The latest edition of IFR Outlook – S&P’s monthly newsletter summarising key infrastructure and project finance-related research and rating update news – is out now, and the outlook is green-tinted. This month, Michael Wilkins, Managing Director of Infrastructure Finance and Head of Global Environmental & Climate Risk Research, describes a new product to analyse and estimate the environmental impact of bond projects or initiatives via a ‘green’ bonds rating, while Laurence Hazell, Director, explains S&P’s proposal for, and methodology behind, Environmental, Social, And Governance (ESG) Assessments. The timing couldn’t be better, as green bond issuance in real estate is showing real signs of growth, particularly in Europe, according to the article contributed by Analyst and Senior Director, Eric Tanguy.
Of course, the issue of Brexit’s impact on investor appetite for the UK’s infrastructure sector remains a running theme. Michael Wilkins suggests that while confidence is still shaken, things could pick up in the longer term.
Also under scrutiny are the UK’s top six energy companies, Centrica, EDF, SSE, RWE, E.ON, and Scottish Power. Pierre Georges, Director in Utilities, explains that government reforms designed to stimulate competition in the power sector threaten to constrain revenues and market shares for the ‘Big Six’.
Across the Atlantic, Michael Ferguson, Director of US Energy Infrastructure, explores the future of the US nuclear industry, explaining that low gas prices are putting pressure on generators, resulting in the retirement of more nuclear plants.
And from Dubai, Karim Nassif, Regional Head, suggests that low oil prices, subdued economic growth and cheap bank funding relative to the capital markets are to blame for the sluggish corporate and infrastructure sukuk market in the Gulf Cooperation Council (GCC).
In other news, S&P has improved its rating on Scotland And Southern Gas Networks to ‘BBB+’, while its outlooks on oil and gas companies Azerenerji and SOCAR have been revised to negative following similar updates on the state of Azerbaijan.