Europe’s renewed focus on achieving the green energy transition, favourable monetary policy and governments prioritising economic security have made the region increasingly appealing to investors, according to a new report. Along with the Trump government’s unpredictable tariff policies and stalled green ambitions, this has resulted in “significant capital reallocation towards Europe,” says a report from Alvarez and Marsal, which found that “deal values in the European infrastructure sector have increased by more than 25% over the past six months”.
The report went on to say that Europe has been home to 44% of infrastructure investment since 2014, more than North America’s 34%. This is driven by “strong political support for large-scale infrastructure projects, particularly in renewables and data centres”.
It said, “Investors see Europe as an emerging leader in sustainability focused infrastructure like green and digital sectors,” with the International Energy Agency forecasting significantly higher investment in clean energy, low-emissions electricity and grid infrastructure to 2034. The report highlighted structural challenges that hinder private infrastructure investment in Europe, compared with the US. Europe’s fragmented capital markets are far smaller, it has lower R&D spending, fewer high-growth firms and more small, low-growth companies, as well as limited labour mobility, an aging population and bank-dominated finance.
Read the report here