The drive for US renewables goes beyond Trump and politics

It probably comes as no surprise that, despite all the brouhaha about government-backed infrastructure programmes, the energy sector once again dominates the North American infrastructure market – and will continue to be “the major infrastructure investment opportunity in North America, now and for some time to come”, Partners Group’s Todd Bright tells us. The difference is that this opportunity is increasingly not limited to conventional energy.

As Starwood Energy’s Himanshu Saxena points out, demand for renewables is being driven by customers – and huge energy consumers at that, including major tech titans such as Facebook, Google and Amazon, as well as corporates such as General Motors, Johnson & Johnson and Procter & Gamble. In the US, the Trump administration may not support clean energy, but the drive for renewables and decarbonisation goes beyond politics and regulation. “It is basic economics,” Saxena says.

Perhaps a more unexpected bright spot in the US is the recent activity witnessed in the aviation sector, with some high-profile, big ticket projects having taken off with financing from the private sector.

With a price tag of $13 billion, the modernisation of New York’s JFK International Airport is now one of the country’s largest PPPs. Not only is the price tag eye-catching, what’s impressive is that “a staggering 90 percent” of that total will be financed by the private sector and mostly by airlines, as we find in our US feature.

Further to the north, in Canada, First Nations present untapped opportunities due to a significant infrastructure deficit that amounts to C$30 billion ($22.7 billion; €20.2 billion). Our Canada feature provides some expert advice on how institutional investors can make the most of this opportunity that is emerging as ‘the new frontier’ in the Canadian infrastructure market.

In our roundtable discussion, five industry experts gave a sweeping overview of the North American infrastructure market, including the changes it’s going through and where it’s headed. Aside from predicting a drop in valuations, another hot topic among participants was infrastructure’s ever-expanding definition. As InstarAGF’s Gregory Smith put it, should a market correction materialise, “it will become evident very quickly which investors are being true to the definition of infrastructure”.