Macquarie Bank Group welcomes findings of OECD report on global infrastructure needs

15 May 2007

Report highlights need for increased private investment alongside the public sector

A major report launched today at the OECD forum, ‘Global Infrastructure Needs: Prospects and Implications for Public and Private Actors’ identifies a growing gap between infrastructure needs and available public investment, and recommends a range of innovative approaches to address the imbalance. 

Macquarie Bank, a participating sponsor of the two-year study behind the report, welcomes the report and its findings.

The report is the result of an extensive international consultation process undertaken by the OECD and involving government departments and agencies, corporations and research institutes. The purpose of the project was to propose a set of policy recommendations to OECD governments that aims to enhance infrastructures’ contribution to economic and social development, and to consider the long-term opportunities and challenges facing infrastructures worldwide.

Principal policy recommendations outlined in the report include the following:

• Encourage public private partnerships (PPPs) as a means of raising additional financing for infrastructure investment and diversifying business models
• Encourage the investment of pension funds and other large institutional investors in infrastructures
• Examine the legal and regulatory framework conditions with a view to encouraging the emergence of fresh sources of capital and new business models for the construction, maintenance and operation of infrastructures
• Explore the potential for new institutional arrangements that may provide more effective and efficient financing, funding and/or delivery of infrastructure
• Reduce the vulnerability of long-term infrastructure planning and implementation to short-term thinking and priority setting.

“This is an important and extensive research report and we welcome its findings and conclusions,” said Mr Jim Craig, Head of the Macquarie Bank Group in Europe.

“The report highlights the need for increased private investment alongside the public sector. In particular, the patient capital of pension funds – which amounts to around US$18 trillion in the OECD area - is identified as ideal for long-term ownership of essential community services,” Mr Craig said.

“We believe infrastructure funds have the potential to help bridge the gap between shrinking public funding and the growing demand for essential community services,” said Jim Craig, Head of the Macquarie Bank Group in Europe.

“The long-term approach of the pensions and insurance industries is a key factor for public sector stakeholders, combined with responsible asset management under mature regulation,” he said.

The report also notes that new public-private business models are increasingly used internationally, offering further scope for unlocking private sector capital and expertise. It encourages Public Private Partnerships as a means of raising infrastructure finance, particularly from pension funds and other large institutional investors.

In addition, the report underlines the importance of stable regulations and frameworks to improve reliability, establish standards and increase competition.

Copies of the report are available from the OECD, contact:
Barrie Stevens
Deputy Director, Advisory Unit to the Secretary General, International Futures Program
barrie.stevens@oecd.org

EDITORS NOTES

The Macquarie Bank Group

The Macquarie Bank Group (Macquarie) comprises Macquarie Bank Limited and its worldwide affiliated entities including funds under management. Members of the Macquarie Bank Group manage more than €33 billion in equity invested in infrastructure and essential service assets around the world through a range of listed and unlisted vehicles. Infrastructure investments managed by Macquarie include assets in the energy, water, telecommunications and transportation sectors in the UK, Germany, Portugal, Italy, France, Sweden, Denmark, the Netherlands, Belgium, Canada, US, Australia, Korea, Japan and South Africa.  Macquarie aims to manage investments in infrastructure assets profitably and responsibly.

The Macquarie Bank Group recently announced that it had closed two new infrastructure funds, raising a total of more than US$10 billion from major pension funds and other institutional investors around the world.

For further information, please contact:

Karen Smith
Corporate Communications Manager
Macquarie Bank
Tel: (44) (0) 20 7065 2420