Financing Infrastructure Projects Research Articles

Position paper: public policy implications in publicly funded infrastructure projects

PurposeThis essay contributes to the ongoing exposition of a project management-focused understanding of “public policy” implementation. Distinct from previous studies that take a predominantly administrative sciences perspective, the delivery and implementation of publicly funded infrastructure projects as an instrument of public policy is explored through the lens of legal frameworks.Design/methodology/approachWe adopt the explanation-building review approach to provide descriptions and explanations of the relevant enablers and context necessary for the successful delivery and implementation of publicly funded infrastructure projects.FindingsThe ambiguity associated with public policy is more likely to hinder than facilitate the use of publicly funded infrastructure projects as preferred instruments of choice for implementing public policy.Originality/valueDespite substantial interest among academics and practitioners in utilising projects as tools for public policy implementation, thorough discussions on the legal complexities inherent in these projects remain scarce.

Building a sustainable environment in EU countries: the critical role of infrastructure investments and institutional quality

ABSTRACT The literature on the intersection of environment and economic growth is extensive, and emerging research emphasizes additional variables that affect both domains. It is well known that institutional quality enhances environmental quality because institutions affect environmental quality and economic growth through regulatory policies. Moreover, infrastructure investment is a critical driver of growth and environmental improvement, providing the necessary foundation for change. This research contributes to the literature by examining the dynamic interaction between ecological footprint, infrastructure investment, institutional quality, and economic growth using the Environmental Kuznets Curve hypothesis for the 10 European Union countries with the highest levels of infrastructure investment from 1996 to 2020 to highlight how infrastructure and institutional quality affect environmental outcomes differently across countries. It finds long-run relationships among the variables in the Czech Republic, Finland, France, Germany, Hungary, Italy, Norway, Slovakia, Sweden, and Switzerland. The findings confirm the cointegration by confirming the EKC hypothesis for the panel and particularly for Finland, France, Norway, Slovakia, and Sweden. The study observes that increased infrastructure investments reduce the ecological footprint in Germany and Sweden but increase the ecological footprint in the Czech Republic and France. In Sweden, higher institutional quality significantly reduces the ecological footprint, suggesting that improvements in institutional quality are associated with a lower ecological footprint. These results provide a new perspective on the policy revisions required to achieve net zero emissions under the Paris Climate Agreement, emphasizing the need to integrate green finance into privately financed infrastructure projects.

Branch differentiation of financial mechanisms of enterprise restructuring

In the paper, the financial mechanism of enterprise restructuring is interpreted as a complex process, the object of comprehensive analysis, clear planning, effective implementation, the implementation of which allows enterprises to restore financial stability, increase competitiveness and ensure sustainable development in the long term. It has been proven that the general principles of the functioning of the financial restructuring mechanism are: transparent business conduct, openness in communication, mutual benefit, reaching consensus, analysis of all aspects of activity, integration of various measures, realistic goals, financial flexibility, constant monitoring, reporting to stakeholders, innovativeness, proactivity , flexibility and operational adaptation, alternative, optimality, etc. Adherence to the specified principles ensures the successful implementation of financial restructuring, increases trust in the enterprise and contributes to achieving its financial stability. It is shown that the sectoral differentiation of financial mechanisms of enterprise restructuring allows taking into account the specifics of each industry, ensuring effective management of financial risks and optimization of resources. Successful restructuring requires an individual approach that takes into account the unique needs and operating conditions of each enterprise. Based on the results of summarizing the experience of the functioning of financial mechanisms in various branches of the national economy, it was established that they differ in various aspects of restructuring, which can be of the following nature: adaptive, structural, structural-adaptive, integrative, security-oriented, reengineering of business processes. General financial instruments that can be used in all branches of the national economy are substantiated - state financing programs through the use of state grants, subsidies and credit programs to support restructuring measures, as well as public-private partnerships based on the involvement of private investors for joint financing of infrastructure projects.

