Investors are waking up to a new landscape of opportunities in infrastructure, with sustainable aviation fuel, renewable natural gas, artificial intelligence, data centres, and the broader energy transition leading the charge. IFM Investors, a heavyweight in the infrastructure management sphere, has released a compelling report, Infrastructure Horizons 2025, outlining these shifts. The report doesn’t just highlight emerging trends; it signals an evolution in how investors approach infrastructure, hinting at a future where technology and sustainability intertwine.
The AI revolution is poised to reshape infrastructure profoundly. Data centres, electricity networks, and fibre networks are set to flourish, with AI driving operational efficiencies across infrastructure assets. This isn’t just about new investment opportunities; it’s about reinventing existing assets, embedding intelligence to enhance value. However, investors must grapple with AI’s challenges, namely cybersecurity risks and the potential spread of misinformation. The sector will need to be proactive in mitigating these threats to fully harness AI’s benefits.
Sustainable aviation fuel (SAF) is shaping up as the primary route to decarbonise aviation in the medium term. By 2050, SAF could constitute 80-90% of aviation fuel, signalling a sea change in how we power flight. Unlike other decarbonisation pathways, SAF is a ‘drop-in’ fuel, ready to blend with existing jet fuel, minimising adjustments to engines and infrastructure. This shift opens substantial opportunities for investors, with countries like Australia, rich in requisite resources, potentially becoming global SAF powerhouses.
Renewable natural gas (RNG) is another area primed for growth. As industries seek to lower emissions and improve waste management, the voluntary market for RNG is booming. Higher RNG pricing and the development of more costly RNG sources are expected to propel the industry forward, creating a raft of new opportunities for investors.
Data centre operators are adopting innovative strategies, ‘following the power’ to build new centres on existing renewable energy sites. This convergence of renewable power generation, energy storage, and digital infrastructure is not just an answer to surging power demand; it’s a step towards the net zero objectives of data centre operators. Corporates are crafting bespoke solutions, co-locating renewable energy sources with data centres to bolster power security and competitive edge.
Governments, too, are playing a pivotal role, focusing on energy independence and advanced manufacturing. Deglobalisation is becoming a significant driver of infrastructure debt opportunities, as nations look to reshore vital industries and foster economic self-sufficiency.
The maturation of infrastructure as an asset class demands fresh, innovative thinking from asset allocators. No longer are investors confined to traditional asset classes; opportunities are emerging at their intersection, driven by the energy transition and digitalisation. As the speed of technological development accelerates, so too will the investment universe in infrastructure technology.
IFM’s report hints at a future where infrastructure investing isn’t just about building roads and bridges; it’s about powering the digital economy, decarbonising aviation, and creating circular economies. Savvy investors will be those who embrace this evolution, capitalising on the nexus of technology and critical infrastructure.
The stage is set for a transformative era in infrastructure investing. The question is, which investors will lead the charge, and which will be left behind?
