Executive Summary
Over the next decade, the global economy will need to invest nearly 3.5% of GDP per year (USD 4.2trn) to future-proof social, transport, energy and digital infrastructure against megatrends such as urbanization, supply-chain disruptions and AI-driven digitalization. Demographic shifts and urbanization are key drivers for infrastructure demand in emerging markets, while aging infrastructure needs an upgrade in developing markets. At the same time, geopolitical tensions and pandemic disruptions exposed the fragility of supply chains, prompting the US and Europe to reshore or “friendshore” some critical manufacturing, spurring demand for domestic manufacturing facilities and associated logistics infrastructure (warehouses, ports, rail). Digital infrastructure is already struggling to keep up with the surge in power demand as data centers multiply at a record pace amid the AI boom. We estimate that the US needs to invest over USD1trn over the next 10 years on non-energy infrastructure, especially on roads. China needs to reach USD1.5trn, while India will require approximately USD1trn. France, Germany, the UK and Spain need to invest a combined USD0.5trn. Overall, the global economy will need to spend USD11.5trn over 10 years, with two-thirds of that total required in emerging economies. Latin America exemplifies this dynamic: the region faces distinct infrastructure needs driven by rerouting, friendshoring and trade diversification, yet developers must also navigate elevated risk levels.
The global push to cut carbon emissions and electrify our economy is the major catalyst for infrastructure investment, reaching between USD26trn and USD30.2trn by 2035 (69% of the total). Despite a doubling of renewable generation investment over the past decade, infrastructure development – such as grids and storage – has lagged, creating bottlenecks and driving up system costs. In Europe alone, an estimated USD110–150bn will be needed annually to develop electricity networks and energy storage, with major investments directed toward distribution and transmission grids and cross-country interconnections.. Globally, the annual energy infrastructure investment gap remains at USD1.5trn, with underinvestment particularly acute in the U.S. and emerging markets. Bridging this gap is essential not only to meet rising power demand, but also to align with climate goals and enhance energy security.
Against this backdrop, private capital has moved from gap‑filler to the cornerstone of global infrastructure finance, with unlisted assets under management surging from <USD25bn in 2005 to >USD1.5trn in 2024. Investors are pivoting from traditional transport and utilities toward energy‑transition and digital platforms (grids, storage, data centers, fiber). Beyond capital, this shift brings lifecycle efficiency, delivery discipline, and risk-sharing via public-private partnerships, direct ownership, and a fast‑growing private infrastructure debt market. Allocations are now segmented by risk, targeting steady, inflation‑linked cash flows rather than private-equity‑like upside. Most investors aim for 6–10% returns, consistent with our 8–10% forward view.
The next phase of global infrastructure investment must be defined by both ambition and execution. While mobilizing 3.5% of global GDP annually is necessary, it is not sufficient. Now, what matters is aligning capital, policy, and system design to overcome the real-world constraints that continue to slow delivery. The barriers are increasingly structural, ranging from permitting delays and grid congestion to fragmented regulatory frameworks and institutional capacity gaps in EMDEs. Addressing these challenges will require a dual shift. First, governments must fast-track permitting and land-use approvals, harmonize remuneration and regulatory frameworks across jurisdictions, and introduce fast-track mechanisms for priority infrastructure. Simplifying and digitizing procurement processes can reduce lead times and improve transparency. Enhancing project preparation facilities and technical assistance, particularly in lower-income regions, will be key to moving projects from concept to bankability. Strengthening the capacity of subnational authorities and state-owned enterprises, which are often key implementers, is equally critical. Investors must transition from broad allocations to more targeted, theme-based strategies that focus on energy systems, digital infrastructure, resilient urban mobility, and social infrastructure to deliver resilient, inflation-linked returns. Greater use of blended finance and risk mitigation tools is also required to mobilize capital at scale in high-risk regions. Without this alignment, execution will remain the bottleneck. System costs will rise, stranded assets will proliferate, and the gap between infrastructure ambitions and physical delivery will continue to widen.