REPORT

Infrastructure
Investment Outlook
2024
A turning tide?
Management
summary

2023 was a challenging year for the infrastructure

segment of the alternatives universe. After a resilient
performance in 2022, infrastructure deal activity
suffered a blow in 2023. Challenging financing
conditions led to a more pronounced decline in
deal count and deal size than was anticipated by
fund managers and advisors. This decline is still less
pronounced and delayed when compared to the
decline seen in private equity buyouts. A wave of
consolidation that started in 2022 continued well
into 2023 and 2024 reaching a peak with BlackRock
acquiring GIP and General Atlantic acquiring Actis.
Notwithstanding the headwinds to deal count and
fundraising continuing into the first quarter of 2024,
the near-term outlook appears more optimistic than
what we saw a year earlier. The need for capital
to develop long term sustainable infrastructure is
larger than ever, and fund managers are responding
in many ways. Thematic investments in energy
transition, transport decarbonization, and circular
economy are expected to continue, and so is the
focus on hybrid infrastructure assets. In this report
we start at a macro level, dissecting the broader
Cover: GettyImages

investment and fundraising trends, before moving to

sector-level analysis, where we address key frontier
topics by sector.

2 Roland Berger | Infrastructure Investment Outlook 2024

Contents

Page 4 1 Infrastructure M&A development and fundraising

9 2 Current sentiment and outlook for 2024

13 3 Sector outlook analysis

13 3.1/ Energy
18 3.2/ Utilities
20 3.3/ Transport
24 3.4/ Digital infrastructure
26 3.5/ Social infrastructure
28 3.6/ Hybrid infrastructure

3 Roland Berger | Infrastructure Investment Outlook 2024

 1
Infrastructure M&A development and fundraising

Macro headwinds that started blowing in 2022 continued well into 2023 significantly affecting
infrastructure M&A activity. In 2023, global infrastructure M&A deal count declined 21 % y-o-y,
while average deal size dropped 16 %. This decline is stronger than what most respondents of
our Infrastructure Investment Outlook 2023 survey expected as of Jan 2023. Worsening
macroeconomic situation as the year 2023 progressed was the reason. It is also the first time
since 2013 that average deal size declined for two years in a row (2022 and 2023). Figure 1

1 Global infrastructure deal count and average size1

Average
Deal count deal size
[#] [USD m]
3,453 3,476
3,500 750
2,899 700
3,000 2,919 2,930 650
2,804 2,653
2,587 600
2,518
2,500 2,374 550
2,100 500
450
2,000
400
350
1,500
300
250
1,000 200
150
500 100
50
0 0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Avg. deal size Deal count

1. Average deal size for deals with a known value

Source: Preqin

4 Roland Berger | Infrastructure Investment Outlook 2024

 Europe and North America continued to account for over two-thirds of the global deal count.
In fact, their share in the global deal count grew by 5 pp over 2022 as M&A activity declined
more rapidly in APAC and the Rest of the World. This excludes 2019 and 2021, where a few
mega deals skewed the picture; average deal size in 2023 in North America was still higher
than what was seen historically. Figure 2

2 Infrastructure deal count and average size by geography

Deal count [#]

3,453 3,476

2,919 2,930 2,899

2,804
2,587 2,653
2,518
2,374
2,100

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Europe North America APAC Rest of the world

Average deal size1 [USD m]

1,300
1,200
1,100
1,000
900
800
700
600
500
400
300
200
100
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Europe North America APAC Rest of the world

1. Average deal size for deals with a known value

Source: Preqin

5 Roland Berger | Infrastructure Investment Outlook 2024

 Energy continues to be the largest infrastructure sector, despite a decline in deal count in
2023. No sector was immune to the macro headwinds, but M&A activity declined steepest in
Transport and Social infrastructure (-48 % and -73 %, respectively). One segment not covered
in this data is Hybrid infrastructure — the crossover space between business services and
infrastructure assets — and it has been gaining a lot of attention from infrastructure investors.
Figure 3

3 Infrastructure deal count and average size by sector

Deal count [#]

3,453 3,476

2,919 2,930 2,899

2,804
2,587 2,653
2,518
2,374
2,100

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Energy Utilities Transport Digital infrastructure Social infrastructure2 Other3

Average deal size over 2013-231 [USD m]

1,400
1,300
1,200
1,100
1,000
900
800
700
600
500
400
300
200
100
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Energy Utilities Transport Digital infrastructure Social infrastructure2

1. Average deal size for deals with a known value; 2. Includes healthcare and education; 3. Includes diversified,
defence, government buildings and unassigned deals

Source: Preqin

6 Roland Berger | Infrastructure Investment Outlook 2024

 The most pronounced impact of the slowdown has been on new capital. Infrastructure
fundraising declined by >50 % in 2023 from its 2022 peak of USD 157 bn. Fundraising for the
Core strategy experienced the steepest decline, while that for the Opportunistic strategy
doubled, albeit from a small base. Allocation to the Core+ strategy declined in 2023 y-o-y, but
remains significantly above historical levels. Since 2018, the share of North America in global
fundraising has grown significantly, especially for the Core+ strategy. Figures 4 & 5

