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The sustainable infrastructure investment report

Potholes on the road to sustainable infrastructure 

Exploring the trends, participants and data powering a sustainable infrastructure boom.

In this report, we will highlight some of the major trends driving the current sustainable infrastructure investment marketplace, along with key data that will help refine the list of key players, flag the most important metrics to monitor and highlight the challenges looming for both investors and government sponsors.

Key facts at a glance

  • A record US$627 billion in sustainable infrastructure projects in the renewable energy and nuclear sectors were announced globally in 2021, up from US$275 billion in 2020. A total of 1,521 renewable and nuclear infrastructure projects were announced, up from 1,365 in 2020 and more than 3.5 times the total number of projects launched a decade ago.
  • Solar projects are leading the way with a total of 863 new projects announced in 2021, followed by wind, which saw 442 new initiatives launched last year.
  • Despite steady growth in investment, many big projects have been side-lined by a crippling combination of pandemic-related project delays, supply chain issues, geopolitical tensions and inflationary pressures. Of the 1,232 solar and wind projects announced in 2020, just 47 (3.8%) have been completed.



Where are all the wind turbines? Or, for that matter, the solar farms, the hydropower plants and the electric public transportation fleets? These should be the golden days of sustainable infrastructure. Between the Biden administration’s big budget plan to rebuild the US while shifting to cleaner energy sources, the EU’s Green Deal, with its ambitious goal of growth decoupled from resource use, and a global mandate toward sustainable investing, we might have expected to see more visible evidence of the transformation everyone’s been talking about for the last several years.

The fact is, sustainable infrastructure projects are alive and well – and growing globally – but the groundswell of enthusiasm that accompanied bold proclamations at the UN’s COP26 Climate Change Conference and rampant speculation among investors has met some headwinds. Among these is an increasingly fraught geopolitical environment that may create future access challenges for critical natural resources, countless project delays and budget overruns caused by the pandemic, supply chain issues and a volatile economic environment.

As we foreshadowed a year ago in our inaugural Sustainable Infrastructure Investing Report, the pace and scale of the changes taking place creates big opportunities and significant risk – both of which now rear their heads as sustainable infrastructure enters the awkward adolescence of its evolutionary growth.

Image with cross-section of a road on bridge with water on the left side, while the nature with greenery  on the right of it.

Chapter one

Not all infrastructure is created equal

The conversation typically starts with potholes. Crumbling city streets, decaying bridges and tunnels and overrun airports and train stations – these are the infrastructure projects that draw us into the conversation because we experience them every day. From these it’s not a far leap to carbon-belching, coal-fired powerplants, which generate 2.23 pounds of CO2 per kilowatt hour of electricity, and bus fleets and heavy trucking, which make up roughly a quarter of all transportation-related greenhouse gasses.

Invariably, even the most casual observer must conclude that infrastructure and sustainability are inextricably linked. While not all infrastructure projects today are sustainable – as evidenced by all the potholes and smokestacks that remain – changing the status quo by focusing on sustainability has become a primary objective of nearly every major economy in the world. Whether through commitments to the UN’s Sustainable Development Goals and the Paris Agreement, bold legislation like the Bipartisan Infrastructure Law and the European Green Deal or any number of regional and municipal clean-air, energy-saving and environmental design initiatives, the vast majority of today’s infrastructure investments have a heavy focus on sustainability.

Governments around the globe are putting environmental, social and governance (ESG) issues at the top of their administrative agendas and their focus is clearly trained on climate and carbon emissions,

“That means everything from requiring companies to report the total emissions associated with their global supply chains to enforcing efficiency standards for new building projects to regulating CO2 emissions from powerplants is on the table.”

Accordingly, businesses, investors and lawmakers have taken note, getting much more serious about tracking sustainability by the numbers, evaluating the long-term viability of new initiatives on both their potential to generate profit and their ability to do so sustainably. When it comes to large-scale infrastructure, the success or failure of these projects will ultimately come down to their ability to improve our day-to-day lives while also proving that they are delivering on long-term sustainability goals.