Financing infrastructure projects: a review of definitional issues and thematic areas

The purpose of the article is to identify current problems and thematic areas of financing infrastructure projects. To do this, both a systematization of approaches is carried out on the basis of thematic analysis and a review of Russian and foreign sources is done. A methodological plurality of definitions of the main categories was discovered. Inductively identified thematic areas of research cover: general trends in the development of types of economic infrastructure, microanalysis of the creation of specific infrastructure facilities and local needs for infrastructure development, local economic impact of individual types of infrastructure, cross-sectoral effects of infrastructure development, integration aspects of the creation of infrastructure facilities, infrastructure in the context of sustainable development, features of instruments and forms of financing infrastructure projects, infrastructure facilities as a separate class of investment assets.

A STUDY ON IMPACT OF FOREIGN DIRECT INVESTMENT ON BALANCE OF PAYMENTS

Foreign Direct Investment (FDI) exerts a multifaceted influence on a country's Balance of Payments (BOP), encompassing both the capital and current accounts. In the capital account, FDI inflows represent crucial long-term investments by foreign entities into domestic assets, spanning from establishing new ventures to acquiring existing businesses or funding infrastructure projects. These inflows augment the country's capital base, providing essential funding for development endeavors, particularly vital for emerging economies. Additionally, FDI facilitates technology transfer and managerial expertise, fostering innovation and enhancing productivity. Consequently, this bolsters the competitiveness of domestic industries, potentially leading to increased exports and improved trade balances. However, FDI outflows, in the form of profits, dividends, and royalties repatriated by foreign investors, impact the income account of the current BOP, constituting outflows. Furthermore, FDI's influence extends to exchange rates, where significant inflows may lead to currency appreciation, affecting trade dynamics.

Financing of infrastructure projects in territorial communities

The issues of financial support for the restoration of critical infrastructure are of utmost relevance during martial law, charac­terized by limited resources and capabilities and increased risks, and must be addressed compre­hensively at the state and local levels. The structural redistribution of local budget reve­nues and expenditures that occurs during martial law necessitates the search for effective ways to attract off-budget instruments for financial support of infrastructure in commu­nities. The aim of the article is to assess the financial capacities and opportunities for restoring the infrastructure of territorial com­mu­nities and to review promising financial mechanisms. The research is based on the hypothesis that it is necessary to develop combi­ned forms of financial support at the level of territorial communities with an emphasis on intensifying the involvement of international donors. The research methods were used, such as systematic and comparative analysis and synthesis, abstract and logical method, and logical generalization. The research is based on materials from government sources on the state and local budgets and on the basis of scientific works by Ukrainian scholars. The article has presented the opinions of scientists on the financial support essence and systematized its forms, methods and tools for direct finan­cial support of infrastructure projects in communities; revealed the possibilities and prospects for their application under martial law. The expe­diency of choosing combined forms of finan­cial support as those that balance the interests of the participants has been substan­tiated. Based on the state analysis of budgetary financing of infrastructure projects at the state and local levels, the availability of financial capacity in local budgets and the continuing trend of long-term projects by international donors at the national level were established. The main method of financial support for projects at the state level is loan programs from international financial institutions and foreign governments. The author has proposed the development of promising forms of financial support for the restoration of infrastructure projects in the form of loan and grants programs combination from the Nordic Environment Finance Corporation (NEFCO)

სპორტული ინფრასტრუქტურის განვითარების პოლიტიკა საქართველოში

Development of sports facilities is states responsibility, which is performed through the policy development, financing and implementation of various infrastructure projects. The improvement of sports infrastructure has a direct impact on people's health and well-being as well as their increased level of physical activity. The political, legal and economic aspects of sports infrastructure development in Georgia is discussed, the positive experience of foreign countries is evaluated and the shortcomings of the current policy is analyzed. The purpose of the article is to promote and help the public authorities and other interested parties to improve the existing policy for the construction and development of sports infrastructure. Doing so will increase public access to sports facilities, draw private investment, and ensure that budget funds allocated for this purpose are spent effectively.

