Institutional Investment in Infrastructure in Emerging Markets and Developing Economies

Inderst, Georg and Stewart, Fiona (2014): Institutional Investment in Infrastructure in Emerging Markets and Developing Economies. Published in: PPIAF Publication (March 2014)

Abstract

This study discusses the role of institutional investors in financing infrastructure in emerging markets and developing economies (EMDEs). It analyzes the present level of involvement as well as the future investment potential of new financing sources such as public and private pension funds, insurance companies, and sovereign wealth funds. Current investment volumes are still low, but interesting, practical examples can be found in a range of countries and projects. International and domestic investors apply a variety of investment approaches in developing countries, using different equity, debt and fund instruments.

This overview can yield some lessons for policy makers and investors. There are (more or less) favorable pre-conditions for successful private-investor involvement, and different models work in different situations, depending on the development stage and the institutional environment. Four types of “leadership models” are therefore described for international and/or domestic investors seeking to spearhead infrastructure investment in EMDEs.

• Item Type: MPRA Paper
• Language: English
• Keywords: Infrastructure investment; institutional investors; pension funds; emerging markets; developing countries; PPP
• Subjects: G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets; G - Financial Economics > G1 - General Financial Markets > G18 - Government Policy and Regulation; G - Financial Economics > G2 - Financial Institutions and Services > G22 - Insurance ; Insurance Companies ; Actuarial Studies; G - Financial Economics > G2 - Financial Institutions and Services > G23 - Non-bank Financial Institutions ; Financial Instruments ; Institutional Investors; G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation; H - Public Economics > H5 - National Government Expenditures and Related Policies > H54 - Infrastructures ; Other Public Investment and Capital Stock; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J26 - Retirement ; Retirement Policies

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