Digital Financing, Revenue, and Business Models for Smart Infrastructure Assets

What is Smart Infrastructure Finance?

Professor Peter Adriaens explains how financial innovations based on digital twins of infrastructure can be used to fund and finance resilient future-ready projects.

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Efficient Financing for Intelligent Infrastructure

The Center for Digital Asset Finance (CDAF) at the University of Michigan (U-M) integrates digital twins of smart infrastructure with financial innovations such as fintech to solve financing problems for critical societal infrastructure services such as energy, water, transportation and housing, along with digital infrastructures such as networks and communications services.

CDAF specifically focuses on integrating Internet of Things (IoT) enabled data-streams from water, transportation, housing, energy and waste systems with financial models.

We seek to address investment barriers such as cost of financing, market adoption and cost performance uncertainties.

Megatrends Drive Motivation

Digital delivery of infrastructure assets and services

Infrastructure Redefined

Automation and digitalization have expanded infrastructure value chains to include information architecture that serves to operate, maintain, and create value-added services for resilience of the underlying intelligent asset.

Digital Business Models

The integration of IoT in the design, construction and operation of smart infrastructure systems, is resulting in new data-driven business and revenue models, including transformation of CAPEX to SaaS-like OPEX. projects.

Financial Innovation

Smart infrastructure can be financed beyond traditional debt and equity investments to include IoT-informed bonds, risk transfer models, data securitization, and tokenization of ESG and performance data.

ESG and Green Premiums in Bond Pricing

Building models and testing the impact of ESG disclosures and green bond issues across thematic areas and industry sectors on pricing impacts in the primary and secondary markets using statistical models.

Water Risk Pricing in Equities & Indexes

Water is an economic production factor for corporations in all sectors. We develop operational CRM and capital markets indicators to price water risk in share price behavior and corporate financial accounting.

Infrastructure Asset Tokenization

Financing is tied to understanding the performance risk of the project. Asset tokenization provides transparency, liquidity, integration of ESG metrics and engagement of retail and efficient investors.

Demand-Driven Harbor Financing

The Nation's water-based logistics is governed by Congressional appropriation. We sought to reinventing financing mechanisms using demand-driven (infrastructure bank-type) opportunity cost funding structures.

Sustainable Agriculture Financing

Agricultural impact on nutrient runoff and climate change is significant. Instead of government subsidies, this project develops asset pricing models to engage the capital markets to drive behavioral change.

Financial Technology for Industrial Renewal

The emergence of connected infrastructures requires understanding of financial network maps across the ecosystem of enterprises engaged in renewal. Multi-asset financial models (MARFs) are required.

Business and Financing Models for Connected Vehicle Integration

The scaled deployment of connected vehicles will require new business (revenue) and financing models under innovative data-driven P3 contracts that leverage public infrastructure assets.

Infrastructure Performance Management

Smart (cyber-physical) infrastructures are data-generating assets with a capacity to enable operational efficiencies, reduce cost of financing by improving financial liquidity and transparency, and unlock new cash flows. Keeping track of this information will require blockchain systems.

Exploring how financial technologies enable next generation affordable infrastructure delivery

Master of Engineering in Smart Infrastructure Finance

In 2023, the Master of Engineering (MEng) degree in Smart Infrastructure Finance will be a highly immersive academic experience that is open to students from different academic backgrounds. The program not only provides a curriculum oriented towards data-driven finance and business models, but also offers students invaluable professional experience in the financial services, data management, and smart infrastructure industries.

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