Megatrends are characterised by their significant, long-term impact on our economy and society. Anticipating megatrends and evaluating their effects on the world economy is crucial for selecting investment opportunities, which remain sustainable in the long run.

B Capital sees three, interconnected megatrends, which lead to major structural shifts in infrastructure investing: Climate change, Technological advancements, and Urbanisation.

Climate change

The world is heating up. This may have severe consequences like rising sea levels, increasing heavy precipitation, shrinking glaciers or thawing permafrost. Expected indirect effects of rising temperatures on the environment and humankind may be e.g. increase in water stress or floods, increasing spread of pests and pathogens, reduced biodiversity.

Scientific data suggests a correlation between greenhouse gas (GHG) emissions and global warming. In the 2015 Paris agreement, the world community therefore decided to fight further global warming by e.g. setting targets to reduce GHG emissions. Such targets and other political measures to come require investors to think through consequences on existing and future investments.

Irrespective of GHG targets, global energy demand is still expected to increase until 2030 due to, among others, demographic growth and electrification of transportation. The majority of global energy supply is currently generated with fossil fuels (81%), which are considered to be the most significant source of energy-related GHG-emissions. Hence society pursuing an energy transition strategy is key. This includes, e.g. replacing conventional power generation with renewable energy sources and using scarce energy resources more efficiently.

Because renewable energy sources are relatively decentralised, they require new transmission and distribution grid solutions, relying on, inter alia, more interconnectors, smart grids and data infrastructure. Furthermore, the high volatility of energy generation from renewable energy sources calls for more system balancing through reserve capacity and storage solutions.

Infrastructure investment opportunities

  • Energy infrastructure: Renewable generation, storage (e.g. batteries and hydrogen), smart grids, new energy transmission and distribution assets including district heating
  • Digital infrastructure: Data transmission and storage to support the increasingly interlinked international power markets and smart grids
  • Energy efficiency: power saving applications in the manufacturing industry and in the public services (like LED-lighting), district heating

Technological Advancements

Technological innovation leads to rapid shifts due to non-linear progress/changes. Such rapid developments may support some investment strategies while jeopardising others. Significant progress in R&D has resulted in new materials and new applications for existing materials (graphite composites, super conductors, etc.), increasing productivity and decreasing manufacturing costs of energy-related equipment. Photovoltaic panels, for example, are now significantly cheaper on a per watt basis than a few years ago, allowing for grid parity (i.e. no subsidies needed to match the market price of the electricity). Also, new power technologies allow for significant savings in energy consumption.

These underlying trends translate into the following areas of technological advancement in the context of infrastructure: (i) digitalization of the energy and transportation industries, (ii) Internet of things/artificial intelligence, smart city/home applications, and (iii) zero-emission engines (electric and fuel cells). All three areas can be seen as disruptive trends, which may enlarge the relevant investment universe. These three areas together also lead to a sharp increase in data volume and as such create additional investment opportunities focusing on faster transmission networks (e.g. 5G etc.) and high-density and highly efficient data storage solutions.

Infrastructure investment opportunities

  • Digital infrastructure: Data transmission and storage; telecom antennas
  • Energy infrastructure: Smart city and smart grid applications
  • Charging infrastructure for zero emission vehicles
  • Green hydrogen for industrial use


The world’s population is projected to grow to up to 8.5 billion by 2030, which is approximately 1 billion more than 2017, equalling a CAGR in excess of 9%. People increasingly concentrate in urban centres. Ca. 6.5 billion people, or two-thirds of the world population, are projected to live in urban centres by 2030.

These factors imply a rising need for new and the modernization of existing infrastructure. Megacities are competing for the world’s scarce resources, these being food, water, natural resources or energy. Among others, conurbation is a rising challenge for waste management and GHG emissions. To ensure that urbanisation remains sustainable, transport systems need to cope with increased traffic. Thus, investing in zero-emission vehicles and zero-emission public-transportation must be part of the solution. Furthermore, energy will have to be reliably and carbon-neutrally dispatched and growing data volumes (e.g. for smart grids, IoT applications and video streaming) will require a significant build-out of digital infrastructure. In addition, social services, like healthcare and educational systems, will need to adopt to the requirements of concentrated centres of population.

Infrastructure investment opportunities

  • Transport infrastructure: new public transit systems, modernization and electrification of existing infrastructure
  • Energy infrastructure: EV and Hydro vehicle charging, energy efficiency, district heating, waste-to-energy; smart city and smart grid applications
  • Digital infrastructure: Data transmission and storage; 5G-systems
  • Social infrastructure: Water supply and treatment systems; PPPs for e.g. the healthcare, education and security sectors
  • Waste collection, waste-to-energy transformation