4 Infrastructure fundraising by fund strategy, 2018-23 [USD bn]

157

138

105 105
94

74

2018 2019 2020 2021 2022 2023

Core Core+ Value add Opportunistic

Source: Preqin

7 Roland Berger | Infrastructure Investment Outlook 2024

 5 I nfrastructure fundraising by geography and fund strategy, 2018-23
[USD bn]

45 %
38 %
47.6
39.6

10 %
7%

11.0
6.9

2018
Europe North America APAC Rest of the World

52 %

82.1
40 %

62.4

4% 4%

7.0 5.1

2022
Europe North America APAC Rest of the World

61 %

45.0
35 %

25.7
3% 2%

1.9 1.2
2023
Europe North America APAC Rest of the World

% % of total Core Core+ Value add Opportunistic

Notes: Percentages may not add up to 100 % due to rounding

Source: Preqin

8 Roland Berger | Infrastructure Investment Outlook 2024

2
Current sentiment and outlook for 2024

To gauge investors’ expectations for infrastructure investments in 2024, we surveyed

experienced investment bankers and fund managers. 60 % of the respondents expect
infrastructure deal count in 2024 to grow slightly or moderately compared to 2023, while 14 %
expect it to grow strongly. This sentiment is strongest for deals below USD 2 bn. The outlook
for larger deals is less optimistic but has improved when compared to that from our 2023
survey results. Figure 6

6 Outlook for infrastructure deal count – 2024 vs. 2023

Investment outlook – Overall [ % of respondents]

Most respondents expect infrastructure deals to

grow up to 10 % y-o-y in 2024

45
40
35
30
25
20
15
10
5
0
N = 49

Investment outlook – By asset size [ % of respondents]

The positive sentiment persists across all deal size brackets,

but is stronger for deals under USD 2 bn in value

45
40
35
30
25
20
15
10
5
0
<USD 0.5 bn USD 0.5-1.0 bn USD 1.0-2.0 bn USD 2.0-5.0 bn >USD 5.0 bn

N = 44 N = 42 N = 42 N = 41 N = 40

Strong decline (below -10 %) Moderate decline (-5 % to -10 %) Slight decline (up to -5 %)

Stable (c. 0 %) Slight growth(0 % to 5 %) Moderate growth (5 % to 10 %) Strong growth(10 %+)

Source: Preqin

9 Roland Berger | Infrastructure Investment Outlook 2024

 Respondents were most optimistic about North America, where the majority expect
moderate-to-strong growth in infrastructure deal count in 2024, with none of the
respondents expecting a decline. Comparatively, there is a reasonable distribution of
responses for Europe, where, consensus optimistic outlook notwithstanding, a quarter of
the respondents expect deal count to remain flat or even decline. The sentiment differs
significantly across sectors, being more upbeat for Transport, Energy, Digital and Hybrid
Infrastructure than for Social Infrastructure and Utilities. Figures 7 & 8

7  utlook for infrastructure deal count by geography – 2024 vs. 2023,

O
[ % of respondents]

45

40

35

30

25

20

15

10

0
Europe North America Asia-Pacific Rest of world
N = 50 N = 38 N = 18 N = 17

Strong decline (below -10 %) Moderate decline (-5 % to -10 %) Slight decline (up to -5 %)

Stable (c. 0 %) Slight growth(0 % to 5 %) Moderate growth (5 % to 10 %) Strong growth(10 %+)

Source: Roland Berger Infrastructure Investment Outlook Survey 2024

10 Roland Berger | Infrastructure Investment Outlook 2024

 8 
Outlook for infrastructure deal count by sector – 2024 vs. 2023
[ % of respondents]

60
55
50
45
40
35
30
25
20
15
10
5
0
Transportation Energy Utilities Social infrastructure:
(including waste) Healthcare
N = 50 N = 50 N = 50 N = 50

60
55
50
45
40
35
30
25
20
15
10
5
0
Social infrastructure: Digital Infrastructure Hybrid infrastructure
Education assets
N = 50 N = 50 N = 50

Strong decline (below -10 %) Moderate decline (-5 % to -10 %) Slight decline (up to -5 %)

Stable (c. 0 %) Slight growth(0 % to 5 %) Moderate growth (5 % to 10 %) Strong growth(10 %+)

Source: Roland Berger Infrastructure Investment Outlook Survey 2024

11 Roland Berger | Infrastructure Investment Outlook 2024

 Respondents specified several macroeconomic and geopolitical factors responsible for
their outlook for infrastructure investments in 2024. On the two most crucial factors affecting
infrastructure investments; 1. Financing availability and interest rates and, 2. Macroeconomic
situation, vast majority of respondents expect the situation to improve in 2024. As a result,
46 % of the respondents expect fundraising in 2024 to be easier than in 2023.
Figure 9

9 Factors influencing infrastructure investments and fundraising in 2024

Development of factors influencing infrastructure investments – 2024 vs. 2023

[ % of respondents]

1 Availability of debt financing and interest rates N=50

Decreasing order of importance

2 Overall economic situation/economic cycle N=50

3 Availability of attractive acquisition targets N=50

4 Global infrastructure funding gap N=50

5 Geopolitical environment
(e.g., Ukraine war, trade conflicts)
N=48

93 % 88%

A vast majority of respondents More than four-fifths of the

believe it will be easier (46 %) or respondents believed that
take the same effort (48 %) to value-creation will become more
fundraise in 2024 relative to 2023 important in 2024 vs. 2023

Worsen Improve Remain stable

Source: Roland Berger Infrastructure Investment Outlook Survey 2024

12 Roland Berger | Infrastructure Investment Outlook 2024

3
Sector outlook analysis

We further surveyed the participants on various infrastructure sectors to

understand two key aspects:
1 . Investment focus: Given the current macroeconomic environment, how do
participants expect their investment focus to change across the Core, Core+, and
Value-add strategies. At a broader level, most respondents considered Core+ and
Value-add assets as more attractive in 2024 than in 2023. There were nuances in
some sub-sectors which we address in the respective sections.

