World’s Best Investment Banks 2024—Infrastructure

Financing Infrastructure Projects: Best Investment Banks in 2024

Financing infrastructure projects became a key area of expertise for deal-makers who were able to create innovative capital market solutions.

Infrastructure finance has seldom been as pivotal to the well-functioning global economy as in recent years. Between efforts to reestablish essential commodity pipelines amid the war in Ukraine; the timely reconstruction efforts of Turkey and Morocco after 2023’s disastrous earthquakes; and the continuous technology investment in the US, the Middle East, and China, future economic growth has become ever-more dependent on such initiatives.

However, while governments and multilateral institutions continued to prioritize infrastructure, private deal-making felt the blow delivered by higher interest rates and did not quite keep up.

According to Preqin, infrastructure funds raised $87.75 billion last year, a dismal 50.2% lower, year over year, from the $176.1 billion recorded in 2022. Deal value also declined 26.6% last year, totaling $308.5 billion in 2023, down from $420.4 billion the year before.

Our winners are the ones who were best able to pull through the challenging conditions to keep the economy moving forward despite adversities.

Global | Banco BTG Pactual

Infrastructure modernization is a crucial priority; and Banco BTG Pactual (BTG) is leading many such initiatives regionally and globally as one of the largest investment banks in Latin America, with a footprint in North America and Europe.

Among the firm’s accomplishments in 2023 were acting as lead bookrunner for Electrobras, or Centrais Elétricas Brasileiras SA — a company that boasts an installed capacity of 43 gigawatts with 97% of it being clean energy. The offering was one of the largest ever priced in Brazilian fixed income capital markets and the biggest transaction ever issued by Electrobras. 

With its specialized team providing financial advisory, issuance coordination, and specific financing structures for energy and infrastructure projects, the bank has differentiated itself by leading high-profile domestic and cross-border financing deals across various aspects of infrastructure, including electric power generation and transmission, renewable energy, water sanitation and waste management services. 

Africa | Rand Merchant Bank

For a long time, African governments had been left to shoulder the burdens of infrastructure financing. The situation is changing with increasing private sector participation across areas like renewable energy, railways, and ports. Rand Merchant Bank is buoyant, and the trend will continue.

Infrastructure finance has become Rand Merchant’s forte. The bank has been involved in numerous projects supporting economic growth by deploying a model balancing risk and return and prioritizing impacts. The bank acted as the lead arranger of syndicated facilities that mobilized $2.4 billion for Tanzania to finance a major railway project to boost regional trade and economies significantly. Rand Merchant has also arranged financing deals to enable South African renewable energy company African Clean Energy Developments to eventually deliver 520 MW of wind energy.

Asia-Pacific | Asian Infrastructure Investment Bank

This year’s regional winner for infrastructure finance, Asian Infrastructure Investment Bank (AIIB), kicked off 2024 with a record-breaking $3 billion funding of a five-year sustainable-development bond. The financing effort is part of the Beijing-based bank’s “Infrastructure for Tomorrow” campaign—prioritizing green projects with sustainability at the core. AIIB lived up to that motto throughout 2023 when it approved a proposal to issue $1 billion in credit guarantees against sovereign-backed loans made by the World Bank’s lending arm. AIIB is also helming a $571 million project to improve 4,350 miles of roads across 11 regions in the northern Côte d’Ivoire and to maintain a further 9,321 miles of rural roads there. The AIIB is advancing $200 million, the World Bank $300 million, and the rest will come from the Ivorian government. The AIIB is a young company, having begun operations in January 2016. Since then, it has grown to have 109 members worldwide and capitalized at $100 billion.

Central & Eastern Europe | Akbank

Our Best Investment Bank for Infrastructure Finance in Central and Eastern Europe, Akbank, takes home its award for relentless humanitarian efforts in reconstructing several Turkish cities after the devastating earthquake that shook the country in 2023. In partnership with the European Bank for Reconstruction and Development (EBRD), as part of its Türkiye-Disaster Response Framework, Akbank channeled as much as $90 million into various sectors of the economy. The allocated funds were intended to support the impacted communities in revitalizing small and midsize enterprises while broadening access to financial prospects. The project was essential to the reconstruction efforts within numerous regions of the country affected by the quake.

Latin America | Bradesco BBI

In Latin America, Bradesco BBI is leveraging one of the largest investment banking teams in the region to deliver comprehensive financing and merger expertise in the infrastructure sector. The bank has executed numerous mandates on projects across various industries, including water and sanitation, power and energy, renewables, transportation, logistics, and highways and toll roads. Expanding global shipping networks is essential in order for companies in Latin America to continue to grow through international trade. Bradesco is a key participant with the region’s exporters and importers as the leader in port terminal transactions. This factor has been critical to Latin America’s post-pandemic recovery. As the definition of infrastructure assets evolves to include a broader range of sectors, Bradesco is poised to respond quickly to new opportunities, given its deep industry coverage of over 200 companies in Latin America, including over 90% of companies in the MSCI Brazil Index.

Middle East | Standard Chartered

Operating across nine markets in the Middle East, Standard Chartered (StanChart) is firmly entrenched; and its long-standing presence in the region continues to expand, given its strong capabilities in leading high-profile infrastructure transactions. Infrastructure finance increasingly overlaps with many industries, including oil and gas, clean energy, and technology; and StanChart has differentiated itself through its deep expertise in various sectors and its robust execution capabilities involving both conventional and Shariah-compliant financings. By leading complex transactions involving critical sectors like ports, logistics hubs, industrial and business parks, water treatment, renewables, and power generation, StanChart has established itself

SDGs, Targets, and Indicators

1. SDG 9: Industry, Innovation, and Infrastructure

   • Target 9.1: Develop quality, reliable, sustainable, and resilient infrastructure
   • Target 9.4: Upgrade infrastructure and retrofit industries to make them sustainable

2. SDG 7: Affordable and Clean Energy

   • Target 7.2: Increase the share of renewable energy in the global energy mix

3. SDG 6: Clean Water and Sanitation

   • Target 6.1: Achieve universal and equitable access to safe and affordable drinking water
   • Target 6.2: Achieve access to adequate and equitable sanitation and hygiene for all

4. SDG 11: Sustainable Cities and Communities

   • Target 11.2: Provide access to safe, affordable, accessible, and sustainable transport systems
   • Target 11.5: Reduce the adverse per capita environmental impact of cities

Analysis:

1. SDG 9: Industry, Innovation, and Infrastructure

   The article discusses the importance of infrastructure finance in supporting global economic growth. This aligns with SDG 9, which aims to develop quality, reliable, sustainable, and resilient infrastructure. The article highlights the role of investment banks in leading high-profile financing deals for infrastructure projects.

2. SDG 7: Affordable and Clean Energy

   The article mentions Banco BTG Pactual’s involvement in financing Electrobras, a company with a significant capacity of clean energy generation. This relates to SDG 7, which focuses on increasing the share of renewable energy in the global energy mix.

3. SDG 6: Clean Water and Sanitation

   The article mentions Rand Merchant Bank’s involvement in financing a major railway project in Tanzania, which aims to boost regional trade and economies. This indirectly contributes to SDG 6, which aims to achieve access to adequate and equitable sanitation and hygiene for all.

4. SDG 11: Sustainable Cities and Communities

   The article highlights the importance of infrastructure finance in supporting the development of sustainable transport systems. This aligns with SDG 11, which aims to provide access to safe, affordable, accessible, and sustainable transport systems. The article also mentions the role of infrastructure finance in reducing the adverse environmental impact of cities.

Table: SDGs, Targets, and Indicators

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Source: gfmag.com

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