The Association of British Insurers’ (ABI) Investment Delivery Forum has published a report outlining the steps that could help accelerate private sector green infrastructure investment.

The forum was established last year by insurance and pension companies, and its new report highlighted several recommendations to increasing private sector investment in green infrastructure.

It recommended that public-private partnerships should be better utilised to support green infrastructure projects in achieving investment grade rating through the adoption of models where public funds smooth risk or volatility from investments, allowing private money to deliver long-term, large-scale, and reliable finance.

The report noted that current rules restrict firms to investing in a “relatively narrow” set of asset classes with fixed returns, and the regulatory reform Solvency UK will extend the number of available asset classes.

It also recommended more long-term strategies, from empowering agencies such as the Office for Budget Responsibility or National Infrastructure Commission with greater long-term power, to putting national transition plans and sector-specific strategies, should be put in place.

Furthermore, the forum suggested considering ways to facilitate progress through ‘agile regulatory tactics’, noting that a ‘sandbox’ would allow the industry and Prudential Regulation Authority to discuss and test the merits of assets that do not yet meet requirements, but may do in the future.

Pre-identification of eligible asset types could also help accelerate investment by identifying assets that the regulator is more comfortable with, it added.

A sector-specific approach was called for, with the forum noting that different sectors require bespoke solutions and investment pilots could test whether there will be value not just in returns.

The forum focused on three sectors: Energy generation, energy networks, and housing and property.

Its report also outlined the work the forum is doing in investigating barriers to investment experienced by insurers and pension companies, and suggested possible solutions.

“This report shows the initial results of pooling our industry’s knowledge and working with a range of leading experts across infrastructure, investment, regulation, and economics,” said Investment Delivery Group chair, Baroness Nicky Morgan.

“In parallel with our productive work with the regulator, we look forward to the next phase of our mission, working alongside local and national government to get pilots off the ground.

“These will help evolve funding models, understand the scale of some barriers and test new approaches that could then be scaled up at pace.”

Economic Secretary to the Treasury, Bim Afolami, added: “It’s encouraging to see industry working together to deliver £100bn worth of investment to support UK infrastructure.

“This interim report represents a significant milestone, and the government eagerly anticipates seeing these critical investments come to fruition.”

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