Global Infrastructure Investment Need to Reach $97 Trillion by 2040

US to have the largest funding gap; Canada among the lowest

LONDON–(BUSINESS WIRE)–A ground-breaking new report by the G20’s Global
Infrastructure Hub (GI Hub) outlines infrastructure investment needs
globally and individually for 50 countries and seven sectors to 2040.

The report, Global
Infrastructure Outlook, reveals the cost of providing infrastructure
to support global economic growth and to start to close infrastructure
gaps is forecast to reach US$94 trillion by 2040, with a further $3.5
trillion needed to meet the UN Sustainable Development Goals (SDGs) for
universal household access to drinking water and electricity by 2030,
bringing the total to $97 trillion.

Outlook, which can be accessed through an online
tool, also reveals that $18 trillion – almost 19% – of the $97
trillion, will be unfunded if current spending trends continue.

Every year $3.7 trillion will need to be invested in infrastructure to
meet the demands of an accelerating global population, the equivalent of
the total annual GDP of Germany, the world’s fourth largest economy. And
in order to meet the water and electricity SDGs, the investment need
forecast increases by an additional $236 billion per year until 2030,
when the goals are due to be met.

This is not just a major challenge for emerging countries that need to
create new infrastructure, but also for advanced countries that have
ageing systems that have to be replaced.

The United States will have the largest gap in infrastructure spending,
at $3.8 trillion, while China will have the greatest demand, at $28
trillion, representing a massive 30% of global infrastructure investment
needs.

The ultimate achievement of the SDGs by 2030 is reliant on the provision
of quality infrastructure. On current trends, investment will fall
substantially short of meeting SDGs for water and electricity.

The ultimate achievement of the UN’s Sustainable Development Goals
(SDGs) is reliant on the provision of quality infrastructure. On current
trends, investment will fall substantially short of meeting SDGs for
water and electricity by 2030.

GDP growth and rising populations in urban environments are driving the
need for investment in infrastructure globally. By 2040, global GDP is
forecast to double from 2015 levels and the population of our cities
will swell by 46% on average. The response to this demand differs
dramatically by country. In Germany, France and Canada, the gap between
the forecast need and spending on infrastructure is the lowest in the
world – less than 2%. Canada is expected to see a 61% rise in GDP by
2040 but if it maintains current trends in investment, it is forecast to
meet 98% of the investment needed for its infrastructure to keep pace.

GDP growth can provide the economic investment to fund infrastructure;
however, despite a 50% increase in US GDP from 2015 through 2040, the US
is expected to meet only 69% of its infrastructure need based on current
spending trends. Outlook projects that spending on US roads and highways
will have to increase US$3.3 trillion by 2040 to meet the forecasted
need, and that investment in rail will need to increase 33% annually
(above the current trend).

Outlook also shows:

• By 2040, the global population will grow by almost two billion people
  – a 25% increase. Rural to urban migration continues with the urban
  population growing by 46%, triggering massive demand for
  infrastructure support.
• The world’s greatest infrastructure needs will be in Asia, which will
  require $52 trillion by 2040 to meet demand.
• Meeting the SDGs for electricity and clean water provision will
  require $3.5 trillion more than is currently needed to close
  infrastructure investment gaps.
• Closing the global investment gap will require annual infrastructure
  investment to increase from the current level of 3% of global GDP to
  3.5%. Meeting SDGs will require this to increase further to 3.7%
  between now and 2030.
• The road and electricity sectors require the greatest spending as the
  global population becomes increasingly urbanised.

Outlook is a world leading project that includes a detailed analysis and
online tool. It is the result of an intensive study of 50 countries and
7 industry sectors by the GI Hub and Oxford Economics, the leader in
global forecasting and quantitative analysis.

“Outlook is a comprehensive and detailed analysis of infrastructure
investment need. It gives the new country and sector spending data that
governments and funding organisations have been calling for,” says
Global Infrastructure Hub CEO Chris Heathcote.

“Outlook tells us three key things, how much each country needs to spend
on infrastructure to 2040, where that need is for each infrastructure
sector, and what their gap is, based on their current spending trends.

"Most significantly it advises governments and the private sector on
where the greatest needs are, and how much should be spent to provide
infrastructure for communities in the future.

“We believe this information will be key to governments, and indeed
those organisations that fund, plan and build infrastructure projects
into the future – and providing sustainable cities with social and
economic benefits for all.”

The Outlook report and online tool can be found at: outlook.gihub.org

Peer review

Outlook is the result of a year-long research partnership with Oxford
Economics. The Global Infrastructure Hub acknowledges the contribution
of peer reviewers: the International Monetary Fund, the European Bank
for Reconstruction and Development, the Inter-American Development Bank,
the Australian Treasury, University of Cape Town, and the Brattle Group.

Notes to editors:

About Global Infrastructure Hub

The Global Infrastructure Hub (GI Hub) was launched in 2014 with a G20
mandate to increase the flow and the quality of opportunities for public
and private infrastructure investment. We work to facilitate a better
supply of quality, bankable government infrastructure projects to the
private sector, identifying reforms, planning approaches and risk
management strategies that drive public-private partnership and
investment into infrastructure. We aim to be a leading reference on
infrastructure best practices, providing innovations that enhance the
market’s ability to finance, build and secure the best returns from
infrastructure projects. For more information about GI Hub, visit: www.gihub.org

Other GI Hub projects include:

• InfraCompass, a new online tool with data and analysis of 49
  countries which pinpoints leading practices for planning, procurement,
  and delivery of public infrastructure: infracompass.gihub.org
• Project Pipeline, a free online platform detailing early-stage
  information on government infrastructure projects across the globe to
  help the private sector make decisions on investment and
  participation: pipeline.gihub.org
• Allocating Risks in Public-Private Partnerships, advice for
  governments and the private sector in conjunction with Norton Rose
  Fulbright: ppp-risk.gihub.org

Relevant UN Sustainable Development Goals (SDGs)

On September 25, 2015 countries adopted a set of goals to end poverty,
protect the planet, and ensure prosperity for all as part of a new
sustainable development agenda.

Goal 6: Ensure access to water and sanitation for
all

Goal 7: Ensure access to affordable, reliable,
sustainable and modern energy for all

For more information, see: http://www.un.org/sustainabledevelopment/sustainable-
development-goals/

Contacts

For further information:
Neibart Group
Morgan Cretella,
718-875-7606
[email protected]
or
Charles
Mathon, 718-801-8824
[email protected]
or
GI
Hub
Catherine Hockley
GI Hub Media and Communications Manager
[email protected]
+61
(0)2 8315 5328 | +61 (0)427 918 630