2. Future attractiveness: In addition, we wanted to understand which infrastructure

assets are deemed more attractive in 2024 than they were in 2023. We also gathered
interesting insights into each of the sub-sectors and asset types which investors
expect to focus on in 2024. We delve into each of the sectors, presenting the output
of the survey and Roland Berger’s views on investment activity in these sectors.

13 Roland Berger | Infrastructure Investment Outlook 2024

 3.1 Energy

In 2023, deal making momentum in the Energy sector continued to be underpinned by

secular tailwinds – decarbonization, energy transition and sustainability. The sector in
general suffered less than other infrastructure sectors as deal count dropped ~11 % y-o-y.
Figure 10

10  actors influencing infrastructure investments and fundraising in

F
2024

Relative focus by asset type – 2024 vs. 2023 [ % of respondents]

55
50
45
40
35
30
25
20
15
10
5
0
Core Core+ Value add
N = 38 N = 39 N = 39

Decrease significantly Decrease slightly No change Increase slightly Increase significantly

Source: Roland Berger Infrastructure Investment Outlook Survey 2024

14 Roland Berger | Infrastructure Investment Outlook 2024

 10  actors influencing infrastructure investments and fundraising in
F
2024 (continued)

Most attractive assets (N=43) [ % of respondents]

Energy storage/batteries 77 %

Biogas 56 %

Heat electrification/heat pumps 44 %

Energy efficiency schemes 40 %

Sustainable aviation fuels (SAFs) 40 %

CCUS (Carbon capture, utilization and storage) 28 %

Grid scale solar 26 %

Other biofuels 19 %

LNG regasification and onshore storage 16 %

Onshore wind 16 %

Low carbon hydrogen (Green and Blue) 14 %

Offshore wind 14 %

LDES - CAES, Liquid to Air 5%

Nuclear - SMR 5%

Energy storage and battery Low carbon fuels, such

assets are highly attractive as biogas and SAFs are
to investors, as energy increasing in attractiveness
distribution continues to be as both use cases and
a key challenge feedstock options expand

84 % Most energy investors prefer

brownfield projects (56 %) to
greenfield ones, or have no
explicit preference (28 %)

Respondents to our survey overwhelmingly highlighted a stable and improving outlook for
deal making in the sector in 2024, with a focus on Core+ and Value-add strategies. ~55 % of
the respondents also indicated a preference for brownfield investment opportunities.

15 Roland Berger | Infrastructure Investment Outlook 2024

 Energy Storage (BESS) continues to be the most attractive asset type according to ~77 % of
the respondents, with batteries playing a crucial role in flexible and dispatchable power
systems characterized by growing penetration of renewables. While the UK and the US
continue to be the leading markets, investors are increasingly looking into new growth
markets such as Germany, Italy and Greece.

Biogas and biomethane have also garnered significant interest, driven by the role of
biomethane in decarbonizing heat and transport. In addition to various government
incentives, a key impetus is RePower EU with a target of 35 bcm of sustainable biomethane
production by 2030. Buoyant investor sentiment is supported by offtake agreements and the
opportunity to build scalable platforms with diverse revenue streams.

Not surprisingly, electrification of heat (heat pumps) and energy efficiency schemes are top
5 constituents for two consecutive years. Rounding off the top 5 asset category is Sustainable
Aviation Fuels (SAF) – the primary decarbonization lever for the aviation sector – with 60-70 %
of major global airlines now targeting ~10 % SAF uptake on average by 2030.

CCS also continues to be of interest, albeit the opportunities to invest in large scale transport
and storage infrastructure are currently limited. There is considerable interest, however, in
capture technologies/solutions – both new and existing.

Asset categories that appear to be relatively less appealing to investors in 2024 include
offshore wind, low carbon hydrogen, long duration energy storage (excl. BESS) and nuclear
(SMR).
• The offshore wind sector has been subject to a series of negative press – failed
auctions, impairments, and headwinds such as supply chain challenges, cost
inflation , bureaucratic hurdles , and inefficient leasing. While long-term
fundamentals remain intact for offshore wind, there is understandable nervousness
regarding near-term greenfield investments.

• While hydrogen continues to intrigue investors, they recognize the nascency of

offtake agreements which can adversely impact the investment thesis.
Opportunities to co-invest with energy and utility companies (involved in production
and offtake) can be explored further.

• Other LDES technologies (mechanical and thermal) are selectively of interest to

investors as they are yet to reach BESS proliferation levels driven by their unique
applications, scalability limitations, and exit considerations.

• Investors are also cautiously intrigued by novel nuclear reactor technologies

(e.g., SMR), but are fully cognizant of the timeline to large scale commercialization
and strong potential for cost and time overruns.

