M&A Year in Review 2023 brochure - Flipbook - Page 84
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IIJA and IRA
Following the acceleration of the US$1.25 trillion in U.S. federal spending provided under the Infrastructure
Investment and Jobs Act of 2021 (IIJA) and the implementation within the United States of tax credits and
other fiscal subsidies for clean energy investments enacted under the Inflation Reduction Act of 2022
(IRA), we expect the IIJA and IRA to provide significant fiscal stimulus and spur private investment in the
United States during 2024 and beyond.
IIJA
IRA
The IIJA provides for more than US$1.25 trillion in
federal spending over the five-year period from
2021 to 2026 across a wide swath of federal
infrastructure investments. Combined with the tax
incentives and spending provided under the IRA, the
significant fiscal stimulus provided by the IIJA will
continue to provide a tailwind for U.S. infrastructure
investments in 2024, both in traditional infrastructure
areas like roads, bridges, airports, and water
infrastructure, but also in broadband deployment,
hydrogen production, EV charging, cybersecurity,
battery technology, and critical minerals supply
chain. We expect these subsidies to continue to spur
private investments in these areas as well,
encouraging continued growth in M&A investment
in these sectors throughout 2024.
We expect the economic impact of the IRA to be
even more significant than that of the IIJA, in
particular for clean energy investments, over the
course of 2024 and beyond. Heralded as the “third
energy revolution,” it is believed that the tax and
other federal incentives included within the IRA will
spur approximately US$3 trillion in clean energy
technology investment in the United States by 2032,
and US$11 trillion of investment in this area by 2050.
We expect the IIJA and IRA to
provide significant fiscal stimulus
and spur private investment in
the United States during 2024
and beyond.”
In addition to the tax incentives, the IRA also
provides more than US$300 billion in loan authority
for various clean energy investments and US$10
billion in competitive tax credits – available by
application and award – for U.S. clean energy
manufacturing projects.
During 2024, we expect the Biden Administration
to accelerate its efforts to clarify the rules underlying
IRA incentives, thereby facilitating an increase in
the number and significance of deals to capture the
associated benefits in well-established sectors, such
as wind, solar generation, and biofuels production,
as well as in hydrogen production, advanced nuclear
generation, carbon capture and sequestration, and
U.S. manufacturing of solar cells and wafers, battery
cells and modules, wind turbines, and critical
minerals mining and processing.
