Investor demand for sustainable infrastructure continues to increase with $25.5 billion of capital being poured into funds focusing on environmental and social issues in the first three quarters of last year. This comes against the backdrop of inflation, rising rates and a potential recession. Sustainable infrastructure is being viewed as a safe place to invest to achieve long-term growth.
In the last decade, the average capital raised for sustainable infrastructure has exploded. According to a research paper released by Pitchbook, "from 2008 to 2019 the average capital raised by the top 20 sustainable infrastructure funds was $1.8 billion. For 2020, 2021, and the first three quarters of 2022, those numbers were up to $4.9 billion, $28.5 billion, and $25.5 billion, respectively".
The key factors driving this trend in investment are "the urgency towards climate change and the increased social awareness around the issue". With this knowledge, the growing importance of sustainable infrastructure is clear and the global need to "green" current and future infrastructure projects is imperative in the fight against the seemingly impending climate crisis.
Fundraising for infrastructure investing as a whole has risen over the past decade, with 2021 representing an unprecedented high at $127.9 billion across 94 funds. And while that number had only hit $95.2 billion by the third quarter of 2022, last year’s total is still expected to be in line with recent averages.