Investments in infrastructure: huge backlock

October 2021 – The coronavirus pandemic has shown that even in the developed countries of Europe, there is a huge investment backlog, especially where digital infrastructure is concerned. This pressing topic will be given a suitable stage at this year's "Infrastructure Investor – Global Summit 2021" in Berlin in mid-October. Hamburg Commercial Bank will play a central role.

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Smart infrastructure is the answer to several of the biggest challenges of our time: climate change, urbanization, demographic development and the scarcity of resources. In this context, technology is tasked with making life easier, safer, more pleasant and more sustainable. "Digitization facilitates the meaningful interconnection of previously separate areas such as power grids, buildings, factories and mobility. This makes optimal use of renewable energies, for example, and enables entirely new business models, such as the monetization of energy storage for grid stabilization," says Inka Klinger. She is Head of Project Finance at Hamburg Commercial Bank. From October 18 to 21, project finance experts from Hamburg Commercial Bank will attend the summit of the global infrastructure community in Berlin: the "Infrastructure Investor – Global Summit 2021".

Infrastructure

HCOB: First mover and innovator in infrastructure

For four days, everything in the German capital will revolve around the topic of global and, above all, digital infrastructure. The social aspect of the issue and sustainability will also be discussed in detail in the international high-level forums and panel discussions.

The need to catch up, especially in digital infrastructure, is immense. This applies both to the private as well as the public sector. German municipalities alone have accumulated an investment backlog of around 150 billion euros over the past few years. To clear this chronic underinvestment, Germany needs a public investment offensive: an additional 457 billion euros, or thereabouts, need be invested in Germany's public infrastructure over the next ten years. This is the result of a study conducted in June 2021 by the Deutsche Institut für Urbanistik (German Institute of Urban Studies, Difu) and the Macroeconomic Policy Institute of the Hans Böckler Foundation on behalf of the Friedrich Ebert Foundation, which is close to the SPD.

This means that financiers and implementation expertise are urgently needed. This is where the Hamburg Commercial Bank comes in. It sees itself as a first mover and innovator in the field of infrastructure investments, as Klinger puts it.

Infrastructure financing by asset class and region

HCOB: a leader in financing the expansion of fiber optic networks

Hamburg Commercial Bank has been involved in infrastructure projects since 1994. It is one of the top 15 financiers of infrastructure projects in Europe.
In mid-2021, for instance, it completed one of the most important infrastructure transactions in fiber-optic expansion on the Iberian Peninsula. On behalf of its long-standing client dstelecom, the bank structured the expansion financing that will enable Portugal's leading private open-access fiber network operator to provide a total of one million connections.

"Our top position in the market is an incentive for us to offer our customers the best solutions. This also means that we are constantly developing ourselves and are aware of the trends in the industry and help shape them," says Klinger, adding: "By means of numerous transactions, we are successfully involved in the expansion of broadband networks in Germany and in the development of data centers. Our experts are familiar with the megatrends for digital infrastructure and all aspects of power and energy, such as district energy, storage and waste-to-energy. Together with our customers, they are developing projects that will move thing forward."

Using optical fiber is more energy-efficient than using copper or VDSL. Fiber optic networks enable efficient expansion of the digital infrastructure in Europe. Transactions like the recent one in Portugal fit perfectly into the loan book of Hamburg Commercial Bank, which acts in accordance with established ESG criteria and screens all financing for sustainability and environmental compatibility.