The Netherlands continues to be a top market for infrastructure investors. The country’s traditional and digital infrastructure sectors present vigorous opportunities for global players, such as Macquarie Capital, Siemens and Shell.
The privatisation of Dutch utility Eneco has attracted multiple bidders, with Mitsubishi, Macquarie and EDF expressing interest. In July 2019, US-based investor KKR teamed up with Rabobank to bid for the company, while PGGM and Shell joined forces in January 2019.
First introduced under former Prime Minister Kjell Magne Bondevik’s centrist coalition, the Norwegian PPP programme is buoyed by the success of the RV3/RV25 project, the first closed in the country since 2006.
On 13 February 2019, the Norwegian Public Roads Administration published a risk clarification document for the RV555 Sotrasambandet PPP project, to facilitate contract negotiations. The project is valued at EUR 1.04bn.
Finland’s digital infrastructure strategy and optical fibre deployment initiative are in line with the government’s plans to turn the country into a global communications leader. To date, Finland has granted roughly 30 licences for 5G testing, the country also ramping up its renewables programme.
A consortium of Finnish pension funds established a EUR 300m renewable energy investment platform in the first half of 2019. The new company, Exilion Tuuli, has already acquired three domestic onshore wind assets with a cumulative capacity of 73MW for EUR 90m.
#9 United Kingdom
With the pound weakening, and the UK set to become a third party in any future cooperation with the EIB, infrastructure sector players are facing a lack of certainty and direction.
Nonetheless, the country’s multibillion-pound offshore wind sector and its ambitious net zero and fibre targets play an important role in securing the UK’s position among the top 10 jurisdictions globally.
One of the most attractive social infrastructure markets in Europe, Belgium boasts a robust pipeline of schools, with the education infrastructure agency AGION tendering roughly EUR 190m worth of school PPPs over the past 12 months.
Austria’s 5G auction began in February 2019, with seven bidders receiving licences for utilisation of spectrum in the 3.4GHz-3.8GHz band and roughly EUR 188m raised.
The country made strides in liberalising its broadband sector, with Allianz Capital Partners in July 2019 acquiring a 74.9% stake in Lower Austria-based provider NoGIG, which was entirely owned by the state.
President Emmanuel Macron’s infrastructure and energy ambitions were hobbled by public opposition and a series of contract-related delays. Despite the stalled privatisation of Aeroports de Paris, French regional airports continue to attract significant interest from private, long-term investors. In July 2019, the concession contract for Lille-Lesquin airport was awarded to an Eiffage-led consortium.
The 600MW Dunkirk offshore wind auction attracted an impressive number of competitive bids from market players such as EDF, Equinor, Ørsted, Vattenfall and Engie. Following the favourable auction results, the government of France announced it will double its offshore wind target to 1GW per year.
Spain’s traditional infrastructure sector is steadily recovering after economic damage to toll road operators, due to repeated legal disputes over lost revenues because of post-financial crisis traffic slowdowns.
In June 2019, France’s Meridiam bought an 85% stake in the Autopista del Sol from Ferrovial’s Cintra and Unicaja Banco. The project comprises two independent concessions, Ausol I and Ausol II, which form part of the larger AP-7 road.
Poland’s ambitious coal generation reduction target, necessitating a 50% decrease by 2040, is a driver of investment in renewables, while the country is set to become one of the most promising offshore wind markets globally.
The Polish government is targeting the development of 10GW offshore wind capacity by 2030. The number of projects coming to the market has favourably affected technology prices.
In August 2019, Marguerite announced its acquisition of a 48.15% stake in the Italgas subsidiary, Medea, for an initial investment of EUR 25m. The deal is expected to reach financial close at the end of the year.
Italy signed the FER1 decree at the beginning of July 2019, strengthening its commitment to deploying renewable energy. The first solar auction process, for 500MW of capacity, kicked off on 30 September 2019. An additional three tenders will be launched in 2020.
#23 Czech Republic
Macquarie Infrastructure and Real Assets (MIRA) entered a deal worth EUR 1.8bn in April 2019, taking over the Czech-regulated gas distribution network Innogy Grid Holding.
Another noteworthy project in the Czech Republic is the ongoing D4 highway PPP procurement process, with Hochtief/Strabag, Vinci/Meridiam and Porr/Macquarie/OHL/Egis the shortlisted consortiums as of April 2019.
The construction of a Slovakia-Poland gas interconnector began in September 2019. The project is being executed by the Slovak transmission system operator EUSTREAM, collaborating with its Polish counterpart GAZ-SYSTEM.
In the same month, Slovakia’s government also expressed interest in facilitating Azerbaijani gas transit to the EU, the two governments are currently under negotiations to cooperate in a wide range of sectors, including energy, transport, agriculture and tourism. Slovakia also launched its first prison PPP project.
The reconstruction of the 152km Hungarian section of the Budapest-Belgrade rail line was awarded in April 2019 to a Chinese-Hungarian consortium, including China Tiejiuju Engineering and Construction, China Railway Electrification Engineering Group and RM International. The project is valued at EUR 2.3bn.
Russia’s leap into the renewables sector received attention from several international market players, with Finland’s Fortum taking home nearly 1GW of wind and solar capacity in the auction held between 29 May and 9 June 2018.
In February 2019, the Romanian government proposed a list of 21 PPP projects, including highways, hospitals, railways, power plants and tourist resorts. The plan was met with scepticism, since the country lacks the necessary experience to implement PPP projects.
One of the most advanced tendered projects was the Ploiesti-Brasov motorway, the sole remaining bidder for which was a consortium comprising China Communications Construction Company and Turkish construction firm Makyol. But in July 2019 the Romanian government decided to declare it a project of national importance and to finance it from government funds instead.
In July 2019 the Romanian government decided to declare the highway a project of national importance and finance it from government funds. Increasing uncertainty in the infrastructure sector - caused by numerous stalled or cancelled projects - and a challenging regulatory environment are two of the reasons for Romania's drop from 33rd position in 2017 to 39th in 2019.
In July 2019, after several delays, the Transport Ministry of Bulgaria selected a preferred bidder for Sofia airport. A consortium including Meridiam, Strabag and Munich Airport was selected as a preferred bidder for a 35-year concession.
The 182km Bulgaria-Greece gas interconnector was granted a final licence in July 2019, enabling ICGB – the company developing the project – to commence construction. The project is worth approximately EUR 220m.
A spike in Ukrainian onshore wind activity in 2019 points to a renewables market heading in the right direction. At the end of July 2019, VLC Renewables and LongWing Energy announced the financial close of one of the country’s largest wind farms to date, the 500MW Zaporizhia phase I.
One month before, in June 2019, another Ukrainian wind farm, the 200MW Primorskaya also reached financial close, having raised debt from a group of German banks. The project’s total cost is approximately EUR 150m.