This review of the barriers to increasing private finance in infrastructure investment in Sub Saharan Africa (SSA) and South Asia (SA) was commissioned by DFID. The research questions concerned the constraints in the supply of projects able to attract private finance and the barriers in the financial markets preventing projects from acquiring private finance. Two hundred and ninety two documents were reviewed. A significant proportion of the documents were produced by, or in association with, international development agencies, multilateral development banks (MDBs), and development finance institutions (DFIs).
The research questions can be summarised as follows:
Project supply constraints to attracting private finance. What are the factors restricting the supply of projects able to attract private finance? Upstream constraints and downstream constraints are examined. Upstream constraints include the enabling environment, political and regulatory risk, and economic/ financial issues such as the macroeconomic conditions. Downstream constraints comprise issues related to project development capacity. The policy recommendations to address the barriers identified are then assessed.
Financial market constraints to attracting private finance. What are the constraints in the financial markets preventing projects from attracting private finance? The sources of private finance available to projects are identified and the policy and regulatory barriers preventing the scale up of these financial instruments are examined. The policy recommendations to address the barriers identified are then assessed.
Regional infrastructure. How do the responses to the above questions differ with reference to regional infrastructure?
Cambridge Economic Policy Associates (CEPA). Mobilising finance for infrastructure in Sub-Saharan Africa & South Asia: Literature review. Cambridge Economic Policy Associates (CEPA), London, UK (2015) 62 pp.