To tap into potential sources of private capital, financing instruments that cater to and provide safeguards for investors could be an attractive and powerful mechanism to support financing of infrastructure projects.

Specific financing instruments that support risks that investors face include for example green, social and sustainability-linked bonds. Such instruments could address some of the risks that investors find difficult to overcome.

The complexity and long-term nature of infrastructure projects, as well as the governments’ administrative processes, means that having access to upfront and early information can support developers and investors improve their expectation for financing and investments. At the same time, strong engagement with private sector stakeholders can assure that projects are developed with better input and contributions from them, supporting the long-term financial viability of projects.

Government at all levels need to coordinate their engagement and processes so that the administration of projects as well as the costs that are involved, including transaction costs, can be predictable and enable informed investment decisions.