Financing Infrastructure Projects Research Articles

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.

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.

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.

Chinese Loan to Africa in the lens of Pragmatism Economics

This paper examined the reasons behind China’s decision to provide loans to African states, a group that had been traditionally been considered not creditworthy by MDBs. Utilizing a descriptive-explorative research method, primary to secondary data ranged from 1999 to 2022, and the framework of economic pragmatism, this paper analyzed and found some pragmatic implications. The findings concluded that China’s lending strategy was mostly motivated by a pragmatic approach aimed at gaining early access to African markets, securing vital natural resources, assisting Chinese corporations, and creating economic dependence. China’s loans were used to fund infrastructure projects, reducing logistics costs for Chinese businesses and diversifying foreign exchange reserves. This paper posited that China’s policy was driven by empirical facts, adaptiveness to global economic conditions, and a focus on concrete economic benefits, such as increasing imports from China and gaining access to natural resources. Therefore, this paper describes China’s efforts to strengthen its influence and obtain tangible economic advantages through its lending practices in Africa Keywords: Africa, China, Development Loan, Economic Gains, Political-Economy

Understanding local government debt financing of infrastructure projects in China: Evidence based on accounting data from local government financing vehicles

This study develops an analytical framework to investigate the complex relationship between local government debt issuing for infrastructure financing, state control, land finance, and development activities in the private sector in China. Using local government financing vehicles’ accounting data, we find that local governments are working creatively to meet infrastructure development targets handed down by the central government. Moreover, local government financing vehicles became more responsive to development activities from the private sector in their debt-issuing decisions after the regulations of local government debt issuing in 2013/14. By modelling the effect of three distinct forces, i.e., the central government, local governments, and the market, in one unified framework, our study provides reliable evidence of how infrastructure financing works in China. Our research extends the studies of land finance into the infrastructure development domain. The findings are also helpful for studies on China's land use policy under its leasehold land right system, particularly the impacts of different land planning uses on infrastructure development.

THE DIRECTIONS OF ACTIVITIES OF BRICS NEW DEVELOPMENT BANK IN FINANCING INFRASTRUCTURE PROJECTS IN DEVELOPING ECONOMIES

The purpose of the research is to examine the role of the BRICS New Development Bank (NDB) in financing infrastructure projects in developing economies. The methodology of the research - the study uses a comprehensive approach combining quantitative analysis of financial data, qualitative assessment of project outcomes, and review of collaborative efforts with other multilateral institutions. The practical importance of the research is to clarify the practical relevance of IDB financing strategies by shedding light on how they affect economic growth and sustainability. The results of the research - this study also confirms that IDB financing has a transformative effect, demonstrates positive results in economic growth, and adheres to project sustainability and sustainability goals. The originality and scientific novelty of the research - this study contributes to the academic discourse by offering a nuanced examination of the role of IDBs in infrastructure financing. In addition, the study provides new perspectives by examining the response of the IDB to the challenges posed by the COVID-19 pandemic, highlighting the need for digital infrastructure and healthcare development.

Appraising The Relationship Between Foreign Aid On Economic Growth 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.

Chinese Development Aid and Finance: Effective Soft Power Tool or Public Diplomacy Liability? A Spatial Study of Project Influence

China has risen to become a significant donor of foreign aid and assistance in recent years. As with other major donors, such economic flows in the provenance of China are tied to the latterʼs strategic aims. Specifically, the use of economic outlays as a tool of soft power and public diplomacy has been identified as a key motivation in Chinese disbursement decisions. However, studies examining the empirical success of Chinese foreign aid and assistance in acting as such have, so far, come to diverging conclusions. This study offers an investigation of the spatially diffused effects of infrastructure project sites tied to Chinese funding sources on local public opinion in Ecuador, a country that offers an interesting case showcasing the effects of the unfolding great power competition on local public opinion. We find, that controlling for socio-economic and ideological individual characteristics holding the potential to affect survey respondentsʼ views on China, project influence is significantly and negatively correlated with levels of trust in the Chinese government. These results suggest that the frequently mediatized negative local spillover effects of Chinese-funded or financed infrastructure projects make it unlikely for Chinaʼs foreign aid and assistance to achieve its envisioned purpose of furthering the countryʼs soft power and positive image beyond its borders.

