Increasing urbanization, ballooning populations and climate change all add up to the pressing need for infrastructure that is smarter, more sustainable and more reliable.
Financing plays a vital role in facilitating infrastructure development around the world, especially in times of limited public funding or commercial budgets. However, when it comes to upgrading infrastructure or implementing new technologies, many policymakers and business owners are not fully aware of the financing possibilities that can help manage risks, reduce initial costs, or make complicated projects bankable.
At Siemens, we understand the complex investment decisions behind the infrastructure technologies that matter – by combining our deep technological knowledge and innovative financing expertise.
Shaping urban life with mobility finance
By 2050, 66% of the global population will live in cities. In some key commercial hubs, the commuting population is estimated to increase by over 40% by 2030. Mass transportation must be developed further to increase capacity while improving energy efficiency. However, cities around the world face an investment need of $11 trillion in transportation by 2030, and public resources cannot manage it alone. This is where specialized mobility financing can make a difference.
Megaprojects, such as London’s Thameslink rail network upgrade, face huge investment and financial structuring complexities, including operational, technological and counterparty risks. By financing €1.8 billion in equity and debt while structuring risks in an advisory capacity, Siemens provides the Thameslink network with 1,140 new carriages, with over 15,000 extra seats and energy reduction of 50%.
The future of rail transport will need to connect people and resources on an unprecedented scale. Private financing that is designed to manage megaproject risks and technological life cycles, especially for digitalized solutions, will be key when it comes to driving rail development and helping cities reach their economic and social goals.
Transforming buildings with financing
40% of the energy we use comes from buildings, so we must focus on improving their energy efficiency. Europe alone wastes €270 billion a year in unnecessary energy for buildings. However, many are deterred by the initial cost of installing intelligent building technologies.When engineering and financing solutions come together, buildings can unlock huge energy saving potential – in energy consumption and in cost. A good example of this is Siemens’ energy performance contracting for building technology in more than 10 countries – a combination of consulting, modernization services and customized financing. With this approach, customers do not need to make any initial investment – they simple use the energy cost savings to pay for the installments.
Worldwide, Siemens has modernized more than 5,200 buildings with Siemens' building technologies, with more than €1 billion in savings and more than 10 million tons of CO2 reductions.
Whitepaper 'Smart start for smart buildings': Potentials and pathways for self-financing smart buildings. Download the whitepaper!
Around the world, energy consumption is rising and power networks are growing in both size and reach. In times of risk, energy systems need to be resilient, and an emerging landscape for distributed energy systems will influence the future of energy accessibility. At the same time, digitalization will hold the key to mastering new challenges in energy management, such as a changing generation mix, the addition of generation capacity and the need for upgrades.
However, many of these innovative technologies require sizable investments with potentially long payback periods, making the energy transitions unattractive for many. Financing solutions that understand the world of utility inside out will play a pivotal role in realizing the future of smart energy management.
Smart finance for smart cities
The future of city infrastructure relies on the integration of digitalization. Technological collaboration and risk sharing between the private and public sector – particularly the private financing behind these transformative projects – will be key to realizing smarter cities in the increasingly connected urban world.A growing number of cities are approaching smart transformation through a series of infrastructure projects. Because, however, public sector budgets often lack the funds to leverage the benefits of smart city development, alternative forms of finance from the private sector have become a priority.
Our global “SmartStart” study contains estimates for potential accessible funding that the top 40% of cities could be raising from private-sector asset finance for smaller-scale investments. These investments could be anything from vehicle routing and parking systems to e-vehicles and low-energy street lighting. Click on the button below to learn more about the SmartStart accessible funding in 13 countries around the globe.
As for the larger-scale projects, Siemens’ capacity as an operator, consultant and financier also means we can develop risk solutions to accompany emerging technology – thus reducing mitigation costs and attracting additional investment.
