Renewal Gap

A renewal funding gap (also asset renewal gap) is the difference between;

a) the amount of funds required annually for the renewal of an asset class over the useful life of that asset class, and;
b) the amount of funds currently being spent on renewing the asset class annually.

In other words it is the difference between what an organisation spends on renewing its assets and what it needs to spend to maintain the current average condition and service level of its assets.

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Where a renewal funding gap exists, the average condition of the asset class in question will deteriorate over time.

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External Links & References

  1. MAV Renewal Gap Model
  2. Google Search
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