1Deloitte Research – The changing landscape or inrastructure unding and nance
Two years on, policy makers are still sorting through thewreckage ollowing the nancial tsunami that roiled theworld in 2008 and the ensuing global recession, thedeepest in generations. The inrastructure sector was notimmune. In act, it could be argued that inrastructureis uniquely disadvantaged in the crisis and its atermath.At this point only one thing is certain: the landscape orinrastructure unding and nance has been dramaticallyaltered and could remain so or at least the near term.Two trends are now evident. First, governments are usingincreased inrastructure spending as an economic stimulustactic. Second, tightened credit markets are posing anobstacle to raising debt nance or inrastructure deliverymodels — public or private — that depend on high levelso up-ront capital repaid over the long term through userees or general taxation.This article discusses these trends and the impact o eachon inrastructure unding/nance, particularly with respectto the prospects or public-private partnerships (PPPs) inthe United States and around the world.Figure 1 portrays the emerging contours o the newinrastructure unding/nance landscape, outliningconditions on both sides o the market: the “demand”or inrastructure unding/nance and the “supply” ounding/nance on the part o the public and privatesectors.
Figure 1. How the inrastructure landscape has changed in the wake o the credit crisis
‘Pre-credit crisis’ trends‘Post-credit crisis’ trendsDemand
alternative delivery models
project nance loan market
growth in inrastructure unds