KBRA Releases Research – 2026 European Project Finance and Infrastructure Sector Outlook: Stable Credit Quality Amid AI Energy Crosswinds
12 Jan 2026 | Dublin
KBRA releases its 2026 European project finance and infrastructure (PF&I) Sector Outlook, examining themes that will likely take centre stage in 2026 as well as developments and ratings trends from 2025.
The European PF&I sector displayed broadly stable credit quality in 2025, and KBRA expects continued stability in 2026. The credit backdrop is supported by modest yet stable economic growth, continued policy support for the renewable/digital transition, a stable interest rate environment, and relatively low—though still volatile—energy prices. The credit outlook balances these supportive factors against reduced fiscal capacity across Europe and the UK, rising constraints on power availability, protracted permitting processes, and increasing complexity, alongside continued geopolitical and trade risks.
KBRA’s European PF&I rating activity in 2025 was concentrated in digital infrastructure transactions, particularly telecom towers and fibre networks, which represented the majority of new ratings completed during the year. These assets continued to show predictable operating performance and stable contracted revenues, supporting the broadly stable credit quality observed in the KBRA PF&I portfolio. Alongside digital infrastructure, KBRA has seen continued interest in sports and venue-related infrastructure, with a number of stadium financings over the course of 2025. KBRA also observed activity in the energy, utility, and transportation sectors on both a HoldCo and OpCo basis.
Key Takeaways
- We expect the macroeconomic environment to remain broadly favourable in 2026, supporting European PF&I credit quality through supportive financing conditions, subdued commodity prices (notwithstanding continued volatility), and power prices underpinned by healthy gas storage levels.
- Renewables will continue to benefit from a broadly supportive policy environment. Data centre growth will instead be shaped by a more mixed policy backdrop that increasingly reflects concerns around power availability and grid capacity.
- Despite the broadly favourable backdrop, several important risks from 2025 will remain in focus and will likely shape PF&I growth and performance in 2026. These include governments’ fiscal capacity, constraints on power availability, protracted permitting processes, and increasing operational and financing complexity, as well as geopolitical, trade, and regulatory risks.
- KBRA’s European PF&I portfolio remained resilient during 2025, with affirmations accounting for approximately 90% of rating actions, upgrades around 5%, and downgrades around 5%. As year-end approaches, most credits carry Stable Outlooks, reflecting broadly steady credit positioning heading into 2026.
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