That’s the important take-way. A failed bid for a supermarket chain doesn’t matter much in the overall scheme of things: but that’s not the only type of investment at stake. Passing swiftly to my own field: much of the next wave of finance for the new energy infrastructure that is required – for the LNG that will reduce our dependency on Russian gas, and for the new power plants we need quite urgently – was expected to come from sovereign petro-funds such as the Qatari’s.
Now if an established retailer (tremendous cash-flow + asset-base) doesn’t support the required proportion of debt, how much less do unbuilt energy assets ? We saw the complete collapse of the project finance sector, and with it new power-plant building, in the wake of the Enron fiasco and downtick in
A good many easy assumptions are going to take a battering in the coming months and years. Meanwhile, Ruth Kelly pins her hopes on biofuels, and if we don't freeze we shall starve …