The Political Economy of China's Local Debt

AbstractBy analysing the development and operation of local government bonds (LGBs), a new tool fashioned by the Chinese government to finance infrastructure projects, this article improves the understanding of the political economy of China's local debt. We find that the central government uses LGBs to intervene in local debt and pursue policy objectives, and designs a quota system to decide the bond issuing amount and the project selection. When calculating quotas, the central government prioritizes limiting financial risk and achieving national development goals. Local debt should match the fiscal capacity of local governments, and the projects should contribute to the sectors emphasized by the central government as important for national development, reflecting the centralization of central–local relations. However, LGBs hardly fix the problem of local debt, and the pressure to maintain economic growth by expanding infrastructure investment has pushed local debt to an alarming level.

Enhancing Economic Growth for the Achievement of Sustainable Development Goals through Digital Era Fundraising Schemes for Sustainable Community Development: A Policy Analysis from the Islamic Economic Perspective

This paper provides a policy analysis from the Islamic economic perspective on enhancing economic growth and achieving Sustainable Development Goals (SDGs) through digital era fundraising schemes for sustainable community development. It examines the role of zakat, sukuk, and waqf in contributing to specific SDGs in Indonesia. The study highlights the importance of inclusive and environmentally sustainable economic growth for sustainable development. It emphasizes the potential of digital era fundraising schemes in mobilizing resources and promoting sustainable development. The paper specifically explores the impact of zakat on poverty eradication and social welfare enhancement, sukuk in financing infrastructure projects and stimulating economic growth, and waqf in supporting education, healthcare, and community development. Using a qualitative research approach that includes literature review and policy analysis, the study evaluates existing policies and strategies related to digital era fundraising schemes in Indonesia. It assesses their effectiveness in achieving SDGs and identifies strengths and challenges in current policies. Based on this analysis, the paper presents policy recommendations to enhance the effectiveness of digital era fundraising schemes for sustainable community development. The recommendations advocate for comprehensive policy frameworks aligned with Islamic economic principles and the integration of digital technologies. They emphasize the importance of improving financial literacy and awareness to encourage active participation in fundraising efforts, fostering collaboration among stakeholders, and developing supportive regulatory frameworks. By implementing the proposed policy recommendations, Indonesia can harness the potential of digital era fundraising schemes to achieve specific SDGs. The paper concludes that a well-designed policy framework embracing Islamic economic principles, leveraging digital technologies, and promoting stakeholder collaboration will facilitate the effective utilization of zakat, sukuk, and waqf for enhancing economic growth and achieving sustainable development goals. Overall, this paper contributes to the understanding of how digital era fundraising schemes, guided by Islamic economic principles, can play a significant role in advancing economic growth and sustainable development. It provides policymakers, organizations, and practitioners with insights and recommendations to optimize the potential of these fundraising schemes in promoting sustainable community development and achieving SDGs in Indonesia.

SUKUK MURABAHAH: A MECHANISM TO FUND INFRASTRUCTURE PROJECTS IN NIGERIAN TERTIARY INSTITUTIONS

Developed countries have actively engaged in producing and providing infrastructural facilities at all levels of development. The demands for infrastructure investment in developing nations quickly attract the country’s attention for the operation of organizational structures and the management of societal needs (e.g roads, bridges, power, education, transport, health care services, communication, technology, and many other sectors). In this regard, countries worldwide are seeking a way to increase their economic flow via infrastructure. In Nigeria, financing education became a bottleneck as a result of the tertiary institutions in the country lacking infrastructure which in consequence affected the growth and development of the institutions towards producing qualified-minded trained students in almost all fields of study. Therefore, this paper is to conceptually investigate how Sukuk Murabahah can be used to fund infrastructure projects in Nigerian universities. The study concludes that Sukuk Murabahah will play a significant role in financing and uplifting the standard of Nigerian tertiary institutions and brings about national development. Therefore, the study recommends that promoters of Sukuk should create more awareness about its availability, security, and minimal risk so that the government at all levels and corporate entities can benefit from the service. Governments at all levels and corporate entities should be encouraged to patronize or adopt Sukuk as their financing option due to its features of providing social and economic benefits to the issuer. The existing legal and regulatory framework should always be conformed with and developed to remain unfailing with time and space.

Public–private partnerships and economic growth: a sectoral analysis from developing countries

Governments, particularly in developing countries, are continuously faced with the challenge of expanding infrastructure to keep up with population growth and rapid urbanisation. This challenge arises from the fact that public resources are strained as governments face high budget deficits and rising debt-to-GDP ratios. At the same time, development institutions alone have not succeeded in narrowing this financing gap. The constraints placed on the budgetary requirements of governments have shifted attention to public and private partnerships in financing infrastructure projects, which are at the heart of service delivery in developing countries. Whilst the use of Public–Private Partnership (PPPs) is a growing trend in developing countries, there is limited empirical studies that have assessed the impact of PPP investments on economic growth. This article, therefore, extends the limitations in the literature by investigating the effect of PPP sectoral investments on economic growth among 35 developing countries from 1997 to 2018 within the neoclassical growth framework. Using the system GMM estimation technique, we find aggregate PPP investment and energy investment to positively contribute to economic growth, which highlights the multiplier effect of energy in stimulating economic growth in developing economies. The policy implications of the findings are discussed.

