How to Foster Investments in Long-Term Assets such as Infrastructure

Abstract

Mobilising private sector funding is essential in bridging the infrastructure funding gap. This can be done by appropriate regulation, targeted public financial support, and active involvement by institutional investors. Creating an appropriate policy framework and lifting regulatory constraints on long-term investments will foster financial stability of retirement savings systems and enable the development of strategic infrastructure projects that contribute to long-term growth. As capital markets and bank funding have dried up as sources of infrastructure financing after the global financial crisis, finding alternative long-term debt sources is critical. Private infrastructure financing can be promoted by targeted public measures and by building an infrastructure management culture amongst asset managers. Infrastructure investments also require long-term policy planning, with long-term strategic policy frameworks that exceed political cycles and are built on wide political consensus. Stable and accessible programmes of infrastructure projects and public-private partnerships (PPPs) are key in attracting private sector investors, complemented by adequate regulation.