In brief

On 26 June 2022, US President Joe Biden together with G7 officially launched the Partnership for Global Infrastructure and Investment (PGII). G7 leaders pledged to raise USD 600 billion in private and public funds over five years to finance the required infrastructure in developing countries.

Background

On 26 June 2022, US President Joe Biden together with G7 officially launched the Partnership for Global Infrastructure and Investment (PGII). G7 leaders pledged to raise USD 600 billion in private and public funds over five years to finance the required infrastructure in developing countries. The US alone are looking to “mobilize” USD 200 billion for PGII over the next five years through grants, Federal financing, and leveraging private sector investments. The EU has announced a further EUR 300 billion of investment capital. G7 expect the capital to come from “like-minded partners, multilateral development banks, development finance institutions, sovereign wealth funds, and more”.

Based on the initial information available, the scope of the PGII appears is wide and includes tackling the climate crisis, bolstering global energy security, developing clean energy supply chains, strengthening cybersecurity and further developing digital and health infrastructure. It also focuses on gender equality and equity.

We expect critical minerals to be one of the PGII’s areas of focus. Following the launch of the PGII, the White House announced that “the G7 will make a commitment to intensify development of responsible, sustainable, and transparent critical minerals supply chains and establish a forward strategy that takes into account processing, refining and recycling.” We welcome this commitment in the context of the energy transition – the deployment of clean energy technologies such as solar photovoltaic plants, wind farms and electric vehicles is driving demand for minerals and metals that are vital in the manufacturing of such technologies and therefore significant amount of state support and private investment into the critical minerals sector is crucial to match the demand with the supply.

The details of the PGII are yet to be unveiled, but it is very clear that it will be a significant catalyst for the energy transition the world is undergoing right now as well as closing at least some of the infrastructure gap. Clearly, PGII will create further investment opportunities in the energy transition and infrastructure space.