16 Roland Berger | Infrastructure Investment Outlook 2024

 11 Biomethane deep dive – survey results

Most appealing aspects of investing in biomethane assets (N=40) [% of respondents]

Offtaker willingness to pay 70 %

Platform scalability 55 %

Decarbonization target
38 %
contribution of biomethane

Margin profiles 23 %

Diversity of revenue pools 15 %

Key concerns regarding investing in biomethane assets (N=40) [% of respondents]

Feedstock availability 78 %

Technology risk 65 %

Offtake demand 60 %

Long-term margin expectations 43 %

Regulatory risk 30 %

Source: Roland Berger Infrastructure Investment Outlook Survey 2024

17 Roland Berger | Infrastructure Investment Outlook 2024

 Zoom in: Biogas

The advent of biogas/biomethane as a Top 5 asset

category for 2024 necessitates a closer look at the
underlying European market dynamics.

Europe has strategically positioned biomethane as a crucial component of its

decarbonization and sustainability agenda. In addition to being a valuable commercial
product emanating from anaerobic digestion, biomethane helps with curtailing greenhouse
gas emissions and embraces the principles of a circular economy.

Biomethane production in Europe is intricately tied to three primary feedstocks — energy

crops, organic waste, and animal manure. The European Union’s Renewable Energy Directive
(EU RED II) strategically incentivizes feedstocks with high greenhouse gas saving potential –
animal manure being notably prized over energy crops and organic waste due to its low
carbon intensity. Feedstock sourcing strategies need to consider factors such as feedstock
availability, transportation costs, and local policies, all of which impact the economic
feasibility of biomethane production.

Biomethane offtake primarily falls into two categories – transport and generation. The
transport sector, fuelled by RED II, presents a compelling offtake market for biomethane
(bio-CNG or bio-LNG) for hard-to-electrify transport applications such as long-haul heavy-
duty trucks. From a generation perspective, biomethane is a valuable drop-in substitute for
natural gas in terms of grid injection for decarbonizing residential and commercial heat
applications.

18 Roland Berger | Infrastructure Investment Outlook 2024

 The attractiveness of these offtake segments varies across countries in the EU. While
Germany places a strong emphasis on decarbonizing the transport sector, the Netherlands
leans more towards the role of biomethane in district heating.

Beyond these offtake streams, new opportunities are emerging. Of particular importance is
the potential for biogenic CO2 (byproduct during the upgrade of biogas to biomethane) in
the production of e-fuels and SAF.

The European biomethane market is currently experiencing pricing disparities driven by

differing national regulations and subsidy systems. Notably, the price for biomethane
guarantees of origin (GO) is ~1-2 EUR/MWh in France, compared to ~10 EUR/MWh in the
Netherlands and Denmark. The lack of Standardized regulations currently impedes cross-
border biomethane trade in Europe. However, there is a clear desire to move towards
harmonization via a European biomethane trading system involving certification schemes
such as EU UDB (Union Database for Biofuels), ERGaR (European Renewable Gas Registry).
Bilateral trading agreements between countries such as Austria, Denmark, Germany, and
the UK are also under consideration.

As the secular tailwinds of Energy Transition and decarbonization gain further momentum
spurred by national targets and NDCs, we envisage the Energy sector to remain a favorite
with investors.

19 Roland Berger | Infrastructure Investment Outlook 2024

 3.2 Utilities

Investment in global utilities, perhaps one of the most mature core infrastructure asset
classes, is facing material change due to the weakening fiscal positions in the OECD and the
demands of energy transition. This is depressing deal volume, particularly for large deals but
simultaneously creating new Core+ opportunities. Figure 12

12 Biomethane deep dive – survey results

Relative focus by asset type – 2024 vs. 2023 [ % of respondents]

50
45
40
35
30
25
20
15
10
5
0
Core Core+ Value add
N = 38 N = 39 N = 36

Decrease significantly Decrease slightly No change Increase slightly Increase significantly

Most attractive assets within utilities infrastructure (N=39) [ % of respondents]

Waste management 72 %

Heat networks/district heating 56 %

Electricity last mile infrastructure 46 %

Electricity distribution networks 38 %

Water last mile infrastructure 21 %

Water distribution networks 21 %

Gas last mile infrastructure 13 %

Gas distribution networks 10 %

Waste management continues District heating networks are gaining

to be the most attractive prominence as high energy prices
segment within utilities drive the push for efficiency

Source: Roland Berger Infrastructure Investment Outlook Survey 2024

20 Roland Berger | Infrastructure Investment Outlook 2024

 Some of the early-mover markets like the UK are seeing a step change in risk associated with
Utilities infrastructure. Gradually growing populations, historical regulatory underinvestment,
early impacts of climate change, falling living standards, and rising interest rates are
conspiring to distress water utilities at a time when demands for investment in pollution
reductions are at an all-time high. Waste management businesses are mulling the gradual
emergence of carbon pricing. Gas distribution utilities are facing the dual headwinds of
reducing heat loads and increasing electrification, the latter providing a strong tailwind for
electricity DSOs. None of this change is necessarily conducive to a market for which extreme
predictability has attracted some of the lowest hurdle-rate investment in the world.

Where this change is, however, producing a growing investment thesis is in utility-adjacent
sectors; this is clearly visible in our survey in the anticipated growth of smaller Core+ deal
flow. An example of this is in private networks and other last mile infrastructure.

