Australian Infrastructure Investment report 2022

Current status of Australia’s infrastructure market as the world emerges from the COVID-19 pandemic. 5 min read

Australia’s mature and stable market has maintained investor confidence and continues to be a leading destination for investment. However, investors face a range of challenges, particularly supply-chain constraints and economic instability due to rising inflation and higher costs of borrowing.

Securing Australia’s place as an attractive destination for infrastructure investment will require:

• strong policy leadership to boost Australia’s environmental and social credentials;
• a recommitment to key market principles of competition and limited intervention; and
• utilisation of private capital to unlock funding.

We have partnered with Infrastructure Partnerships Australia to survey industry leaders and undertake an analysis to provide a clearer understanding of the industry and what the key priorities are that lie ahead.

The 2022 Australian Infrastructure Investment Report finds there is a wave of private capital ready to invest in Australia’s infrastructure decarbonisation agenda. The report also reflects on investor sentiment of the Your Future, Your Super reform measures, documents the rising influence of ESG factors on investor strategy, and measures the impact of market capacity constraints and rising inflation on investor certainty.

Key takeaways:

• Australia remains an attractive destination for investment, underpinned by a strong reputation - 88% of investors are ‘highly likely’ to invest in Australian infrastructure, up from 84% in 2021.
• Investors are keen to drive decarbonisation efforts but need policy certainty -
  • 64% of investors indicated a preference to see Australian governments do more to push decarbonisation, regardless of higher costs.
  • 69% found renewable generation to be an attractive asset class, with 68% identifying energy transmission and distribution as the preferred asset class in which to invest.
  • 74% of investors believe the climate risk has increased over the past year.
• Australia’s performance in ESG is varied - ESG credentials of investments continue to be a key driver for investors, and Australia has an opportunity to catch up to more sophisticated ESG markets overseas. 88% of investors indicated ESG credentials of investments have become more important.
• Supply-chain constraints and inflationary economic conditions are challenging investors - An overwhelming number of investors highlighted the impact of market capacity constraints and rising inflation on investor certainty.