While it seems US politicians rarely see eye-to-eye on anything, the fact that America’s aging infrastructure needs attention is one issue that has attracted clear bipartisan agreement. Yet, it’s unclear who is going to foot the bill for the sweeping improvements that seem to be needed. Wilson Magee, director of global real estate and infrastructure securities, Franklin Real Asset Advisors, and portfolio manager, Franklin Global Listed Infrastructure Fund, builds a case for listed infrastructure companies providing the capital and expertise needed to get the job done. He also explains why he thinks infrastructure projects around the world will likely require more private funding.

In the US Congress, there seems to be bipartisan support for improving the dire state of the nation’s aging infrastructure. It was a main talking point during the 2016 US presidential election. That same year, the American Society of Civil Engineers gave US infrastructure a “D+” overall grade.

In February of this year, US President Donald Trump unveiled a $1.5 trillion plan to rebuild America’s roads, bridges, airports and water-treatment facilities. The plan calls for federal spending of $200 billion over the next 10 years and for state and local governments and the private sector to fund the remaining $1.3 trillion.

However, there has been some disagreement on who should pick up the tab for the bulk of the proposed infrastructure improvements. Many Democrats say Trump’s plan puts too much pressure on state and local government budgets and are calling for $1 trillion in federal spending. Yet Republican deficit hawks are balking at an increase in federal spending after the recent passage of the tax reform plan and 2019 fiscal year budget.

Given these budget constraints at the local, state and federal levels, we think the private sector will likely play a crucial role in Trump’s infrastructure plan. In our view, listed infrastructure companies, such as airport, toll road and water-treatment operators, are likely to provide both their capital and their operational expertise.

That said, we don’t expect to see an infrastructure bill moving swiftly through the US Congress in the near term. Immigration reform seems to be the current focus in the House and Senate.

Whether a US infrastructure bill passes or not, infrastructure spending is ongoing. For example, we’ve seen US power utilities continue to invest in growth initiatives that favor the transition to cleaner forms of energy, such as natural gas and renewables. In our view, the increasing use of renewables will help support further investments in power transmission grids, both in the United States and throughout the world.