Making a difference with critical concession infrastructure
What is concession infrastructure, and why does it represent an attractive and growing opportunity?
Duration: 5 Mins
Date: 18 Mar 2026
Under the PPP model, governments tender projects to the private sector to design, build, finance, operate and maintain infrastructure – for example social and affordable housing, hospitals, roads and rail networks.
These long-term contracts are known as ‘concessions’. In return for delivering and maintaining essential public assets, investors typically receive contracted payments over several decades. But what makes these contracts so interesting for UK pension schemes?
Six key characteristics
- Predictable, predominantly availability-based contractual cashflows
- Potential for significant total returns versus equities or bonds
Low volatility
- Inflation correlation
- Supportive of UK productive finance and place-based objectives
- Source of diversification
UK infrastructure gap
Our research shows the UK needs some £584 billion (US$780 billion) of infrastructure investment by 2050 just to keep pace with current rates of productivity, urbanisation and demographic change, including some £39 billion for rail investments alone1.Meeting this need will require significant amounts of private capital alongside public funding, and long-term concessions are a model shown to effectively achieve this. The potential opportunities for investors are considerable.
Postive PPP prospects
Recent UK government communications certainly suggest a growing appetite for private investment in homegrown infrastructure projects, reinforcing the relevance of concession-based models.In last year’s 10-Year Infrastructure Strategy, HM Treasury – the government’s economic and finance ministry – expressed a commitment to ensuring a healthy and visible supply of projects to create demand for private capital, by continuing to evolve finance models and explore the use of PPPs.
The strategy paper cites the development of London’s Euston station as an example of how the model would be used. The government signalled its intention to explore the feasibility of using new PPP models for decarbonising the public-sector estate, and in certain types of primary care and community-health infrastructure.
What’s more, the subsequent UK Budget acknowledged the importance of private finance in infrastructure delivery. It included an announcement on NHS ‘Neighbourhood Health Centres’, indicating a private-finance model was clearly back on the agenda at a time when the UK needs to boost growth.
How to invest in concession infrastructure
Leading concession infrastructure managers have the experience to source direct investments in PPPs and long-term concession-style infrastructure assets for UK pension schemes, with the objective of producing long-term sustainable returns.We believe an integrated approach – where origination and asset management are closely connected – ensures continuity of insight throughout the asset lifecycle, enabling high-performance outcomes across investment, development and operations.
Concession infrastructure in action
Over the past 25 years, we’ve invested in 140 concession infrastructure projects around the world on behalf of clients, supporting essential public services from transportation to energy transition.In a period of reduced public investment, our projects illustrate how concessions can deliver infrastructure for the public, efficiently and sustainably.
Here are three of our latest UK projects:
Silvertown Tunnel is one example of a PPP concession infrastructure investment that’s contributing to the local economy. This asset is the result of an availability-based PPP contract to design, build, operate and maintain a 1.4 km twin-bore road tunnel under the River Thames in east London.
The 25-year operational period started last April following a five-year construction period. The tunnel will support economic and population growth in east and south-east London as well as reduce congestion around the Blackwall tunnels (the only other tunnels crossing the Thames in East London).
It is already carrying around 22,000 vehicles on a typical weekday, has reduced journey times during the morning peak by around 70%, and boosted public transport use as a result of its dedicated bus lanes.
Deeside, an anaerobic digestion plant in North Wales with carbon-capture technology and a combined heat-and-power facility, is another. The plant is designed to convert food and other organic waste into renewable energy which will be sold to the power grid and nearby industrial partners. It will also produce green fertiliser which will help reduce our reliance on chemical fertilisers.
We conducted a whole-life carbon analysis which demonstrated that the plant should achieve an exceptionally low lifecycle carbon intensity of 0.98 gCO2e/kWh. That’s well below the 100gCO2e/kWh threshold set by the EU for sustainable power generation and is in line with the UK green energy framework. As such, the plant will contribute to the reduction of the UK’s carbon emissions and help the transition to a circular economy.
Whilst not pure concession infrastructure, the long term, policy supported revenue model offers many of the defensive features investors associate with concessions. It’s underpinned by the government’s Green Gas Support Scheme, which supports projects like Deeside that help displace natural gas.
Velindre Cancer Centre represents a major investment in the future of sustainable healthcare for Wales. The centre is being built to meet the highest sustainability standards and will provide high-quality cancer care services to over 1.5 million people.
Construction began in March 2024, with completion targeted for March 2027. The facility is designed to use all-electric solutions and air source heat pump infrastructure – supporting low-energy use as well as low-operational carbon.
A strategy is also in place to reduce site waste through the off-site manufacture of components. This minimises transportation requirements and creates efficiencies in construction and maintenance.
Final thoughts
Local government and defined contribution pension schemes need reliable income streams to support their increasing cash flow needs. At the same time many have UK productive finance and place-based objectives as well. An experienced concession infrastructure partner, such as Aberdeen Investments, can be an invaluable partner in helping to achieve those goals.
- Source: Aberdeen, May 2025
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