Rather than brownfields or greenfields, industry practitioners believe “hybrid” deals that mix both asset characteristics will dominate the future of the US market.
That was the main sentiment expressed during a panel on the distinction between greenfield and brownfield assets at PEI’s Infrastructure Investor Forum in New York.
Greenfield, or new-development investments, are often contrasted with brownfield, or existing investments as two distinct sub-asset classes within infrastructure. But panelists and conferees gathered at the event seemed to think that this distinction was too black-and-white.
Stephen Howard, head of infrastructure and project finance at Barlcays Capital in New York, agreed with Smith, adding that “hybrid” deals similar to the SH-121 would likely get more traction in the future.
For pure greenfields, both Howard and Smith agreed that the municipal bond finance market will continue to provide an attractive financing option.
In New York, investors will likely find ample opportunities for both kinds of opportunities, Samara Barend, the executive director of the New York State Commission on State Asst Maximisation, told the audience. She added that the New York State Asset Maximisation Board, the body overseeing public-private partnerships in New York, should be set up soon and ready to facilitate such investments.
Panelists also took a “hybrid” view on the power of infrastructure investments to facilitate job creation. Though greenfield projects are often viewed as a bigger job creator than brownfields, Luis Palazzi, vice president of infrastructure concessionaire Abertis USA, said that governments can actually create as many jobs with brownfields as with greenfields. In Pennsylvania, for example, Abertis would have invested about $2 billion in the first few years of managing the state’s turnpike, had their bid ultimately succeeded. That investment, Palazzi said, could have supported and created a lot of jobs.
Job creation is ultimately the result of what governments do with the proceeds from their brownfield deals, Palazzi added.