This rapid desk based study was undertaken to provide a summary of
qualitative and quantitative analyses of DFID’s work in the
infrastructure sector in comparison with other established donors, and
to present a global overview of bilateral and multilateral agencies’
investment strategies in the infrastructure sector. This report
summarises data from the study completed.
Aspirations for sustainable economic and social development are fuelling
the demand for infrastructure across developing countries. Availability
and reliability of infrastructure services is critical to economic
growth and the establishment of firms that are competitive in domestic
and international markets. For example, better transport infrastructure
improves access to critical services like healthcare, education and
provides access to markets for agricultural and industrial producers.
Moreover, in recent time, public spending on infrastructure has proven
to be a powerful countercyclical instrument to withstand recessions as
shown during the 2008 global crisis.
Despite the wide range of benefits from investing in infrastructure, the
sector remains severely underfunded in developing countries, especially
those classified by the OECD as least developed or fragile states. The
current infrastructure gap is estimated at $1 trillion in low- and
middle-income countries and the demand for infrastructure continues to
increase as growth and economic development requires expansion of
physical infrastructure and services to facilitate increased output and
absorb more people (Bhattacharya et al. 2012).
At present, approximately two thirds of infrastructure investment across
emerging markets and low-income countries is financed by domestic
government budgets, 20-30% by the private sector and the remaining 8-12%
by ODA, mainly from Multilateral Development Banks (Bhattacharya et al.
2012). Aid continues to play an important role in providing capital
finance for sectors for which private finance cannot be mobilised, and
in mobilising other sources of finance from both the private and public
This report has been produced by IMC Worldwide for Evidence on Demand
with the assistance of the UK Department for International Development
(DFID) contracted through the Climate, Environment, Infrastructure and
Livelihoods Professional Evidence and Applied Knowledge Services (CEIL
PEAKS) programme, jointly managed by HTSPE Limited and IMC Worldwide
Cisse, A.; Landais, A. Report summary: Review of infrastructure funding. Evidence on Demand, UK (2014) 15 pp. [DOI: http://dx.doi.org/10.12774/eod_hd.february2014.cisse_landais]