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By: Elizabeth Kirk, Nadav Klugman, David Ridley - White & Case

Bank lenders have traditionally been the primary providers of debt to finance infrastructure project development, but private debt providers have recently expanded their presence in the space, opening up an alternative financing source to the market.

Despite the presently difficult fundraising environment-the most challenging for private markets since the global financial crisis-infrastructure debt fundraising more than doubled year-on-year in 2023, including two of the year's 10 biggest private debt funds, according to Pitchbook.

Unsurprisingly, the largest private debt fund managers have led the way. Industry giants such as Ares Management, Blackstone and Brookfield Asset Management helped to drive almost US$9 billion in fundraising in 2023 for infrastructure financing strategies.

Private debt funds have historically focused on providing financing to private equity sponsors and sub-investment grade borrowers, while infrastructure assets have typically raised their financing from banks, governmental financing sources and public debt capital markets. However, private debt funds are looking for ways to diversify beyond their core direct lending offerings, with infrastructure debt emerging as an appealing adjacent lending category.

Moreover, opportunities for these firms to win more market share in the infrastructure financing space have increased in recent years, with regulatory pressures li......................

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