For that reason, data is becoming a key ingredient in the ecosystem of global sustainable infrastructure projects. By continually tracking investment trends, identifying the major players, highlighting the core technologies and measuring variations year-over-year, we aim to deliver the ground truth on sustainable infrastructure investment. That includes identifying and categorising projects that meet the criteria for sustainability in their implementation and scope and those that are financed sustainably – built on project finance sources that take ESG factors into account when allocating funds.

Image of solar panels sliding towards the left side with the clouds captured above,

Chapter two

By-the-numbers sustainable infrastructure 

Looking into those numbers, we find a record US$627 billion in sustainable infrastructure projects were announced in the renewable energy and nuclear sectors across wind, solar, nuclear, clean waste and several other categories in 2021, according to Refinitiv data. That total includes 1,521 individual projects throughout the Americas, Asia-Pacific region, Europe and Japan, which is more than 3.5 times the total number of sustainable infrastructure projects launched a decade earlier and more than four times the total dollar value.

Of those 1,521 total renewable energy and nuclear infrastructure projects, 194 were sustainably financed, meaning that the funding for the project came from social bonds, sustainably linked bonds, green bonds and/or funding sources where a proportion of investment proceeds are being used for sustainable outcomes. The total dollar value of these sustainably financed infrastructure deals was US$59.5 billion in 2021.

In terms of the types of projects being financed, solar has emerged as the clear leader, with 863 projects announced in 2021. Wind projects – which was the lead category in last year’s Sustainable Infrastructure Investing Report – followed with 442 new initiatives announced last year. Both categories saw record high new project announcement volume in 2021, with solar projects growing at a rate of 6.5x versus 2011 totals.

That rapid growth in solar just got another boost in the form of a June announcement from the Biden administration that the US would implement a 24-month tariff exemption for solar panel products from several Southeast Asian nations. The US has also invoked the use of the Defense Production Act to promote domestic production of solar panels. Both efforts were implemented specifically to address widespread project delays caused by supply chain issues.

Image with the windmills placed at unique distance from one another with background having the clouds and green mountains.

Chapter three

Clouds on the horizon

While the total number of announced projects suggest that 2021 was a banner year for new solar and wind projects, certain setbacks have kept many announced projects from getting under way as quickly as the stakeholders involved would like. Between pandemic-related worker shortages and construction delays, rising geopolitical tensions, supply chain slowdowns and growing macroeconomic uncertainty, hundreds of projects have been side-lined.

Among the 1,232 total solar and wind projects announced in 2020, for example, just 47 (3.8%) were completed. Likewise, among the 1,069 solar and wind projects announced in 2019, just 89 (8.3%) have been completed.

One high-profile example of these challenges at play can be found in the experience of Siemens Gamesa, the world’s largest wind turbine manufacturer, which reported a 20.3% decline in Q1 2022 revenues largely due to ramp-up challenges caused by supply chain interruptions. Eventually, the string of delays and consistent missed opportunities cut the market value of the offshore wind giant by half and led to the untimely exit of its chief executive.

“Many big projects have gone horribly wrong,” said Rod Morrison, Editor of Project Finance International. “On the one hand, it’s all very rosy. The M&A space has been roaring ahead and there have been lots of new projects announced. But on the other, we’re seeing countless examples where projects are delayed midstream due to COVID and supply chain issues. Add the fact that the price of materials is shooting up, along with massive increases in oil and gas prices and the realities of the current situation get considerably more ominous.”

Morrison added that oil and gas prices have doubly complicated matters because: “Big project developers hedged out their price risk, which turned out to be exactly the wrong thing to do given how high prices are now.”

This refers to the fact that many energy projects are backed by long-term contracts with buyers or shorter-term hedges to guarantee prices which were put in place when energy prices were lower. Therefore, right now, those with these hedges will not benefit from the higher prices. Of course, when prices are low, the projects are protected.

“At the centre of the issue is the Russia-Ukraine war, which has put a global spotlight on the security of existing energy supply and raised countless questions about the long-term viability of alternative fuel strategies that require large amounts of nickel, cobalt, copper and other natural resources that are heavily sourced from Russia.”

