Current infrastructure slows down economic growth in Europe

The EU invests 2 to 3% of its GDP in infrastructure every year. At the end of the last century, this figure was still 5 to 7% on average. This underinvestment is increasingly hampering economic growth. For energy infrastructure alone, the EU needs to invest at least an additional $110 to $150 billion every year. Modernizing digital and transport infrastructure in the EU requires $340 billion per year.

According to researchers, outdated or insufficient infrastructure costs the EU one percentage point of GDP growth each year. Belgium's investment needs for the next ten years are estimated at $28.4 billion per year (excluding measures related to the energy network).

According to Johan Geeroms, our Director Risk Underwriting Benelux, there are clear bottlenecks that require special attention. In addition to the electricity grid, the most significant investments for Belgium are in roads and port infrastructure. "This makes sense, particularly given the importance of the port of Antwerp. The country is also densely populated and suffers from significant congestion due to extreme traffic flows."

The energy transition is proving to be the main driver of infrastructure investment worldwide. By 2035, 70% of all infrastructure investment worldwide is expected to be related to energy (a total of $26 to $30.2 trillion). Johan Geeroms: “In Europe, the focus is on rolling out wind and solar energy, but it is precisely the associated electricity grids that are lagging behind. Without grid reinforcement, sustainable production and storage cannot be profitable or safely connected. This uncertainty about electricity supply is, of course, detrimental to businesses.”

The energy market is not the only one facing capacity issues. The same is true for digital infrastructure (fiber optics, mobile networks, data centers, etc.). Johan Geeroms: "Compared to the Netherlands, for example, Belgium's digital infrastructure has some obvious catching up to do. Think of 5G, but also data centers, telecom connections, and fiber optics. Expansion and sustainability are essential, particularly due to the exponential demand associated with AI, cloud solutions, and digitization in the business world. Network congestion is a persistent obstacle in this regard."

The changing role of private investors is striking.  Whereas private financing previously complemented public investment, private capital is now the basis for many large-scale projects. According to the report, global assets managed in unlisted infrastructure rose from less than $25 billion in 2005 to more than $1.5 trillion in 2024.

The focus is no longer on traditional sectors such as roads and utilities, but on digital infrastructure, energy storage, and smart grids. For investors, these assets offer attractive inflation-linked returns with relatively low risk.