The Impact of Technological Disruption on Infrastructure
This article aims to address the impact of new innovations on infrastructure and ways to mitigate the risk from both a debt and equity perspective.
There is little doubt that given the pace of disruption, and the price of infrastructure being driven down exponentially, existing concession contracts will be renegotiated. It would be wise to agree upon the broad principles of renegotiation upfront, at the signing of the concession agreement, in order to be able to preserve returns during the life of the investment and to ensure adequate debt service.
The future of infrastructure is dynamic and exciting. Organizations and stakeholders would do well to prepare for it by fully understanding the impact of technological risk, being able to articulate it, considering mitigation principles, and pricing it correctly.