Ukraine’s rich mineral wealth – particularly its largely untapped lithium deposits – has been highlighted as a possible driver of Russia’s invasion.

Sustainably accessing and harvesting these metals and minerals against a backdrop of global geopolitical unrest is a real blind spot in the transition to clean energy, according to Alessandro Sanos, Global Director of Sales Strategy for Commodities at Refinitiv, an LSEG business.

“We will not successfully transition to renewables and electrify the economy if we do not solve the metals and minerals challenge,” he explained. “Simply put, we do not have enough supply of metals and minerals to meet the insatiable and growing demand needed to achieve the transition targets specified by the Paris Agreement and COP26.”

Sanos added that exploring, developing and delivering new mines takes several decades and that Increasingly stringent environmental policies on mining will invariably bump up against emissions reduction goals.

Another significant challenge is the declining quality of ore grades. Metals and minerals are non-renewable resources and there are fewer high-quality ore deposits left to develop. According to the World Economic Forum, the average cost of producing copper has risen by over 300% in recent years, while its grade has dropped by 30%.

The graphics on the image show three outlined capital letters representing acronym for energy NRG outlined with surrounding data elements

Chapter four

Building bridges

Challenges around fossil fuel costs have generated ripple effects far beyond the world of project finance.

“The current geopolitical situation has really complicated the landscape for sustainable infrastructure investment,” said Darrenth Hawken, Director of Global Infrastructure and Sustainable Finance at Refinitiv, an LSEG business. “Most countries recognise that they cannot construct enough renewable power fast enough to make up for the shortfall in existing energy supply. The UK, for example, which has been a leader in the transition to wind power, generated just 20% of its total energy from wind last year. Between supply chain challenges, project delays and growing fears around energy security, we’re actually seeing a resurgence in oil and natural gas-related projects.”

To put the situation in context, consider the example of the Nord Stream 2 Baltic Sea natural gas pipeline project, a mammoth US$11 billion initiative meant to double the flow of Russian gas directly to Germany. The project, which was initiated to ease the pressure on European consumers facing record energy prices following the pandemic, was halted by the German government in February of 2022 following Russia’s invasion of Ukraine.

The example is noteworthy because it exposes how heavily the world still relies on fossil fuels and the dramatic effect geopolitical events can have on the supply of those resources. As a result, countries are scrambling to find new ways to mitigate immediate-term supply shortages while also buttressing themselves against future supply risks for both fossil fuels and the raw materials needed to enable the clean energy transition.

Project Finance International’s Morrison explained that the complicated turn of events has spurred a surge in project finance activity in liquid natural gas as a sort of bridge fuel to support the transition to more sustainable energy production. He noted that hydrogen has also come into the spotlight as a largely untested but potentially growing area of investment. Pointing to Saudi Arabia’s $US7 billion ACWA hydrogen powerplant financing project as an example, he said: “The Russian invasion means everyone else in the world is on the lookout for alternative sources of energy, which will benefit oil and gas in the short term and redraw the map of the supply chain for the source materials used in renewable energy initiatives.”

According to Refinitiv data, 36 new liquid natural gas infrastructure projects and 120 new hydrogen projects were announced last year.
Image of Tokyo city landscape of buildings.

Chapter five

Show me the money

The landscape of funding sources for sustainable infrastructure projects has also become as volatile as the projects themselves. As we reported last year, the lion’s share of investment into these projects is still coming from the major global commercial banks. All told, the top 10 commercial banks poured over $US35 billion into sustainable infrastructure projects last year – up from $US29 billion in 2020 – according to Refinitiv data.

Japan’s Sumitomo Mitsui Banking Corporation and Mitsubishi UFG Financial Group took the top two slots for total deal financing volume in 2021. They were followed by Mizuho Financial Group, Santander and Credit Agricole.

The world’s biggest banks are hardly alone in their economic interest in sustainable infrastructure. As benchmarks like the US green economy, which comprises companies with green products and services, and the FTSE Environmental Opportunities Index, which includes companies that derive at least 20% of their revenues from environmental products and services, continue to outperform non-ESG peer group investments, the world’s asset managers and investors have taken note. Likewise, global issuance of sustainability bonds, which finance the general functioning of an issuer that has explicit sustainability targets linked to the financing conditions of the bond, hit a record level in 2021.

