Infrastructure Index: Middle East pipeline promise

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Creating an attractive environment for investors in infrastructure is no easy task. Politics and policy can make or break private participation and the flow of investment. This sentiment is abundantly clear in this year’s CMS Infrastructure Index, which ranks 40 jurisdictions in order of infrastructure investment attractiveness.

This supplement to the Infrastructure Index examines the opportunities in the Middle East specifically – and the outlook is positive. The investment climate for international investors is hotting up as the region focuses on PPPs and privatisations.

The UAE ranks highest in the region. Its strong economy, global hub status, 2015 PPP legislation and the upcoming Expo 2020 are driving this position. AED11bn in construction contracts for Expo 2020 are already awarded with more expected to follow.

The Middle East is continuing to persify away from oil and take advantage of its natural solar resources. The region also has solid plans around healthcare, transport, water and sewage, offering some prime opportunities for investors.

David Cox of Mott MacDonald, sees the Middle East benefit from political uncertainty elsewhere. Brexit, for example, is pushing political attention towards foreign direct investment with traditional trading partners, including Middle Eastern nations. As with all countries featured in the Infrastructure Index, political stability and certainty are important ingredients to ensure a flow of private capital and a pipeline of projects that reach a successful close.

Cox reflects on the region’s “openness to learn, change and take ideas from the outside”. This, no doubt, is helping other countries, such as Saudi Arabia, to develop ambitious plans for improving infrastructure across all asset types.

In addition, as traditional infrastructure asset classes become more competitive, investors are increasingly looking to alternatives. Examples including 4G and fibre optic networks, all of which are creating a platform for smart cities and the Internet of Things.

We would like to thank our interviewees for giving up their valuable time to share and contribute their views on the infrastructure sector in their respective markets.