Private infrastructure investors are expected to increasingly turn their attention to emerging markets in Central and Eastern Europe, according to a report released by Ernst & Young on the current environment and future opportunities for private investment in European infrastructure. Entitled 'Bridging the Gap', the report predicts that investors will focus more of their attention in 2008 and 2009 on emerging infrastructure investment markets in Turkey, Czech Republic, Estonia, Hungary, Latria, Lithuania, Malta, Poland, Slovakia and Slovenia.
Private infrastructure investors are expected to increasingly turn their attention to emerging markets in Central and Eastern Europe, according to a report released by Ernst & Young on the current environment and future opportunities for private investment in European infrastructure. Entitled 'Bridging the Gap', the report predicts that investors will focus more of their attention in 2008 and 2009 on emerging infrastructure investment markets in Turkey, Czech Republic, Estonia, Hungary, Latria, Lithuania, Malta, Poland, Slovakia and Slovenia.
The report looks at countries throughout Europe at varying stages of maturity when it comes to attracting and using private investment capital for infrastructure, commonly known as public private partnerships (PPPs). For example, Ernst & Young said France has reported 35 PPP agreements since the legal framework for using them was established in 2004, including the privatisation of three toll roads for EUR 12 bn. As of 2006, however, Germany had seen slower growth, with only EUR 1.4bn of private investment in infrastructure. Across the European Union (EU), the report found that governments are largely welcoming privately invested capital, while at the same time increasing their own capital commitments to infrastructure projects. Nevertheless, like most industrialised countries around the world, Western European countries have failed to keep up with demand for new infrastructure.
Among emerging markets, Ernst & Young noted PPP legislation has been approved in Hungary, Poland and the Czech Republic since 2003.
'Governments in the increasingly modernising economies of the emerging European markets are starting to compete for increased amounts of foreign investment,' said James Neal, the head of Ernst & Young's infrastructure advisory practice. 'We expect traditional infrastructure investment hotspots such as the UK to remain attractive, but investors are also reaching out to emerging markets in an effort to maximise returns on their infrastructure investment capital.'
