Investing in essential infrastructure

Essential infrastructure - hospitals, schools, flood protection - is the backbone of thriving communities. At PGGM, we invest in these assets through public-private partnerships (PPPs), helping deliver long-term value for society and stable returns for our pension fund clients. 

Our PPP portfolio covers 70+ projects across a wide range of social infrastructure: hospitals, schools, public buildings, affordable housing and, also flood protection and public transportation. These are not luxury projects, but assets society relies on every day. By providing long-term capital and expertise, we help ensure vital public services are delivered, maintained and improved sustainably. 

PPPs in practice 
In a typical PPP, the public sector defines the needs - for example new hospitals or school buildings - and invites private parties to tender for the project. Public sector entities range from the Rijkswaterstaat in the Netherlands to the NHS in the UK to local authorities. At PGGM we invest our clients’ capital through dedicated platforms, often working alongside construction partners, maintenance companies and other investors. 

Once awarded, a project usually runs under a long-term concession agreement, often lasting 20 to 30 years, before being handed back to the public sector. During this time, we receive largely fixed availability payments from the government, providing stable and predictable cash flows that match our clients’ long-term pension commitments and liabilities. This stability has proven to be the case since our first investments in PPPs in 2010 and through the pandemic. 
 
On all of our PPP platforms we hold board seats and play an active role in strategic decision-making. This allows us to ensure projects are delivered responsibly, with a clear focus on quality, sustainability and community benefit. We are proud to have seen the culmination of these efforts resulting in the publication of the first sustainability report at Invesis (ESG | Invesis). 

Partnerships beyond finance 
PPPs are about more than just financing infrastructure; they are about partnerships. The individuals managing our project companies work closely with government authorities, local councils and other stakeholders to ensure these projects genuinely meet community needs and to align on design, functionality and sustainability objectives. These discussions often continue well beyond the construction phase, especially when we explore improvements to existing assets such as installing solar panels, switching to LED lighting or boosting energy efficiency. 

Because PPPs are highly contractual, changes can only happen when all parties share the same ambitions. This makes open dialogue with government bodies and civil organisations essential to achieving shared goals, including those linked to sustainability and net zero ambitions. 

A recent example of a successful partnership is the Wharfedale Hospital project where Invesis worked closely with the Leeds Teaching Hospitals NHS Trust and BAM on a decarbonization project coupled with the addition of two new operating theatres.

Investing in sustainability and the SDGs  
Our PPP investments contribute directly to a number of Sustainable Development Goals (SDGs), including healthcare, education, affordable housing and sustainable cities. 

One of our newest projects, New Melton Hospital is designed to meet the highest energy efficiency standards as one of the first electric hospitals in Australia, fully powered by renewable energy. We are also involved in the Higher Education Bundle 2 project in Ireland, which will deliver nearly 35,000m² of accommodation, encompassing five major facilities across three leading technological universities across the country. 

These projects demonstrate how we combine long-term financial returns with positive societal outcomes: stable returns for our clients and better hospitals, safer schools and improved infrastructure for communities. 

Exploring new opportunities 
While our PPP portfolio has historically focused on northwestern Europe, we are now increasingly active in Australia, where governments strongly support PPPs for delivery of affordable housing and healthcare infrastructure. 

We are also monitoring how PPP frameworks might be used for other key sectors, such as energy transmission or even defense infrastructure. Each new opportunity requires careful consideration to ensure that our investments remain aligned with our clients’ objectives and societal needs.