Analisis Hukum Peran Bank Dalam Pembiayaan Proyek Infrastruktur di Indonesia

Infrastructure development in Indonesia can be a factor in the country's progress. because with adequate infrastructure, it can create economic growth and raise the quality of other sectors. Infrastructure development must be encouraged by various parties, one of which is banks. Banking has an important role in infrastructure development, because banks can help the government finance infrastructure projects by purchasing securities and through lending. The method used is normative legal research which focuses on laws and other policies related to the development and financing of infrastructure projects. As a result, in helping the government to finance infrastructure projects, banks provide products in the form of investment credit, syndicated credit, project financing, sharia financing and commercial credit. as the legal basis for financing infrastructure projects in Indonesia, Bank Indonesia issued and ratified PBI No. 23/7/PBI/2021 concerning Implementation of Payment System Infrastructure. With the large role of banks in financing infrastructure projects, it is hoped that they can support national development and encourage better growth in the infrastructure sector in the future. The government and banks need to continue to collaborate well in developing and improving a more effective and sustainable infrastructure project financing system, for the progress of the nation and state.

Appraising the Relationship Between Foreign Aid on Poverty Reduction in Nigeria

This paper examines the impact of foreign aid on economic growth and poverty reduction in Nigeria, using the Autoregressive Distributed Lag (ARDL) technique for regression analysis. The study employs time series data from 1986 to 2020 to analyze the long-run and short-run relationship between foreign aid, economic growth in Nigeria. The study adopted the combined theories of economic growth of the Harrod-Domar Model, the Two-Gap Model and the Three- Gap Model in theoretical outlook. The data set is used to test the long-term relationship as well as the short-term relationship. The results show that foreign aid has a positive and significant impact on economic growth and poverty reduction in Nigeria in both the long-run and short run. The study concludes that foreign aid can be an effective tool for promoting economic growth and poverty reduction in Nigeria. The study recommended that in targeting aid towards infrastructure development, foreign aid can be used to fund infrastructure projects like building and upgrading roads, ports, and power plants to create jobs and increase economic activity. It also recommended investing in education and healthcare, foreign aid can be used to support education and healthcare initiatives, to improve the overall health and well-being of the population and increase productivity Economic-growth, Foreign aid, Poverty, Nigeria, Population, Three-Gap Model Two-Gap Model

Financing of the armed forces of Ukraine under the conditions of the state of martial: the European integration vector

In the conditions of Russian aggression, the state of funding of the Armed Forces of Ukraine is important in view of the direct impact on the outcome of hostilities, the future of European countries, and on the further advancement of Ukraine through European integration.
 The basis of the administrative and legal regulation of the financing of the security and defense sector, including the Armed Forces, is: the Military Security Strategy of Ukraine, the National Security Strategy of Ukraine, the Law of Ukraine “On National Security of Ukraine”, annual laws “On the State Budget of Ukraine”.
 As a result of the conducted analysis, it was established that during 2016–2021, budget financing of the Ministry of Defense of Ukraine amounted to 2.1–2.4% of GDP or 2.5–2.9 billion dollars. the USA, while the amount of expenditures for similar purposes in the USA is 600–650 billion dollars, in China – 215–250 billion dollars, in the aggressor country – 70 billion dollars. Only in 2022, the specified volume of expenditures in Ukraine reached 21%, approximately the same amount is planned to be financed in 2024 (1,693 billion UAH).
 Among the main problems in the field of financing the Armed Forces, the following are highlighted: the budget of Ukraine is not a development budget; the amount of budget expenditures depends on charity, humanitarian and international technical assistance; inefficient structure of defense budget expenditures; lack of objective opportunities for growth of own income sources.
 These shortcomings became one of the reasons for Ukraine’s unpreparedness to protect its borders and significant losses during the Russian aggression during 2022-2023. This convinces of the need to comply with the current legislation of Ukraine, which combines the administrative-legal and financial- legal principles of regulation of the sphere of security and defense in Ukraine, including the Armed Forces. It is possible to achieve an increase in the volume of income sources in Ukraine through the modernization of the defense-industrial complex. Transfers from the EU remain important and necessary - this confirms the necessity of the European integration vector for the further development of our Another way to overcome the identified problems is the attraction of direct foreign investments for post-war reconstruction through the removal of regulatory levers. Along with state domestic financing and attracting private capital, Ukraine will need financing of infrastructure projects from relevant EU funds (as public funds), which requires maximum transparency, accountability and control.

