Surety bonds: Essential tools in international infrastructure 

Infrastructure investing is expected to grow across Europe in 2025, and surety bonds are set to play a crucial role in facilitating large-scale, cross-border projects. With our global reach and local expertise, our A-Team of surety experts are uniquely positioned to meet the needs of contractors and project owners. 

European infrastructure investment is on a growth trajectory, with 2024 serving as a year of stabilization and 2025 poised for a moderate acceleration. Infrastructure funds raised over US$40 billion globally in early 2024 according to a report from CBRE Investment Management, reflecting renewed investor confidence. Meanwhile, our in-house forecast anticipates that in 2025 GDP will grow by 1.2% in the Eurozone, powered by increasing infrastructure activity. 

Europe’s governing bodies are backing this momentum with strategic policies and financing. The European Investment Bank and the European Commission have pledged to focus on sustainable projects, with total commitments under the European Commission’s 2025 annual budget set at nearly €193 billion, supported by an estimated €72 billion in disbursements under the NextGenerationEU recovery plan. A significant proportion of this is earmarked for strategic infrastructure investments, an announcement reports. 

Economic growth and international trade rely heavily on infrastructure, yet the scale and complexity of modern, cross-border projects make them potentially risky propositions for owners, contractors, and financiers alike. Multi-country projects involve a diverse set of stakeholders and standards, with local laws, regulations, and compliance requirements to understand, currency fluctuations to contend with, and political risks to navigate. Increasingly, the success of such projects hinges on meticulous planning and globally coordinated strategies. 

The financial security and risk mitigation benefits of surety bonds are well known. They are essential for large-scale infrastructure projects, guaranteeing the performance of contractors and ensuring they fulfil obligations. Indeed, when it comes to bidding for infrastructure contracts, contractors are often obliged to have surety bonds in place before project owners will consider their bid. Moreover, surety bonds represent an effective financing alternative to bank guarantees, freeing up lines of credit for contractors to use elsewhere and improving their liquidity. Our A-Team can provide a variety of surety solutions, tailored to your needs. 

Surety bonds from a global provider such as Allianz Trade offer additional cross-border protections. They are tailored to local laws and regulations and adapted to varying compliance needs, offering one consolidated solution spanning multiple jurisdictions.  

Large-scale infrastructure projects are often multibillion-euro ventures, involving complex coordination and significant investment of time and resources from all stakeholders. Having the appropriate guarantees in place protects the scale and complexity of these projects, ensuring financial stability and accountability at each stage. Moreover, surety bonds help to align expectations among multiple international stakeholders, reducing uncertainty and allowing for smoother collaboration. 

Due to the complexity of large-scale infrastructure projects, bespoke surety solutions are often required. Shared facilities can be a necessity for financing multibillion-euro projects, for example. Meanwhile, if your company is set up as a multinational, you may want its status represented in your surety solution. Whatever your requirements, we can tailor our facilities based on your specific needs.

However, here are six types of surety facility our A-Team specializes in: 

As the European infrastructure landscape evolves, we’re committed to adapting our surety bond solutions to meet the future needs of our project partners and pave the way for a more sustainable future. 

While Europe transitions away from fossil fuels, shuns traditional networks and services, and embraces digital solutions, energy and transport infrastructure become crucially important. Sectors like renewable energy and smart cities therefore represent huge surety potential. 

Global uncertainties and a generally more challenging risk environment are likely to make the infrastructure market much more unpredictable. Local laws and regulations can change quickly, derailing large-scale projects. With this outlook, it’s even more vital to partner with a surety provider that’s as close to local markets as we are, and who understands the dynamics at play. 

As the surety market innovates, automation and the growing use of e-bonds promise to bring efficiencies to bond issuance and management. Integrating with digital tools will be essential for surety providers, and we offer an online portal that makes it easier and faster for clients to raise new bonds (including e-bonds) and track their status. 

Looking ahead, Allianz Trade is committed to driving innovation in the surety market, further enhancing our suite of solutions to allow transformative infrastructure projects to flourish. Whether you’re a contractor embarking on large-scale construction, or a project owner managing a network of global stakeholders, our tailored surety solutions can protect your interests and safeguard your infrastructure development.

Our experts have a proven track record and unparalleled access to local markets, making us your ideal surety partner for large-scale, cross-border projects.