Inside Infrastructure: Outlook for Infrastructure and Energy in 2026 (Part II)

Building on the perspectives we shared last month on the global forces that are expected to shape the infrastructure and energy markets in the year ahead, Part II of our 2026 outlook focuses on specific jurisdictions and market hotspots around the globe, as our partners anticipate how key trends and risks are likely to play out at a local level.

Do scaling sectors such as data centres and nuclear have strong momentum in all markets? Which jurisdictions are continuing to champion the energy transition through upcoming regulatory changes to facilitate investment in this area? We spoke with Freshfields partners across our global network to answer these questions and more.

–  Jessamy & Richard

United Kingdom

“As the M&A market re-gains momentum in the UK, we are seeing auction processes become more fluid. Significant valuation gaps between bidders and sellers will likely persist for some assets in the infrastructure market, prompting sellers to ‘pre-qualify’ bidders or pivot to a bilateral process at an earlier stage, so as to avoid the expense, disruption and PR of a “failed auction”. We are also seeing parties explore more hybrid/preference equity structures in order to bridge valuation gaps and/or de-risk investments.

In the UK M&A markets more broadly, we have seen more strategic partnering between corporates and sponsors, including carve-outs (such as Smiths Group’s sale of Smiths Detection and ABB’s sale of its robotics division) and partial divestments to create new joint ventures (such as BP’s divestment in Castrol).

The digital sector and adjacent infrastructure (such as energy generation, networks and network interconnectors to support the capacity demands of data centres in particular) will remain attractive for UK investors in 2026. The steady flow of transport deals in 2025 looks set to continue, potentially with less of a focus on airports—many of which traded or refinanced in recent years—and more on sub-sectors that have seen less activity in recent years, such as ports. Whilst renewables and regulated utilities remain challenging, we anticipate chances for opportunistic investment in some UK regulated sectors, including water.”

– Richard Johnson, Partner

Belgium

“Belgium moves into 2026 with a clearer sense of direction across its energy and infrastructure landscape. Building on the country’s established strengths in offshore wind and its central position in Europe’s gas and power networks, regulators and market participants are accelerating efforts to reinforce and modernise the national and regional systems.

A notable development is the growing prominence of carbon capture and storage (CCS) in Belgium’s transition strategy. The recent designation of Fluxys as CO₂ Network Operator marks a turning point and is a significant step towards assembling the regulatory and infrastructure foundations needed to support large scale industrial decarbonisation and cross border CO₂ transport and storage solutions. As industrials seek credible pathways to meet tightening climate requirements, CCS seems set to become an increasingly strategic component of the energy system. Battery storage is also emerging in 2026 as a necessity for the energy landscape, even if permitting aspects remain under discussion in Belgium. 

For investors, the most compelling opportunities in 2026 are expected to centre around renewables, electricity, and CCS infrastructure. As the regulatory environment evolves, successful investment strategies will rely on early stakeholder engagement (including with the regulatory bodies) and disciplined management of permitting and execution risk.”

– Frédéric Elens, Partner; Théodore Milos, Associate

Germany

“Germany’s infrastructure market is expected to accelerate rapidly in 2026 as the government starts deploying its €500 billion special budget. The surge in public investment is set to catalyse large-scale upgrades and modernisation, particularly in energy, transport, and digital networks. Investors will want to look out for opportunities in climate‑neutral and flexible energy generation assets, grid expansion, and sustainable mobility—paired with innovative financing structures. Digital infrastructure will also remain a key growth driver throughout 2026, with data monitoring technologies and smart-city solutions projected to grow rapidly, alongside continued interest in data centre projects.”

– Carsten Bork, Partner

Italy 

“In Italy, we expect the infrastructure and energy opportunities in 2026 to be shaped by three converging forces: the acceleration of the energy transition to meet 2030 targets, an energy mix still heavily reliant on gas—with structurally higher and more volatile power prices—and rising energy demand from digital and industrial users, including data centres and storage. 

Looking ahead, we will see a growing wave of renewables and BESS M&A, as fragmented development pipelines consolidate and project‑finance and incentive frameworks become more bankable. We expect to increasingly help sponsors, utilities and industrials use cross‑border M&A, carve‑outs and joint ventures to build resilient Italian platforms that combine renewables, storage and infrastructure with a balanced allocation of regulatory, grid and revenue risk.”

– Nicola Asti, Partner; Giulio Politi, Senior Associate

Spain

“The expectation for 2026 is that Spain will continue to be marked by the acceleration of the energy transition and digital transformation. A major trend will be the significant expansion of green hydrogen projects, with several plants expected to become operational by the end of the year. Another continuing trend will be the boom in digital infrastructure, particularly the construction of data centres. Spain is positioning itself as a key digital hub in Southern Europe, attracting significant investments from major international players. 

There will be a continued push for decarbonisation and energy efficiency, supported by the Spanish government's "España Digital 2026" roadmap and the EU's "Fit-for-55" package. These initiatives aim to reduce greenhouse gas emissions, increase the share of renewable energy in the electricity mix, and improve energy efficiency across various sectors. Spain's goal is to have 81% of its electricity generated from renewables by 2030, and the groundwork laid in 2026 is expected to be crucial for achieving this target.