"Islamic Sukuk Accreditation Requirements in Libya to Benefit from the Malaysian Experience"

This paper aimed to review the most important international experiences and practices of the role played by Islamic Sukuk in financing infrastructure projects. Given the development and spread of this Islamic finance industry by increasing global and local offerings (during the period 2016-2021), in addition to presenting the successful global experiences in Sukuk issuances that achieve economy maximizing (Malaysia, UAE, Saudi Arabia), and knowing their prospects in Libya. The descriptive-analytical approach was adopted in this study because of its suitability to the nature and objectives of the research. The paper reached several conclusions, including that Islamic Sukuk played a prominent role in providing funding for massive developmental projects, and its flexibility has made it a leading position among various funding sources.Among the leading global experiences is the Malaysian experience, which has an average trading volume of around 50% of the Islamic capital market and an accumulated basis for the period from 2001 to 2021. Malaysia has continued to maintain ite firet position in Islamic Sukuk issuances with a combined local and international issuance of about $877 billion. Through this research paper, it became clear that Islamic Sukuk is one of the most important financial instruments compatible with Islamic law and widely spread in international financial markets. It can have a significant impact on the development process in Libya after the issuance of Law No.4 for the year 2016 on Islamic Sukuk. Despite the positive outlook for Islamic Sukuk, it faces many difficulties and challenges (legal, economic, technical, regulatory,...,etc.) . There are also many areas that need to be provided to help the success, growth and development of the lslamic Sukuk issuance process in Libya.

БЕЗПЕКО-ОРІЄНТОВАНЕ УПРАВЛІННЯ РЕСУРСАМИ В РЕАЛІЗАЦІЇ ІНФРАСТРУКТУРНИХ ПРОЄКТІВ

The purpose of the article is to research safety-oriented resource management in the implementation of infrastructure projects. The main requirements of the modern development of infrastructure projects and possible forms of financing, taking into account the complexity of the project, are highlighted. Ukraine has a high level of investment attractiveness due to its favorable geographical location, which modernization of infrastructure, compared to the leading countries of the world, is relevant in Ukraine. However, some spheres and regions of Ukraine have a very low level of infrastructure development or its complete absence. This is explained by the fact that the implementation of infrastructure projects in Ukraine is a rather risky process. Safety-oriented management is inherent in large infrastructure projects, the life cycle of the product's use reaches decades. For example, the construction project of an airport, a stadium, an oil depot goes back several decades. In project management, the priority is to focus on value and safety. New approaches to project safety management differ from risk management and quality management. Based on the study of statistical materials, the process of financing infrastructure projects for the period of 2023–2024 was analyzed. Attention is paid in detail to the total income and expenses of communities. The economic development of the state is directly related to the financing of infrastructure projects aimed at modernization and restoration, taking into account modern Ukrainian realities. The purpose of this study is to improve the process of managing the efficiency of infrastructure projects in the post-war period with its practical application. Assessing the current state of security-oriented resource management in the implementation of infrastructure projects determines the relevance of the study and its necessity in wartime conditions. A SWOT analysis of infrastructure projects was conducted. The scheme of the organization of project financing of infrastructure projects is proposed, which makes it possible to forecast all possible options for the development of infrastructure projects, as well as the stages of implementation of infrastructure projects are considered.

