The volume of privately-financed infrastructure and energy transactions finally slowed in the first quarter, dipping to 624 closed deals —according to Infralogic’s 1Q23 Rankings and Trends Report. It was the lowest total for any first quarter since 2019, when only 618 transactions closed. In comparison, 873 deals closed in 1Q22 and 747 in 1Q21.
Deal values, however, tell a different story. 1Q23’s USD 193.64bn in closed deals makes it the second most active first quarter in at least a decade — second only to 1Q22’s USD 282.6bn. In comparison, USD 178.6bn closed in 1Q21, and USD 191.9bn closed in 1Q20.
Infralogic’s latest Rankings report covers infrastructure financing activity, including specific Rankings of Project Finance (greenfield, refinancings and additional financing); M&A; and Energy Transition and Renewables.
Large gas deals dominate market
Energy was the quarter’s largest sector, capturing 42% of the market by deal value — a significant increase from 22% of the market in 1Q22; 29% in 1Q21 and 17% in 1Q20. Energy sector deal value was USD 81.10bn in the quarter, though deal volume fell to 73 projects. That translates to an average value of about USD 1.1bn per transaction.
Driving the sector’s strong showing were four large gas transactions: the National Grid Gas Sale (USD 9.87bn); Port Arthur LNG Phase 1 (USD 9.82bn); the South Jersey Industries Sale (USD 8.1bn) and Plaquemines Parish LNG Phase 2 (USD 7.8bn).
The US remained the top private infrastructure and energy market in 1Q23, with 150 transactions worth USD 70.6bn, followed by the UK, with USD 22.2bn across 61 transactions. The US alone represented more than 36% of total deal activity by value:
The quarter’s top overall sector, LNG export terminals, was also the top sector in the US — with five deals worth USD 19bn — beating out Solar PV (57 deals, USD 13.17bn) and Onshore Wind (6 deals, USD 1.22bn).
The bottom fell out of the PPP market in 1Q23, with declines of more than 50% in the number of projects, and 75% in deal value. Only 46 PPP deals worth USD 10.54bn closed during the quarter, compared with 97 deals worth USD 47.03bn in 1Q22. The largest PPP deal in 1Q23 was also an energy deal: the USD 1bn Syrdarya II 1.6GW CCGT PPP project in Uzbekistan. More than half of PPP transactions during the quarter were greenfield deals, with USD 5.88bn in total transaction value.
The gas boom also triggered an increase in energy transition activity during the quarter, which includes renewable activity. Four hundred energy transition deals worth USD 76.32bn closed during 1Q23. Investment in energy transition sectors is growing steadily. In 1Q22, there were USD 69.39bn in energy transition deals; 1Q21 saw USD 67.87bn; and USD 62.92bn closed in 1Q20.
This article is just one example of the many articles published daily by Infralogic’s global news and analysis team. For more information and to request a trial of our full news service – including our extensive databases of transactions, funds, investors, advisors, lenders and industry rankings – visit Infralogic.com.
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