Funding For Infrastructure Projects And Its Impact On Sustainable Inclusive Development

1853 Words May 17th, 2016 8 Pages
The public sector worldwide is expecting private capital, especially institutional investors, to provide significant funding for infrastructure projects. The match is – in theory – aligned as institutional investors are faced with a low interest rate environment and infrastructure projects provide them with a predictable, inflation-adjusted cash flow that has a low correlation with existing investment returns. Moreover, securing institutional finance is of critical growing import, given the reduced amount of long-term bank debt available for infrastructure projects with the adoption of Basel III regulations for improving the resiliency of banks and banking systems.

However, mobilising private capital requires a paradigm shift aligned with institutional investment mandates and investment criteria. Working together, the private and public sectors need to proactively create an effective and efficient project development ecosystem that results in the significant scaling up of pipelines of bankable and investable infrastructure projects.

If we are to be successful in increasing the number of infrastructure projects and their impact in advancing sustainable inclusive development, wholesale changes are needed in mindset, process, policies, programmes, and metrics. We need to restructure and streamline project development processes, optimise the roles of all participants and innovate with risk-mitigating solutions that deliver development impact, thereby securing long-term…

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