Company: BIP-PB
Filing Date: 2025-03-24
Form Type: 20-F
Source: 0001628280-25-014380
Chunk: 292

Company: Brookfield Infrastructure Partners L.P.
Filing Date: 2025-03-24
Form: 20-F
Item: Item 5
Chunk 292
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Brookfield Infrastructure 165

•Digitalization - refers to investment opportunities derived from exponential increases in data consumption. Large scale capital is required for greenfield development or the retrofit of digital backbone infrastructure, including fiber, wireless infrastructure and data centers.

•Decarbonization - investment opportunities for Brookfield Infrastructure relate directly to investments in utilities or residential energy infrastructure businesses that benefit from capital deployed to reduce or eliminate emissions from the expansion of their networks or installation of new energy efficient products.

• Deglobalization- supports the reshoring of essential and strategic manufacturing processes and supply chains.

All three “mega trends” are expected to drive significant capital deployment opportunities for Brookfield Infrastructure in the years to come.

Over the years, our partnership has evolved in terms of the scale of our business, and the growth and maturity profiles of our assets. We have also taken strides to re-position our funding strategy, allowing us to become more self-reliant in funding our growth. We have accomplished this by executing well on our asset rotation strategy, which is an integral component of our full cycle investment plan.

In allocating every dollar of FFO, we typically invest about 15-20% to satisfy maintenance capex obligations, with another 15-20% going into smaller, recurring growth projects, and the remaining 60-70% being utilized for distributions to unitholders. The primary source of funding for new investment activities and large-scale expansions will continue to be asset sales, with capital market issuances available to fund outsized growth opportunities.

Capital recycling has been a critical component of our full-cycle investment strategy and is important to our business for the following reasons:

•Key value creation lever- most infrastructure assets reach a maturity point, where the pace of capital appreciation or same-store growth levels out. Capital appreciation is maximized in periods where there are operational improvements, increased capacity utilization and capital expansion. Absent these factors, we would generally consider these assets to have mature income streams. At this point we will look to sell them at attractive returns and redeploy the proceeds into new income streams that will earn our 12-15%+ target returns.

•Alternative source of capital- we sometimes issue equity to fund growth, however capital markets are not always available and thus capital recycling becomes an important alternative source of funding. We believe that capital recycling allows us to be more strategic and focus on selling bond-like businesses at a very low discount rate, while potentially increasing returns to unitholders by avoiding dilution on our high-growth businesses.

•Institutes capital discipline-