The Bid
203: Infrastructure mini-series Ep 1: The Growing Demand For Infrastructure Investment
Dec 13, 2024
Raj Rao, Founding Partner, President, and COO of Global Infrastructure Partners, dives into the booming world of infrastructure investing. He discusses its origins and why it's becoming essential for investors. The conversation touches on the intersection of AI and data centers, highlighting the increased energy demands and infrastructure challenges. Rao also emphasizes the need for decarbonization and the vast investment opportunities in renewable energy. Finally, he explores the financial benefits linked to enhancing existing infrastructure, like Gatwick Airport.
19:12
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Quick takeaways
- Private capital is essential for infrastructure development as government budgets struggle to meet growing demands for upgrades and expansions.
- The shift towards a low-carbon economy and advancements in technology like AI are significantly driving the increasing need for infrastructure investment.
Deep dives
The Importance of Private Capital in Infrastructure
Private capital plays a crucial role in the investment landscape of infrastructure due to increasing government budget constraints. With around 80-85% of global infrastructure owned by governments, the onus to upgrade or create new infrastructure often exceeds governmental capabilities, prompting a shift towards private ownership. Private companies can approach infrastructure with a different management mindset that focuses on operational improvements and profitability, which allows them to enhance service delivery. This transformation reflects the growing belief that private investment is vital for maintaining and expanding essential infrastructure assets vital for public use.
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