrastructure challenges we face moving forward.
Investment in infrastructure is currently considered as a key policy objective of most developed and developing nations. The goal is a simple one, given the financial crisis, reduced demand conditions and concerns regarding sovereign debt, capital spending is considered a method of facilitating economic growth.
However, these conditions have meant that financial markets are less willing to invest, and their risk profile is considerably lower (reducing their willingness to take risks). This is unfortunate given governments willingness to transfer both the financing and risk of delivering infrastructure projects into the private market.
This paper has identified three key areas where improvement is required to facilitate more activity within infrastructure investment.
- The risk associated with the construction phase of infrastructure is not understood, and is considered of significant risk by investors. This phase of projects needs de-risking.
- The public/private sector need to outline clearly what risk each party are prepared to accept and the return associated with such risk.
- There needs to be a dialogue between government and industry to move the debate surrounding the barriers that are in place with a view to designing practical solutions.