A key driver in 2026 will be the evolving regulatory landscape. The Spanish government is actively promoting foreign investment in strategic sectors like renewable energy, electric vehicles, and the circular economy. This includes streamlining permitting procedures for renewable energy projects. Additionally, a new regulation coming into effect in the spring of 2026 will allow renewable energy sources like solar and wind to participate in voltage control services, which were previously limited to conventional power plants. Investors should pay close attention to regulatory changes and potential bottlenecks. Grid congestion is one challenge, which could lead to curtailment of renewable energy projects and impact profitability.”

– Miriam Pérez-Schafer, Partner

MENA

“The MENA region is on track to experience exceptional growth in 2026, with infrastructure investment forecasted to more than double in Saudi Arabia and the UAE by 2033—part of a broader US$1.5 trillion opportunity. MENA will continue to attract robust infrastructure investment across rail, power, digital, and water—especially desalination—driven by ambitious project visions in Saudi Arabia, UAE, and Egypt. International partnerships continue to bring leading technology and expertise to projects, while emerging financing options and robust market dynamics support expansion. As global investors navigate evolving tariff regimes and regulatory complexities, MENA will continue to be a promising venue to deliver large-scale infrastructure and energy projects in 2026—and beyond.”

– Charlotte Stevens, Partner

Africa

“African economies are projected to grow by 4.0% in 2026, signalling resilience despite high debt burdens, fiscal constraints, and global uncertainty. The defining trend for 2026 will be the accelerating investment in energy and digital infrastructure, driven by industrialisation, digitalisation, and the adoption of electric vehicles. Power demand is expected to more than double by 2050, requiring over $30 billion in annual power investment by 2030. This creates attractive opportunities for private capital, particularly in renewables—solar and wind are forecast to reach 41% of the power mix by 2050. Prioritising renewables and digital infrastructure assets with strong fundamentals, and implementing stringent risk management strategies, will be key to navigating volatility and execution risks in African markets.

Nuclear development in Egypt, Ghana, Kenya, and South Africa’s planned 10 GW expansion further diversifies the energy opportunity set, though it carries execution and regulatory risks. 

Rapid growth in data centres across South Africa and Kenya, expected to consume over 21 TWh by 2030, reinforces demand visibility, while highlighting challenges around grid capacity, project bankability, and policy stability. To seize upcoming opportunities and manage risk—especially in these emerging sectors—investors should target projects supported by robust business models and credible regulatory frameworks.”

– Amanda Mapanda, Senior Associate

Asia

“Much was written about Asia’s digital infrastructure boom heading into 2026, however, there is a concern that liberal regulatory environments and abundant financing are leading to intense construction activity in certain high density urban centres, and large capex outlays required for construction, before proven revenue. 

Nevertheless, with the growing use of AI (not to mention the looming introduction of autonomous vehicles), the future looks bright for those operators that are able to meet the ever-increasing demands of their customers (including hyperscalers), who in turn are becoming more selective, placing greater emphasis on track record, execution capability, delivery speed and build quality. For those operators that are unable to scale or deliver reliably, the future is less certain. This could lead to a new cycle of consolidation, distressed asset sales and accelerated M&A activity as stronger players move to secure strategic capacity and weaker ones struggle to keep pace.”

– Harry Evans, Partner

“In 2025, the Vietnamese government initiated an unprecedented series of legal and administrative reforms with the goal of achieving double-digit GDP growth in the coming years and avoiding the middle-income trap that many other countries in the region have fallen into. At the end of January, the country’s 14th National Party Congress affirmed the current senior political leadership and their policy agenda of economic growth, which contemplates significant public investment into infrastructure projects together with a renewed emphasis on the domestic private sector as well as attracting foreign direct investment.

In 2026, infrastructure investors should expect to encounter lofty ambitions from the central government and the private sector spanning asset classes, including ports, aviation, high-speed rail, energy, industrial real estate, digital infrastructure and critical minerals, but also remain mindful of the practical difficulties and risks involved in executing projects in Vietnam, which vary significantly depending on asset class.”

– Eric Johnson, Partner

United States

“One key development in 2026 will be the move away from the US’ traditional reliance on imports of critical minerals essential to the defence and technology sectors. Geopolitical tensions and government incentives designed to onshore these supply chains are already driving a significant uptick in financing for domestic mining and processing projects for minerals like lithium, cobalt, and rare earth elements. The government is playing a more active role through direct investment and offtake agreements pioneered by the Export–Import Bank of the United States and the Department of Defense, which is providing the certainty needed to attract private capital. This is a long-term play, but the foundations being laid now are crucial for the future of American industrial competitiveness and national security.

Although critical minerals are relied on for renewables, battery storage and turbine production globally, a change in the wind for renewable energy policy in the US means the increased domestic critical mineral yield will not be majorly funneled into the energy transition. We will likely see investors narrowing their focus onto mature renewables assets and projects. The energy demand from data centres and the need to manage grid volatility might see solar plus storage projects attract investors in the year ahead.”

– Kyle Lakin, Partner

Conclusion

In 2026, the global positive outlook for the digital infrastructure sector remains a consistent theme at a regional level. Another common theme across many jurisdictions is the ongoing volatility—whether in energy production, prices, politics or policy—that is expected to be a key feature of 2026. While many jurisdictions across Europe, the Middle East, Africa and Asia continue to invest heavily in renewables, the US is a notable exception. A clear understanding of the different ways in which these factors will impact infrastructure trends on a regional basis will be critical for investors in understanding how to unlock the opportunities presented by the growth expected for the energy and infrastructure markets around the world.