Infrastructure Withstood the Crisis, French Minister Tells Vauban Conference

Infrastructure has proved its resilience during the pandemic and will become even more resilient in the future, a French government minister told a conference hosted by Vauban Infrastructure Partners.

Agnes Pannier Runacher, France’s Minister of Industry, told delegates at the Vauban conference that the rapid digitalisation of infrastructure during COVID-19 will further enhance the value and attractiveness of the asset class.

“The health crisis has shown the critical nature of infrastructure,” Pannier Runacher said. “Infrastructure is at the core of social and economic life through utilities, telecoms, transport networks and hospitals.”

“The robustness of infrastructure has become a primary concern for our government and it was found to be reliable during the crisis. Digital processes swung into action to support infrastructure and they will now be a big part of the future.”

The conference was attended by 350 infrastructure industry professionals, and included two panels of high-profile industry figures. The first panel discussed the digitalisation of infrastructure in a post-COVID world, while the second addressed how international investors were adapting to the new environment.

The conference also saw the launch of a report by Vauban and Altermind, a consultancy, which contends that the digitalisation of infrastructure is an agent of both resilience and opportunity in an uncertain world. Industry professionals, public bodies and academics participated in the report, called The Era of Infrastructure 4.0.

The report argues that the world economy could take one of four possible directions:

• Degrowth, whereby communities reduce substantially economic activity and fold back without any international cooperation.
• Chaos, whereby ill-conceived short-term and non-cooperative policies lead to financial and economic shocks.
• Roaring Twenties, where international co-operation is solely focus on short term recovery and ignoring the challenges of climate change.
• A Green New Deal scenario in which the shock of the COVID-19 crisis encourages the international community to plan for a long-term, sustainable future.

“We should aim for the green new deal scenario” said Pannier Runacher. “It is by far the most desirable and we will employ all means towards doing it.”

Gwenola Chambon, chief executive of Vauban Infrastructure Partners said the health crisis revealed the value of connectivity. “Our study clearly points out how digitalization of infrastructure is a key to enhance their resiliency as well as their ability to cope with the combination of societal, environmental and technological transitions likely to shape our society in the future.”

The digitalisation of infrastructure is part of the solution for climate change issues, according to the European Investment Bank (EIB). Ambroise Fayolle, Vice-President of the EIB, told delegates at the Vauban conference that innovation would lead to a more sustainable economy. “There is great value in having more integration between the physical asset and the people operating it,” said Fayolle.

Digitalisation would help the EIB achieve its climate roadmap, agreed in November 2020 by all 27 EU states, over the next five years. The pillars of this roadmap are:

• €1 trillion in investment for environmental sustainability in the decade to 2030.
• Aligning all financing from the end of 2020 with the Paris agreement.
• More than 50% of financing dedicated to green investment by 2025.
• More green advisory services and financing of innovative low carbon technologies.
• Support for green capital markets.

The strengthening of the commitment by international governments and institutions to sustainability has been a rare positive from the pandemic. Chambon said although some activities during the pandemic were emergency measures, many will become a fixture of life. “Sometimes emergencies have positive outcomes since they fast-forward historical processes that could take years otherwise,” Chambon said. “That is a big lesson from this crisis and a major benefit for infrastructure in general and digital infrastructure in particular.”

Pannier Runacher warned that the task of ensuring infrastructure is resilient has not been completed despite rapid advances. “We need to adapt and upgrade infrastructure,” she said. “This is challenging because it requires change in the economic and social model. Nevertheless, I will push hard for a green and digital transition.”