Harnessing Private Capital for Public Infrastructure Growth

Good afternoon everyone. Just observing that photo of me was taken quite some time ago. It's a pleasure to be here today to talk about something that's close to my heart and to the heart of global economic growth and social well-being. how we fund, design, and deliver the public infrastructure our communities need. That's a mouthful.

And another way of thinking about it is how can real assets deliver real outcomes for real people. So today I want to share some thoughts on how greenfield procurement models are evolving, why we think the PPP model has got a critical role to play in global infrastructure procurement in the next decade and what the opportunity is for all of this audience as investors to participate and to drive that growth. Before I jump in, I wanted to stop for a second and look at that asset up on screen. It's an exemplar of what I want to talk about today. This is Plenary's newest asset in operations.

It's the new Foots Gray Hospital and at $1.5 billion. It's the biggest private individual private health investment in my home state of Victoria and Australia. It wasn't delivered in straightforward conditions. Contracted in 2021, it faced the twin challenges of being delivered in the most locked down COVID city in the world.

As I said, it's my home city. And it also dealt with all the global supply chain uh challenges that followed. Despite that, it was delivered only days late and less than 5% over the original contracted base price. It's a design icon. It's activated a section of the city that needed it.

It includes $60 million of private investment in commercial and retail uh infrastructure to support the precinct and enliven it. All of that is made possible only by private capital. So, who is Plenary if you don't know us? We're one of the world's largest dedicated public infrastructure developers and long-term investors. Our model is technically led and partnership driven.

We're a developer, investor, asset manager, and ultimately our philosophy is that if you're going to make promises for 25 and 30 years, you should be there for the journey. We're aggressively expanding our global footprint and I'm proud to be giving this talk in Abu Dhabi today because this emirate is a really critical part of the huge story we're currently writing. We have three projects in this emirate and looking to expand. Last year, we partnered with ADQ to prosecute the huge infrastructure pipeline we see coming across the UAE, the GCC at large, and Central Asia. And yesterday, we announced it in principal approval from the ADGM to establish a new infrastructure investment platform to streamline capital into the enormous pipeline we see coming.

when you prepare slides for this, you don't actually know what the order of speakers are. So, uh I didn't realize I'd be last today. I'm very conscious that uh many people have probably already spoken about the macroeconomic context and the hundred trillion dollars of forecast investment need um that we see coming. So, I'll focus only on one thing which is the composition of that hundred trillion dollars. While digital and energy segments are rightfully huge change drivers and getting a huge amount of attention from the investment world, it's worth noting that the sectors of social and transport infrastructure are actually bigger by the capital requirement.

And these are sectors where the PPP models have been proven time and time again to deliver value for money. So clearly the model has a role to play in filling that infrastructure gap. So why are governments turning to PPP procurement? Most of the stats talk about private capital the infrastructure need in terms of the total capital envelope. But it's important to make the point that PPP models are not just about capital although it's a critical enabler.

It's about delivering infrastructure through long-term outcomesbased models and the discipline and innovation that capital brings. PPPs structured well have been proven to outperform traditional procurement. They offer better price certainty over the long term, alignment of risk transfer and user objectives, a single point of accountability, an environment where competition drives innovation, and a framework with a whole of life lens and long-term service outcomes. Payments are made only when services are actually delivered and they're abated for poor performance. and life cycle and management costs are budgeted for the duration of the concession, ensuring that the design focuses on the whole of life cost, not just the build phase.

And one stat I'm particularly proud of is that ultimately end users, 95% of them in one study from my hometown, simply prefer PPP facilities as over traditional assets because they're better to work in and use. So what's the role of private capital has to play in all of this? Ultimately, when private capital is involved in a project, it changes the mindset. Investors scrutinize risk differently, they design differently, they operate differently. They think carefully about maintenance, asset longevity, service standards because their returns depend on long-term operating performance, not short-term milestones.

And globally, the data on that is overwhelming. So, in Australia, PPPs outperform traditional procurement by 10 to 15% on cost and 25 to 30% on time. real outcomes, real people. In Canada, cost growth is typically about 1% in PPPs compared to 29% for traditional procurement. In the UK, where the PFI model has been reviled, 88% of PFI projects were completed on time.

And the World Bank's identified that PPP has consistently reduced construction time and cost overruns. These aren't theoretical benefits. They're lived, measurable outcomes across multiple jurisdictions. evidenced as recently as the foots gray hospital which completed two weeks ago. So where are the opportunities for investors and this is where the conversation gets exciting and targeted for this audience.

From plenary's perspective we've never had seen a bigger pipeline in front of us. When people hear PPP, they might think of hospitals or highways. But for us, we're seeing PPP models applied to smart cities like street lighting, sewer tunnels like the 6 to8 billion project currently being procured in Dubai, transport systems including large-scale metros globally, water, wastewater, waste, circular economy, health, education, public housing, and emerging digital infrastructure. So the point is if an asset has long-term service outcomes and benefits from whole of life management and a public offtaker the PPP family of models can be adapted to deliver it. So around the world we're seeing new and evolving models to do so models that retain the discipline and alignment benefits of traditional PPPs but tailor it to the market conditions and government priorities.

And the really important thing is that it's happening globally. These models are being used everywhere and right now the GCC and Abu Dhabi in particular is at the vanguard of that. In fact, in this region, we've almost trebled the size of our team to chase a massive pipeline as the UAE and Saudi Arabia in particular look to private capital solutions to drive long-term public outcomes. And you can see that on this slide where we talk about what we say our pipeline is for the next two years where the GCC for an Australianbased business that entered this market three years ago is now the biggest market in terms of total capital that we are looking at. So what do the assets look like for investors?

For us, we see globally common characteristics in this strong pipeline, which is basically highquality super core assets, which offer long-term stable cash yields, long-term contracted revenues often 90 to 100%. Low GDP correlation, potential for CPI linkage, and attractive cash on cash IRS in the double digits for green field opportunities when structured and delivered well. They also offer impact. Most PPs, PPPs are essentially community assets. They improve daily life.

For investors seeking impact, stability, long duration exposure. There are not many asset classes that align us naturally to these goals. One of the challenges with the market has always been getting access to these equity opportunities. It requires development capability and the bid processes are challenging. That's where organizations like ours step in because we can reduce friction and support governments and investors to find pathways for capital into projects.

And in launching our ADGM platform yesterday, what we're looking to do is to provide pathways for investors to get access to this enormous wave of projects in region. So to close, we're entering an era of unprecedented global opportunity to invest in highquality assets. Governments are seeking the procurement discipline and outcomes that PPS deliver. Patient investors want long-term, stable, impactful assets, and communities want services that are reliable, resilient, and future ready. Modern PPPs deliver all of this.

The opportunity is enormous. The need is now. And the pathway forward is collaborative. Thank you for your time. I look forward to the conversation.