Providers of non-regulated or part-regulated last mile electrical networks, the UK

incarnation of which are iDNOs, are enjoying a period of great promise. These players, many
of which also provide other multi-utility gas and water offers, were introduced to bring price
competition to the DNO market around twenty years ago and have been a relatively quiet
backwater for investment. Today, with encouragement from demand for new housing and,
particularly, from EV charging infrastructure markets, they are facing some areas of non-
linear growth. These markets are hungry for capital, and, with the potential to access
adjacent energy transition themes like solar and heat pumps if emerging business models
can be proven, can point to strong upsides. We expect investment opportunities of this kind
to be of great interest going forward. Some of these have already been prominent in the last
twelve months.

21 Roland Berger | Infrastructure Investment Outlook 2024

 3.3 Transport

Investors’ appetite for Transport infrastructure waned in 2023. Deal count was down ~50 % on
the annual average over the previous five-year period. However, there is a more positive
outlook on the sector for 2024, with increasing interest in Core+ and Value-add strategies.
This is supported by volume performance surpassing pre-Covid levels for some assets in key
transport sub-sectors such as airports, car parks, and ports. Figure 13

13 Transport infrastructure – survey results

Relative focus by asset type – 2024 vs. 2023 [ % of respondents]

60

50

40

30

20

10

0
Core Core+ Value add
N = 43 N = 43 N = 43

Decrease significantly Decrease slightly No change Increase slightly Increase significantly

Source: Roland Berger Infrastructure Investment Outlook Survey 2024

22 Roland Berger | Infrastructure Investment Outlook 2024

 Most attractive assets within transportation infrastructure (N=47) [ % of respondents]

EV charging for commercial fleets 72 %

First and last mile logistics 49 %

Motorway Service Areas (MSAs) 36 %

EV charging infrastructure (passenger cars mainly) 30 %

Mobility hubs 28 %

Fuelling stations for commercial fleets

26 %
(hydrogen, biofuels)

EV charging hubs (passenger cars mainly) 28 %

Car parks 21 %

Toll roads 17 %

Fueling stations 0%

Electrification of commercial fleets

continues to be seen as the "next big
thing" in transportation investment

Source: Roland Berger Infrastructure Investment Outlook Survey 2024

23 Roland Berger | Infrastructure Investment Outlook 2024

 Electrification remains a driving force

Electric mobility continues to transform the landscape of Transport infrastructure. While

headwinds to electrification of the vehicle parc (politicking including sales ban delays,
challenging macroeconomic conditions, supply side disruptions, variable corporate strategy
focus, etc.) have presented themselves in recent months, electrification of commercial
fleets continues to be a key next topic. With advancements in EV technology, charging
infrastructure, and more favorable cost of ownership, widespread adoption of EVs in fleets
draws ever closer. Specifically in HGV charging, depot storage/charging infrastructure and
fuelling/charging network assets appeal to investors, albeit with concerns over utilization
risk, technology risk, and margin pressure, in what is still a very nascent market. Other focus
topics include first- and last-mile logistics, and infrastructure on major road routes (e.g.,
motorway service areas, charging and mobility hubs).

Decarbonizing transport is not solely about electrification. Other lower-carbon solutions

such as biofuels and biogas present accessible alternatives, especially in heavy-duty road
vehicles, while the outlook remains positive for sustainable aviation fuels and greener
marine fuels, which will require associated infrastructure, equipment, and services. Across
the board in Transport infrastructure, including traditional sub-sectors such as rail, buses,
and ferries, companies with a clear plan to decarbonize their fleets and operations are being
favored, especially if they can demonstrate first mover advantage or signals of being an
early winner, as seen in the Nordic ferry market (e.g., Norled, Fjord1) and bus market
(e.g. Umove).

EV charging

Notable investments in EV charge point operators and electrification solution providers

included Zenobē (KKR), Electrip (Wren House), WattEV (Apollo), Wattif (Marguerite), and
Elaway (SUSI). These assets span transit buses to passenger cars, rapid to slow charging
across public, depot and residential use cases, and both North America and Europe. Clearly,
investors are exploring different angles of a fast-growing opportunity in EV charging
provision.

Clean fuelling networks

While BEVs look increasingly certain to be the solution to Decarbonizing segments of the
commercial vehicle landscape, in areas such as long-haul heavy goods transport, liquid
fuels (biodiesel, biogas, hydrogen) provide a more pragmatic solution to some operators for
at least an interim period (if not permanently in particularly-difficult-to-electrify segments).
Networks for such fuels will require dedicated infrastructure (though with some overlap in
equipment and required capabilities with traditional fuel stations) and the fact that many of
the users of such networks will be vehicle fleet operators will give a degree of revenue
visibility through B2B contracts (be it direct or via fuel card companies) on top of upsides
from renewable transport fuel certificates.

