The first quarter of this 2020 proved to be steady for global infrastructure finance, despite obstacles lying ahead due to the anticipated effects of the Covid-19 pandemic.

Global deal value increased by 16.24% compared to Q1 2019, even though deal volume decreased slightly and the year’s first quarter demonstrated the usual cyclical lower numbers observed over past years, reflecting strong drive to close transactions at calendar year-end.

The quarter was marked by a steady positioning for Japanese and French banks, while Russian lenders moved into the top 20 MLA with the closing of the $21.4 billion Amur Gas Processing Plant in March. The infra bond arranger charts were dominated by American banks.

Refinancing deals were a driving force on a global basis for infrastructure finance. Their value reached nearly $75.2 billion, out of which $18.5 billion were for corporate refinancings in the telecoms sector. Refinancing activity in other infrastructure sectors was significantly elevated as well, with a reported $10.82 billion of refinancing deals in mining, followed by $7.3 billion in transport, $5.6 billion in oil and gas and $3.9 billion in power. M&A transactions stood at $62.3 billion and primary financing at $48.2 billion.

North America was the leading market in Q1 2020, racking up more deals and greater value compared to the first quarter of 2019. It proved to be the largest regional market for infrastructure bond financing, with total bond value exceeding $50.25 billion for the period – the highest quarterly value in the last year.

The European market continued to be a safe haven for investors, recording a significant increase in deal value despite a deal count decrease. Total deal value in Europe exceeded $98 billion in the first three months of 2020, against $67.3 billion in Q1 2019.

APAC lending managed to maintain its levels despite a decrease in total value and transaction number in Q1 2020. Total value stood at nearly $29.3 billion generated by 70 transactions. The renewable energy sector was the highlight for APAC in the first three months.

Latin America has continued on a steady course, with infrastructure deal value slightly decreasing compared to the average for 2019 – to a total of $21.5 billion. The region was driven by mining and oil and gas transactions.

MENA saw a dramatic decrease both in terms of deal count and value of transactions. Meanwhile, Sub-Saharan Africa reported an increase in equity investments, making this the preferred instrument in the region. Equity investments in SSA amounted to $2.1 billion, compared to quarterly averages of $760 million for 2019.

Project finance value saw a nearly 15% decrease in Q1 2020 compared to the same period of 2019 (according to the latest data as of end March 2020). Overall transaction value returned to its levels of two years ago, standing at $56.7 billion. However, these values are set to rise as more information becomes available. Effects of the Covid-19 pandemic will impact the market later this year, affecting most projects in early development stages.

Despite lower volumes, the number of big-ticket projects in North America, Europe and APAC brought to financial close in Q1 stand testimony to lenders’ faith in infrastructure assets and honouring commitments made prior to coronavirus gaining a foothold.

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