Financing infrastructure projects

Abstract

Infrastructure is of great importance to the development and economic growth of communities. Due to the increased demand on sophisticated infrastructure, governments' budgets are not anymore able to satisfy this growing need. The role of the private sector in infrastructure finance is essential, and the amount of private investments in infrastructure projects has been dramatically increasing over the last few years. Public Private Partnerships, Private Finance Initiatives, and Alternative Service Delivery methods are becoming the trends for procuring infrastructure, and by relying on Project Finance, the private sector is more willing to be involved in these projects. These methods, combined with effective risk management techniques, would provide a solution to the decreasing governments' budget. Meanwhile, the construction experience, operation efficiency, and financial capabilities of the private sector may be a way to relieve governments from the burden of infrastructure development.