24 Roland Berger | Infrastructure Investment Outlook 2024

 14 HGV decarbonization deep dive – survey results

Most appealing assets in HGV decarbonization (N=44) [ % of respondents]

Depot storage/charging
57 %
infrastructure

Fuel storage/transportation
41 %
infrastructure

(semi-) Public charging

36 %
network infrastructure

Fueling networks 30%

Fuel production facilities 20%

Fuel feedstock supply chains 18%

Key concerns regarding investing in HGV decarbonization (N=45) [ % of respondents]

Utilization risk 71 %

Technology risk 58 %

Pricing/margin pressure 42 %

Stranded asset risk 31 %

Source: Roland Berger Infrastructure Investment Outlook Survey 2024

25 Roland Berger | Infrastructure Investment Outlook 2024

 Zoom in: HGV decarbonization

As decarbonization of passenger cars takes its place

firmly within the scope for infrastructure investors,
many are starting to think about the “next big thing”
in transportation – these conversations often revolve
around HGV decarbonization.

There are over 6.5 million medium and heavy- EU HGV emissions
reduction targets
duty vehicles (commercial vehicles over 3.5t)
in circulation in the EU and UK – a substantial
number that is further amplified in terms of
emissions share by the fact that heavy-duty
vehicles tend to be heavily utilized and are
significantly more carbon-intensive than
smaller passenger cars (HGVs are 20x more
45 %by 2030
polluting than passenger cars on a per vehicle
basis). After accounting for these amplifying
factors – HGVs produce around a quarter of
all road transport CO2 emissions across the EU
and UK, making their decarbonization a crucial
step in reaching Europe’s overarching climate
goals. In recognition of this fact, governments
65 %
across Europe have introduced legislation
by 2035
to drive HGV decarbonization that often
mimics the legislation present for passenger
cars, albeit with a lag given the lower level of
technological maturity for zero-emission HGVs.
In the EU, a recently proposed policy update
90 %
by 2040
is likely to establish a target of reducing HGV
emissions by 45 % by 2030, 65 % by 2035 and 90 %
by 2040 (over 2019 levels).

26 Roland Berger | Infrastructure Investment Outlook 2024

 In the UK, as part of the Government’s Transport Decarbonization plan, the sale of HGVs
which emit carbon dioxide and other noxious gases at the tailpipe will be banned after
2040 (and after 2035 for vehicles smaller than or equal to 26t). Alongside policy targets and
sales restrictions, governments are introducing financial incentives for decarbonization in
the form of subsidies, investment commitments, and tax breaks – for example, the French
government is introducing a bonus that could cover up to ~20 % of the purchase or long-
term leasing cost of a zero emission HGV, with similar grants being introduced in the UK.

There are only a handful of ways through which the road freight transportation industry can
reach these targets, with battery electric and fuel cell being the only solutions that effectively
reduce local air pollution. Biofuels offer an attractive alternative to truck operators but are
likely to suffer from significant competition for feedstocks with other biomass applications,
and Power-to-Liquid fuels are likely to continue to be cost prohibitive for road transportation.
At the same time, major HGV OEMs are investing R&D capital into zero emission (battery
electric and hydrogen fuel cell) truck development, and many are announcing ambitions to
transition their offering to a fully zero emission one by 2035, suggesting both battery electric
and hydrogen FC trucks are likely to take a significant share of the market in the long term,
with biofuels playing a bridging technology role in the shorter term.

This creates significant opportunities for infrastructure investments, in both electric

charging for HGVs and hydrogen infrastructure, with early projections suggesting that over
250,000 depot and on road electric charging points for HGVs will need to be rolled out as
soon as by 2030, alongside upwards of ~2,000 hydrogen refuelling stations. Investors clearly
realize the magnitude of the opportunity, with 57 % of the survey respondents identifying EV
charging for commercial fleets as one of the most attractive asset classes in transportation.
Within HGV infrastructure specifically, depot and fuel storage / transportation infrastructure
are the most popular, with (semi-) public infrastructure following closely. Concerns, such as
technological uncertainty (e.g., need for 600 kW+ high-power charging to charge trucks
during driver rest breaks) and future utilization risk are likely to dampen the appetite of
investors in the immediate future, however as technology matures and innovative financing
models (e.g., Zenobe Battery on the eBus, electric transport as a service) take shape to
reflect the additional capex and technological risks faced by fleet operators, we will
undoubtedly see infrastructure investors come into the market.

27 Roland Berger | Infrastructure Investment Outlook 2024

 3.4 Digital infrastructure

For the five years preceding 2023, we witnessed phenomenal growth in Digital infrastructure
investment. Both in terms of deal count and value, Digital infrastructure consistently grew its
share of the total infrastructure investment space.

Over this period, traditional private equity was crowded out by infrastructure funds as IRRs
fell to single digits and the penchant for minority deals grew.

The three core digital asset classes – towers, data centers, and fibre – all tend to exhibit
traditional infrastructure characteristics of essential services to the economy, high capex
and barriers to entry, limited competition within a geographic catchment, sticky customers,
and/or long-term contracts. One key driver of historical M&A activity has been the
de-verticalization of traditional telcos – carving out towers, disposing of data centers, and
formalization of netco/servco models with new infrastructure financing for the netco. These
types of deals have largely dried out over the past 18 months as interest rates rose.

The slowdown in growth that started in 2022 worsened in 2023 as deal count declined by 30 %
and average deal size almost halved y-o-y.

Apart from refinancing, there was very little deal activity in 2023 in the fibre sub-sector for
two main reasons: (i) there is increasing evidence that fibre/broadband prices have not kept
pace with inflation, and (ii) there are concerns in several key geographies regarding “over-
build” risk along with lower-than-expected take-up related to local fibre specifically.