Financing infrastructure projects during martial law: corruption challenges and transparency mechanisms

Financing infrastructure projects during martial law: corruption challenges and transparency mechanisms

Project finance through Infrastructure Investment Trust: Legal and regulatory analysis

Structured finance, private equity, and public offerings drive a new global real estate and infrastructure age. Given the necessity for increased capital in funding infrastructure projects, a range of equity instruments can be employed to attract institutional investors in both advanced and emerging economies. In recent years, infrastructure sectors, including roads, highways, ports, power, and real estate, have seen increased financial demand and investment trusts have become critical in meeting India’s infrastructural needs. Especially in India, Infrastructure Investment Trusts (InvITs) play a vital role in establishing a well-balanced risk management system, which is essential for addressing infrastructure needs and fulfilling the financial requirements of developers. InvITs were established under the Securities and Exchange Board of India (SEBI) Regulations, 2014, to attract global and local long-term investments for public-private partnership (PPP) and infrastructure projects and to fill gaps in traditional project financing. Despite initial expectations, few projects have utilized this structure since its inception. The author’s review, incorporating doctrinal legal research, analyzes the regulatory framework surrounding InvITs in India. The paper contributes to the literature, emphasizing evidence of India’s programmatic approach to enhancing infrastructure financing and showcasing structural and financial reforms in InvITs governance as integral components of the nation’s strategy.

ФОРМЫ ГОСУДАРСТВЕННОГО УЧАСТИЯ ПРИ РЕАЛИЗАЦИИ ИНФРАСТРУКТУРНЫХ ИНВЕСТИЦИОННЫХ ПРОЕКТОВ

This article presents and describes the forms and methods of state participation in the financing and implementation of infrastructure projects, mentions some organizations and companies created to stimulate the inflow of private investment in projects, mostly by subsidizing interest rates when financing such projects, and also suggests some additional ways to stimulate financing for the modernization of current and construction of new infrastructure in various regions of the Russian Federation. The relevance of the work is that it is necessary to stimulate the development of infrastructure in various regions of the country, and not in all cases it is possible to do without state support, therefore it is important to understand what forms of support exist at the moment and it is also necessary to propose and create new forms, especially in the current crisis.

Sustainable Infrastructure Development in The IKN Region (Nusantara Capital): Simulation of The Smart Self-Sustaining Urban Center Area Development

Embarking on the quest for a sustainable urban future, this research immerses itself in the vibrant landscape of "Sustainable Infrastructure Development in the IKN Region (Nusantara Capital)." This study investigates the financial viability and economic attractiveness of the Five City project, focusing on efficient infrastructure management for sustainable settlement development. The core facility comprises four vertical residential towers with supporting amenities. The research aims to evaluate the project''s feasibility over a 25-year investment period through comprehensive financial analyses.The research employs a structured approach, encompassing regulatory analysis, stakeholder identification, financial capability analysis, and risk management. Parameters such as Net Present Value (NPV), Benefit/Cost Ratio (BCR), Internal Rate of Return (IRR), and Payback Period are used for economic feasibility analysis. The study employs a detailed Risk Breakdown Structure (RBS) and Risk Register for risk management. The results collectively highlight the project''s promising economic outlook and proactive risk management approach.In conclusion, the study underscores the feasibility of the Five City project as a sound venture in project financing. The findings contribute valuable insights into infrastructure development, project finance, and risk management, providing a blueprint for sustainable housing projects in the Nusantara Capital Region. Recommendations include continuous monitoring, transparent communication, and adaptability for long-term success.

Пространственный анализ инфраструктурных эффектов экономической динамики регионов России

Sustainable development of the transport system ensures the economic space unity, integrity and national security. The study hypothesises that infrastructure as an essential factor of well-being brings economic benefits to a region and determines its socio-economic growth, with effects extending beyond the region itself. Econometric and geoinformation methods were combined to conduct a spatial analysis of the impact of the capital-labour ratio, transport and telecommunication infrastructure on gross regional product per capita and labour productivity in industry, as well as to assess direct and spillover effects. The estimates revealed a statistically significant positive spillover effect of the capital-labour ratio, railway and telecommunication development indices on economic development. At the same time, negative direct effects of railway infrastructure indices on industry indicate that, in conditions of concentration of economic activity, the increasing transport system load does not correspond to its physical growth rates under heavy wear. This conclusion is confirmed by a negative spillover effect of the capital-labour ratio on labour productivity in industry in two model specifications with a direct positive effect. Providing access to networks and information resources for enterprises and population, as well as increasing technological capabilities and the speed of interaction between economic entities cause positive externalities of telecommunications for economy. Telecommunication infrastructure is a factor of industrial production growth, however, its negative spillover effects show that regions surrounded by regions with high mobile penetration rate are experiencing a slowdown in labour productivity in industry. The obtained estimates and the spatial correlation between gross regional product per capita and labour productivity in industry should be considered in programmes for financing infrastructure projects.

