A Need for Smarter Cities:

Investing in Infrastructure

Infrastructure is vital to economic and social systems because it connects people, goods, and resources. However, the infrastructure in many cities is in desperate need of repair, expansion, or both. Private capital can create solutions-oriented opportunities and play an important role in addressing the infrastructure gap.

Investing in Infrastructure

Investing In Infrastructure

Infrastructure is a multifaceted challenge facing cities globally. In developed countries, infrastructure is abundant yet often has deteriorated or become outdated due to prolonged underinvestment. In less-developed countries, infrastructure is generally inadequate and under-performing as the large scale of needs across different sectors outpaces governments’ ability to invest. Inadequate urban infrastructure presents both short-term and long-term threats to urban communities. In some cities, immediate threats might include structural collapse, electrical grid overload, or water main breaks. Over the long term, threats may come from intensifying natural disasters or population growth outpacing urban infrastructure capacity and development.

In recent years, a surge of private capital has begun to provide funding for critical projects. Since 2011, KKR has invested $3.5 billion in numerous infrastructure projects that we believe have the potential to create shared value for both investors and communities. In addition to providing flexible, accessible capital, KKR brings subject matter expertise and efficient management teams to each of these investments. Recent investments have also brought us the opportunity to form meaningful public-private partnerships.

Strengthening Water Systems

Strenghtening Water Systems

Water – or lack thereof – is one of today’s most pressing issues. Many municipalities have struggled to provide sufficient funding for maintaining their water and wastewater systems. Even in an industrialized country such as the United States, significant water challenges abound. Recognizing an opportunity for private capital and expertise, KKR has made four water-related investments since 2011:

• CITIC Envirotech Ltd., which uses advanced technology to treat wastewater in China (2011)
• City of Bayonne’s water system in New Jersey, U.S (2012)
• Installation of of new meters by the South Staffordshire, UK, water utility to improve system reliability (2013)
• Water/wastewater system improvements in the borough of Middletown, Pennsylvania, U.S. (2014)

Promoting Real Estate Development and Improvements

Urbanization is accelerating as more people migrate to cities to pursue jobs and engage in associated lifestyle benefits. KKR has been an investor in commercial and residential buildings for the past six years, including a number of investments that meet societal and environmental needs in their communities around the world. In 2016, a number of the properties in which we invested focused on energy management initiatives under the guidance of KKR Capstone’s energy expert.

Additional Support for Urban Infrastructure

Some of KKR’s portfolio companies, including Gardner Denver, Trainline, and Sonos, are finding innovative ways to support urban infrastructure and provide social benefits to their communities.

Looking Ahead

Barriers to the development, advancement, and fortification of infrastructure are all too common in cities around the world. This challenge provides vast opportunities for improvements and private capital to fund those improvements. KKR aims to continue to bring solutions that not only address these issues but also incorporate responsible management practices.

Ireland case study thumbnail

Case Study

Ireland Strategic Investment Fund and KKR Credit Joint Venture (2015) >

Download PDF
Banyan Nation case study thumbnail

Case Study

Banyan Nation: Supporting Recycling in Indian Cities (2015) >

Download PDF
Casestudy Gardner Denver Nash

Case Study

Support for Urban Infrastructure: GD, Sonos, and Trainline (2015) >

Download PDF
Casestudy 200Px Calvin

Case Study

Calvin Capital: Expanding Smart Metering Across the UK (2016) >

Download PDF