Likewise, tower deals in 2023 were largely skewed to minority towerco deals rather than new
asset deals.

Therefore, although global deal volumes were down y-o-y, they continued to increase in
Europe, with data centers still representing a focus for many infrastructure investors in 2023.
With global data consumption growth not abating and customer contracts which are largely
immune to inflation, many investors continue to see this sub-sector as relatively attractive.
There are two further factors which are driving investment interest in data centers: (i) edge
computing is becoming more of a reality; and (ii) the hype that is Gen-AI is driving real
incremental growth in data consumption and, along with this, investment requirements in
underlying associated infrastructure.

Demand for high performance computing associated with AI/ML requires more power-
intensive GPUs, such as those of Nvidia. Estimates suggest that an extra 2,000 to 2,500 MW
of IT load could be needed to meet the demand for AI workloads based on Nvidia's forecast
to ship up to 2.5 million H100 / H200 chips in 2024 (up from c.500k in 2023).

28 Roland Berger | Infrastructure Investment Outlook 2024

 15 Digital infrastructure – survey results

Relative focus by asset type – 2024 vs. 2023 [ % of respondents]

60

50

40

30

20

10

0
Core Core+ Value add
N = 43 N = 43 N = 43

Decrease significantly Decrease slightly No change Increase slightly Increase significantly

Most attractive assets within digital infrastructure (N = 36) [ % of respondents]

Edge computing/data centers 83 %

Dark fibre/capacity 42 %

Cell towers 39 %

Local access fibre 28 %

Other smart/edge infrastructure

17 %
(buildings, billboards, EV charging, poles, etc.)

ML/AI-as-a-service 6%

Small cells 6%

Edge computing continues to be viewed

as the most attractive sector, with
investors expecting increases in data
consumption and public cloud demand

Source: Roland Berger Infrastructure Investment Outlook Survey 2024

According to our survey, Digital infrastructure investors are among the most optimistic in
terms of deal activity for 2024. A majority of investors are expecting a tale of two halves –
with caution still prevailing in H’1 but activity picking up in H’2 on the back of anticipated
interest rate reductions (albeit modest) and associated debt financing costs.

For the above stated reasons, data centers and edge computing are expected to remain the
dominant focus for investors in 2024.

29 Roland Berger | Infrastructure Investment Outlook 2024

 3.5 Social infrastructure

Traditional social infrastructure assets have fallen out of favor with investors. Recent deal
flow is below historical levels, in both value and volume terms (noting that historical data
often includes separate portfolio assets (e.g., hospitals in a chain) as multiple transactions,
driving high deal count in 2016/17). The decline over 2022-23 was the sharpest across the
asset classes we cover. Furthermore, the outlook is still less positive than that for the other
sectors, with more than 60 % of survey respondents expecting deal count to remain stable or
decline through 2024 y-o-y. Sentiment is marginally worse in education than healthcare,
with 73 % of survey respondents expecting a stagnation or slowdown in education deals, vs.
63 % in healthcare.

Our survey highlights a number of Core+ and Value-add strategies catching the eyes of
investors. In healthcare, diagnostics labs, healthcare equipment leasing services, and care
homes are seen as the most attractive asset classes, and early education/nursery assets
standing out in education. While in healthcare this is in line with our findings from our 2023
report, in the education sector the focus has shifted away from primary and secondary
schools and focused more strongly on early education/nursery assets.

16 Social infrastructure – survey results

Relative focus by asset type – 2024 vs. 2023 [ % of respondents]

70

60

50

40

30

20

10

0
Core Core+ Value add
N = 26 N = 25 N = 25

Decrease significantly Decrease slightly No change Increase slightly Increase significantly

Source: Roland Berger Infrastructure Investment Outlook Survey 2024

30 Roland Berger | Infrastructure Investment Outlook 2024

 Most attractive assets within healthcare infrastructure (N=28) [ % of respondents]

Diagnostics labs 50 %

Healthcare equipment leasing and services 46 %

Care homes 32 %

Private clinics (excluding dental) 21 %

Pharmacy chains 18 %

Special (healthcare) education needs 14 %

Veterinary chains/clinics 11%

Ophthalmology clinics 11 %

Mental health chains 4%

Dental clinics 4%

Most attractive assets within education infrastructure (N=23) [ % of respondents]

Early education/nurseries 39 %

Universities 30 %

Vocational training and retraining 22 %

Primary and secondary schools 22 %

Source: Roland Berger Infrastructure Investment Outlook Survey 2024

31 Roland Berger | Infrastructure Investment Outlook 2024

 Zoom in: Healthcare

As many Western economies slow down or even

enter recession, segments with high resilience may
increase in priority for investors. Healthcare is one
such sector where spending is typically ringfenced
during downturns.

Fu r th e rm o re, COVI D -19 d e m o n s trated th e l o n g -te rm i m p l icatio n s of c h ro n ic

underinvestment in healthcare systems, meaning spending is likely to be further protected.
Overall, this could provide a positive area for investor interest, with certain pockets poised to
benefit from these macro-trends.

Diagnostic labs are emerging in importance was many European hospitals have insufficient
imaging capabilities to support the medical needs of patients and the requirements of
doctors. As an asset class diagnostic labs have a good fit with infrastructure fund portfolios,
given the essential role that outsourced labs are increasingly taking in healthcare systems,
and strong long-term outlook given the increasing prevalence of chronic diseases and
increasing emphasis on preventative medicine.