СОВЕРШЕНСТВОВАНИЕ РАЗВИТИЯ ТУРИСТСКОЙ ИНФРАСТРУКТУРЫ РЕГИОНА

The article is devoted to improving the development of tourism infrastructure in the region. The purpose of the study is to analyze the development of tourism infrastructure in the regions, in particular collective accommodation facilities, to identify the advantages and disadvantages of its development, and to trace its overall dynamics. An analysis of literary sources on the research issues in recent years was carried out. The methodological basis was the methods of comparative and calculation-analytical analyses, including the collection and analysis of the main indicators of the development of tourism infrastructure. A SWOT analysis of factors influencing the effectiveness of the development of tourism infrastructure in the regions of the Russian Federation was carried out. Based on the results of the analysis, potential opportunities and threats to its development were identified. Strengths and opportunities were found to outweigh weaknesses and threats. The mechanism for financing the development of tourism infrastructure is described and its effectiveness is analyzed. Recommendations were given to improve the mechanism for financing infrastructure projects, which include optimizing the number of projects in favor of their high-quality execution; establishing high-quality control over budget investments; development of tax breaks for participants in infrastructure projects; the use of PPP mechanisms, allowing businesses to share costs and risks with the state.

Світовий досвід державно-приватного партнерства для фінансування соціального житла

In the current socio-economic environment, the issue of providing vulnerable population with affordable and accessible housing has become acute, requiring the public authorities to invest heavily in this area. This problem is relevant not only for Ukraine, where many residential buildings were destroyed as a result of military aggression, but also in other European countries, as quarantine restrictions have caused significant damage to their economies. Another reason for the growing demand for social housing is urbanization, migration, and growing social inequality. The solution to this problem is complicated by the fact that the growing demand for social housing increases the necessary costs for territorial communities, which they cannot always fully cover with budget revenues. On the other hand, private investors need a return on their investments, so they cannot finance social housing projects on their own. As a result, the public-private partnership model has become one of the ways to finance social housing. The purpose of the article is to analyze various public-private partnership mechanisms to provide financing for the construction and allocation of social housing. Since 1980s, public private partnership (PPP) is gaining global popularity as a viable alternative to public funding for building and financing infrastructure projects. PPP is a means to effectively deliver projects in the public sector because it emerges against the backdrop of financial constraints and management capacity in the public sector to support largescale infrastructure projects. PPP not merely means a way to accomplish financial problems by bringing private capital, but it also aims to bring private sector efficiency and best practices in delivering infrastructure. Although, focus of the current debates is primarily on economic infrastructure, but investment on social infrastructure has received surprisingly little attention and it is predicted to continue growing. Governments have a central role in policies and regulations to provide a transparent and fair 'investment field', as well as providing payments to private parties. In investing, the private sector actually requires stability, predictability and a framework that supports their investment in social infrastructure. Meanwhile, the private sector has a role to provide expertise in building social infrastructure efficiently and has added value in innovation. It is recommended to implement a modified PPP model in Ukraine to include international public and private partners as financial donors to compensate for lack of the national budget resources at the moment.

China’s Finance in Tanzania

ABSTRACT This article provides a detailed analysis of official finances from China to Tanzania with special attention to the question of Tanzania’s foreign finances policy. The findings reveal that Tanzania like much of sub-Saharan Africa, has an infrastructure gap and Chinese finances are largely used to fund infrastructure projects. However, majority of the funds are loans. In addition, Chinese firms are the ones implementing the projects, and much of the raw material and labor is imported from China. All these calls for Tanzania to institute a coherent foreign finances policy that ensures the country fully benefits from these finances.