Enormous infrastructure investments needed: where will the money go until 2050?

Enormous infrastructure investments needed: where will the money go until 2050?

In a comprehensive analysis Aberdeen Investments highlights the alarming demands on global infrastructure investment. Accordingly, these must rise to a total of 64 trillion US dollars by 2050, which corresponds to an annual expenditure of around 1.7% of global GDP. Such an increase is necessary to meet the increasing needs of the world's population and the challenges posed by climate change and urbanization.

The analysis, which looks at infrastructure needs in 47 countries, shows that emerging markets account for around $43 trillion of the investment needed, while developed nations need to provide around $21 trillion. The largest single item is investment in global road networks, which need to be expanded by seven million kilometers at an estimated cost of $28 trillion.

Challenges for investors

Given high national debt, rising interest rates and higher defense spending, governments are increasingly finding their scope for action limited. This makes private investors indispensable in closing the existing financing gap. According to Aberdeen Investments, the energy supply sector, which requires a doubling of electricity generation capacity from 8,000 GW to over 21,000 GW by mid-century, will become the second largest area of ​​investment. China's share of this investment is estimated at $12 trillion, accounting for almost a fifth of the world's total spending on infrastructure.

However, the major challenge remains the transition to renewable energy, which requires additional infrastructure investments to replace thermal capacity. Christopher Segal, principal analyst at Aberdeen, highlights the important role of listed infrastructure companies, which are seen as key players in bridging the investment gap. At the same time, it should be noted that social infrastructure such as education, health and public housing are not taken into account in this analysis.

Cross-border infrastructure in Europe

Another aspect of global infrastructure investment concerns the European environment the Federal Ministry for Economic Affairs and Climate Protection emphasized. Europe needs modern infrastructure, which is crucial for green and digital transformation. The expansion of cross-border infrastructure can not only promote growth, but also increase employment in economically less developed regions. Scientific studies show that a close connection to transport networks and digital infrastructures is essential for regional development.

However, the challenges in implementing such projects are considerable. Differences in regulations and low participation by private investors make the development of cross-border infrastructure difficult. Overcoming these hurdles requires measures to strengthen investment, including reducing regulatory barriers and accelerating project planning and approval. The focus is on areas such as energy infrastructure, strengthening it to increase security of supply and promote the use of renewable energy.

In summary, global and European infrastructure investments face major challenges, but also offer opportunities. In order to meet increasing demands, a cooperative approach is essential, in which both private and public actors must play a central role.