The diagnostic lab market is highly fragmented. Many investors are seeing opportunities for
buy and build to accelerate growth at either a national or regional level. Recent acquisitions
of Excellence Imagerie by Antin Infrastructure Partners and Alliance Medical by Icon
Infrastructure are cases in point.

Healthcare equipment leasing and services are a growing offering, as primary care facilities
look to defray capital expenditures during times of significant budget pressure. This business
model has been seen across all capital equipment, with imaging equipment, orthopaedics/
prosthetics, and endoscopy apparatus as the most common topics. The model is a good fit
for infrastructure funds given the high cashflow security and visibility from inflation-linked
long-term contracts, and limited exposure to clinical risk (given separation of the operator
and lessor).

Care homes are often seen as a way of accessing the megatrends of an aging population
with increasing prevalence of chronic diseases, with >30 % of respondents identifying them
among the most attractive assets. However, the sector is still recovering from a string of
crises, most notably COVID-19 (reducing occupancy and leading to operational challenges)
and rising interest rates leading to a challenging funding environment. This has seen appetite
reduce significantly, with the acquisition of Orpea by a consortium led by CDC the only major
transaction in 2023.

Private clinics and specialized clinics (particularly mental health and dental clinics) are once
again seen as less interesting to infrastructure funds in 2024, as their relatively high levels of
clinical risk lead to lower cashflow security vs. other healthcare assets.

32 Roland Berger | Infrastructure Investment Outlook 2024

 3.6 Hybrid infrastructure

Definition: new assets that do not belong to one of the

traditional infrastructure sectors, but where the business
model or underlying sector exposure qualifies them as
meeting many of the infrastructure asset test criteria.

Every year, new asset types are brought into the fold by infrastructure investors, broadening
the definition of the infrastructure universe. Most of these assets do not meet the full range
of traditional infrastructure test criteria, necessitating trade-offs for investment committees
to get comfortable with the infrastructure investment thesis. De-risking the business during
the holding period is of critical importance for value creation and exit positioning.

With such infra-like hybrid assets, investors must get comfortable with shorter contracts
(typically 1-3 years), the relatively asset-light business model and a lack of explicit downside
protection. Typically, investors gain conviction through the recurring nature of the use case
(examples include HVAC equipment rental businesses such as Coolworld), the business’s
strong customer relationships characterized by low churn (examples include modular unit
leasing players such as Portakabin), and the mission critical nature of the solution by
combining the asset base with a strong service wrapper (examples include commercial
vehicle rental/leasing solution providers such as Fraikin and Petit Forrestier).

17 Hybrid infrastructure – survey results

Relative focus by asset type – 2024 vs. 2023 [ % of respondents]

55
50
45
40
35
30
25 No
Core
20 Assets
15
10
5
0
Core Core+ Value add
N = 30 N = 30

Decrease significantly Decrease slightly No change Increase slightly Increase significantly

Source: Roland Berger Infrastructure Investment Outlook Survey 2024

33 Roland Berger | Infrastructure Investment Outlook 2024

 17 Hybrid infrastructure – survey results (continued)

Most attractive assets within hybrid infrastructure (N=34) [ % of respondents]

Rental of specialist equipment (e.g. access platform) 64 %

Equipment as a service (e.g. critical commercial

50 %
equipment such as laundry and catering equipment)

Modular construction unit leasing/rental 39 %

Closed loop logistics 31 %

Fire safety solutions 28 %

Holiday parks/outdoor accommodation parks 11 %

Source: Roland Berger Infrastructure Investment Outlook Survey 2024

Our survey highlights that this is a segment that is continuing to receive increasing interest,
with 70 % of respondents expecting the deal count to increase in 2024. With specialist
equipment rental, equipment-as-a-service and modular unit leasing/rental topping the list
of most attractive asset types.

34 Roland Berger | Infrastructure Investment Outlook 2024

AUTHORS

Siongkoon Lim Arindam Das

Partner Principal
+44 7967 674859 +44 7967 674836
siongkoon.lim@rolandberger.com arindam.das@rolandberger.com

Hrishikesh Potey Martin Weissbart

Partner Principal
+44 7880 202037 +49 1607 448420
hrishikesh.potey@rolandberger.com martin.weissbart@rolandberger.com

Tim Longstaff Chris Stern

Partner Project Manager
+44 7880 202910 +44 7788 390074
tim.longstaff@rolandberger.com christopher.stern@rolandberger.com

Michael Knott Aaron Chugger

Partner Project Manager
+44 7733 804952 +44 7967 674829
michael.knott@rolandberger.com aaron.chugger@rolandberger.com

Adam Healy Lev Blinov

Principal Senior Consultant
+44 7880 203099 +44 7384 213402
adam.healy@rolandberger.com lev.blinov@rolandberger.com

05.2024
ROLANDBERGER.COM

This publication has been prepared for general guidance only. The reader should not act according to any
information provided in this publication without receiving specific professional advice. Roland Berger GmbH
shall not be liable for any damages resulting from any use of the information contained in the publication.

© 2024 ROLAND BERGER GMBH. ALL RIGHTS RESERVED.

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