By James Carthew, QuotedData, for Trustnet, 14 February 2024:
The Labour Party’s decision to abandon its green spending plan has attracted criticism from all sides. Its stance is that it was a plan born in a time of lower borrowing rates that is not feasible now
However, there is an awful lot of investment needed if we are to meet our climate pledges and ensure that our crumbling infrastructure is updated and refreshed. The obvious solution is to use government money and policy creatively to encourage private investment.
A couple of decades ago, the main route for encouraging infrastructure investment was public/private partnership (PPP) and private finance initiative (PFI) type models. The oldest of the listed infrastructure funds were set up to invest in these.
HICL Infrastructure (originally HSBC Infrastructure) and International Public Partnerships (INPP, originally Babcock and Brown Public Partnerships) are both about 17 years old.
The projects that they acquired in the first few years tended to be availability-based assets. Ones that generated an income as long as the asset was available for use and in good order. The counterparty was usually a government entity and the revenue was often inflation-linked.
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