Adaptable state-controlled market actors: Underwriters and investors in the market of local government bonds in China

Local government bonds (LGBs) have become the most important tool of the Chinese state for financing infrastructure projects. The underwriters and investors in LGBs are mostly commercial banks, with state actors holding the overwhelming majority of shares. We call these state-controlled market actors. This article investigates the role of state-controlled market actors in LGB issuance to extend the understanding of state actors and state–market relations in the financialisation of urban governance. The findings show that they underwrite and invest in LGBs to support the government's development objectives and make profits. They can hardly affect the government to create the terms and conditions of bonds to favour their financial interests, but they manage to make substantial profits. They follow the policy trends to identify LGBs as risk-free and reflexively change their investment priority towards the bonds. Due to the low interest rates, the banks mainly profit from bond trading in the secondary market and fiscal fund investment. There are preferential policies for LGB trading in the secondary market, and local governments deposit fiscal funds in the banks to motivate them to do LGB business. We argue that reflexively making investment decisions according to the policy environment and making profits by exploiting political resources represented by preferential policies and fiscal funds show the adaptability of the state-controlled market actors.

Taxation in the implementation of public-private partnership projects

Aim. The presented study aims to analyze the peculiarities of taxation in the implementation of projects using the mechanism of public-private partnership (PPP).Tasks. The author considers the forms and principles of PPP; analyzes the specifics of taxation in PPP; determines tax liabilities in the context of project implementation stages.Methods. This study uses general scientific research methods: analysis, synthesis, comparison, and generalization.Results. The essence of PPP is revealed. The author describes the basic principles and specific aspects of the implementation of projects based on PPP. Special tax conditions for the concessionaire and the private partner are analyzed in the context of taxes and tax obligations under the concession agreement and the PPP agreement are grouped to identify the distinctive features of the tax regime under PPP.Conclusions. In light of the trend of implementation of investment projects and infrastructure development facing insufficient investment in projects, PPP can be viewed as an effective tool. Attracting financing for infrastructure projects requires creating favorable conditions for investors, including state guarantees and tax incentives. In this regard, this study examines the peculiarities of taxation of organizations, in particular special project companies, in the implementation of projects using the PPP mechanism.

How value is enacted by public actors within urban development funding and the implications for levelling up in England

The aim of the article is to understand how public actors perform value and how this effects urban development. This article answers this by examining how value is enacted in urban development funding in England. Urban development funding from central to local government is a key source of financing for regeneration and infrastructure projects. Attending to how value is enacted reveals who shapes the underpinning rationale, which in turn influences how value is represented in decision-making and urban development projects. Building on the recent work in geography that questions the concept of value and drawing on performativity and diagrammatic thinking, this article argues that HM Treasury is central to how value is enacted and that the prevailing conception of value in urban development prioritises short-term, financial outcomes despite an awareness of the need to be sensitive to temporal and spatial concerns. The findings proceed from 24 in-depth interviews with senior civil servants, politicians, local government representatives and policy experts that took place during the summer of 2021. The article concludes by considering the implications for enacting value under the UK government’s Levelling up agenda.

Mathematical Models and Methods for Infrastructure Investments: A Critical Analysis of the Models and Methodologies for Infrastructure Investments, Proposed by EDHEC Business School and Moody’s

The work of seeking more appropriate models for infrastructure finance is critical due to the fact that there is a gap between the amount of infrastructure the world will need in order to support expected rates of economic growth ($3.3 trillion spent annually) and what they are currently investing ($2.5 trillion spent annually). The G20 hope the private sector can fill this gap. One of the problems with the mostly private market for infrastructure project finance is that there is currently no standard, or particularly appropriate financial model in use. The EDHEC Infrastructure Institute (EDHEC) has published over twenty reports on the subject of debt and equity infrastructure investments, which contain mathematical models that were created to develop benchmarks for these kinds of investments. Moody’s have also published research that discusses the methodology they use for rating infrastructure project finance. This paper is a critical analysis of the research published by EDHEC and Moody’s on the subject of valuing and rating infrastructure project finance. Through their work EDHEC have taken a big step towards standardising valuation methods in a hitherto opaque market. Their model is significantly more robust than Moody’s static rating system, which does not take into account the dynamic and path-dependent nature of risk and returns in infrastructure projects.