Claire Dorrian, Head of Sustainable Finance, Capital Markets at the London Stock Exchange Group explained that investor interest in the space has grown so rapidly that it is fundamentally changing the underlying market structure in global capital markets.

“The green economy all by itself is the fifth largest industry in the world right now,” Dorrian explained. “Accordingly, we’ve seen widespread growth in new funds focused on everything from renewable energy to digital infrastructure assets.”

Dorrian pointed to the 33 listed green funds in London alone, with a combined market cap of over £30bn covering investment across social, renewable energy, energy efficiency and digital infrastructure assets. On top of that, she flagged the 22 renewable energy infrastructure funds which have a total market cap of £15bn – and the sector is trading at a premium of 12.1% to net asset value.

Those numbers help explain the London Stock Exchange Group’s plans to develop a voluntary carbon market that will eventually allow a market-based approach for investment in activities that reduce and remove global carbon emissions.

“We see an opportunity to bring activities that have been happening in the over-the-counter markets into the public arena,” Dorrian explained. 

With the right data and sustained investor interest in this space, we believe we can create a market structure that supports the listing of carbon funds that are investing in global climate mitigation projects.
Undersea water bubbles with circular graphics on top of the image. The bubbles metaphorically represent data

Chapter six

DATA: A precious commodity in a volatile world

While interest in sustainability clearly is at an all-time high among a diverse and growing set of stakeholders, we are still in the early days of the green infrastructure revolution. The specific technologies, raw materials, funding sources and regional powers that ultimately will lead the transition are anything but certain. Likewise, the geopolitical and macroeconomic environments that will ultimately bring sustainable infrastructure to bear are more volatile than any we’ve seen for the past several decades.

That powder keg of opportunity and risk will create countless ways for investors, innovators, businesses and regulators to win and lose big, based on their ability to accurately separate a good deal from a bad one. That puts the focus squarely on data as perhaps the most precious commodity of all in the sustainable infrastructure movement.

With breakthrough new developments being launched every day and sentiment shifting on a dime based on a complex mix of market news, technology and politics, the ability to accurately chart trendlines, read the market and anticipate everything from supply chain issues to labour shortages will come down to a mastery of deep data, expert insights and powerful analytics.

There inevitably will be potholes that no one’s seen coming on the road to the sustainable infrastructure future. One need look no further than the ongoing knock-on effects of the COVID-19 pandemic for ample evidence of that. But there will also be once-in-a-generation opportunities to tap into the next big thing and shape the future of humanity along the way. Those opportunities are simply too big to miss for the legions of speculators jumping head-first into the space. The key to their survival will be heeding the right signals at the right time.

Refinitiv Infrastructure 360

Refinitiv has the most comprehensive set of news, data, insights, and analytics available on global infrastructure developments from rumour to close, including deal structuring, financing, risk profiling, regulatory compliance and lender, investor, and advisor profiles.

The Infrastructure 360 app (GINFR) in LSEG Workspace combines more than 45 years of leading content from Project Finance International (PFI), Refinitiv® Lipper®, Refinitiv® Deals Intelligence, Refinitiv® DataStream, Loans, Reuters News and ESG. 

Refinitiv commodities insights

In today's world, commodities markets and the infrastructure landscape are increasingly inter-connected. Movements in raw materials affect the pace and cost of infrastructure projects, and vice versa. As an example, vast amounts of metals and minerals are needed to build wind farms and transmit power. Any increase in commodity prices will lead to higher construction costs for infrastructure facilities. In project planning and financing, it is therefore critical to consider factors affecting commodity supply, flows, and costs. To anticipate opportunities and challenges in infrastructure, investors need to monitor commodities movements. Refinitiv has the most comprehensive set of unique data, analytics, expert insights, and exclusive market-moving news across global commodities markets. Optimise your analysis and make more informed investment decisions with access to Refinitiv Commodities insights.