In our latest interview as part of our perspectives on infrastructure series John Mayhew, Head of Infrastructure Finance at M&G Investments, reflects on the role of government and policy in providing liquidity for asset classes which are new to the market.
John observes that there is plenty of capital available to the more attractive and established projects, but new entrants to the market bringing untested technologies are understandably struggling to compete in the same financing space. Additionally, given the global mandate of many key investors such as M&G, UK projects need to be seen to offer the same investment value as their global contemporaries.
Like many people we have spoken to in this series, John agrees that there is a role for government to play in unlocking capital. Policymakers need to create long term stability encouraging investment in the UK market whilst also providing a route to capital for developers of new technologies.
"There is a thriving private finance market that can provide lots of liquidity for well-structured projects. However, if you go out of that sweet spot of assets that most investors are bidding for, and you move into the quirkier areas of unproven technology, that’s where there is a role for government in galvanising those markets.”