The Potential of Private Institutional Investors for Financing Transport Infrastructure

Sharma, Rajiv

doi:10.1787/5k46bj481jjh-en

Cited by 5 publications

(3 citation statements)

References 31 publications

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“…Infrastructure assets are considered heterogeneous and complex, associated with political, reputational, governance, environmental, construction, operational and financial risks, in addition to being subject to the uncertainties of the regulatory framework of the country where they are located (Inderst, 2014;Sharma, 2013). Thus, investments in infrastructure require specific knowledge of local conditions and methods of analysis distinct from those employed for traditional assets such as corporate stocks and bonds (OECD, 2020).…”

Section: Literature Reviewmentioning

confidence: 99%

Attracting private investments for infrastructure in Brazil

Yamahaki

Breviglieri

2022

Rev. Adm. Pública

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This study sought to identify the main drivers of and barriers to attracting capital market investments to the infrastructure sector in Brazil. The research findings indicate that the incentives vary according to the type of investor. Individual investors are strongly attracted by the tax exemption provided for in Statute 1,2431/2011 to purchase incentivized debentures, and, today, they represent one of the main investors in infrastructure in the country. On the other hand, domestic pension funds have no incentives based on this piece of legislation (their investments are exempt from income tax). For these pension funds, the spread paid by the issuers of incentivized debentures is low. Foreign investors consider the investment environment in the country to be unfavorable due to factors such as high exchange rate volatility and political instability. Therefore, broader institutional reforms are needed to fill the gap in infrastructure investments and attract long-term investors. Green certification of infrastructure projects represents another interesting strategy for attracting investments, especially foreign investors.

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Section: Literature Reviewmentioning

confidence: 99%

Attracting private investments for infrastructure in Brazil

Yamahaki

Breviglieri

2022

Rev. Adm. Pública

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“…Os ativos de infraestrutura são considerados heterogêneos e complexos, associados a riscos de natureza política, reputacional, de governança, ambiental, de construção, operacional e financeira, além de estarem sujeitos às incertezas do ambiente regulatório do país em que se encontram (Inderst, 2014;Sharma, 2013). Dessa forma, investimentos em infraestrutura requerem conhecimento específico das condições locais e métodos de análise distintos daqueles utilizados para ativos tradicionais como ações e títulos corporativos (OCDE, 2020).…”

Section: Revisão De Literaturaunclassified

Atração de investimentos privados para a infraestrutura no Brasil

Yamahaki

Breviglieri

2022

Rev. Adm. Pública

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Resumo Este estudo busca identificar as principais motivações e barreiras para a atração de investimentos do mercado de capitais para o setor de infraestrutura no Brasil. Entre os resultados da pesquisa, verificou-se que os incentivos variam conforme o tipo de investidor. Pessoas físicas são fortemente atraídas pela isenção fiscal prevista na Lei nº 12.431/2011, para a compra de debêntures incentivadas, e hoje representam um dos principais investidores em infraestrutura no país. Já fundos de pensão domésticos não são incentivados pela isenção da lei - seus investimentos são isentos de Imposto de Renda - e consideram baixo o spread pago pelos emissores das debêntures incentivadas. Investidores estrangeiros avaliam como desfavorável o ambiente de investimentos no país, em função de fatores como a alta volatilidade cambial e a instabilidade política. Conclui-se, portanto, que, para suprir a lacuna de investimentos em infraestrutura, há a necessidade de reformas institucionais mais amplas para atrair investidores de longo prazo. A certificação verde de projetos de infraestrutura representa outra estratégia interessante para a atração de investimentos, sobretudo estrangeiros.

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“…While financialization is mainly seen critically, there is also a positive view of taking infrastructures to capital markets. Involving institutional investors or capital market instruments into infrastructure finance is regarded, by its proponents, as a viable potential for providing additional funding for capital-intensive infrastructure projects and for increasing the efficiency of infrastructure management and service (Kaminker and Stewart 2012;Kaminker et al 2013;Sharma 2013). Critics, in contrast, point out that financialization can lead to under-investment in infrastructures and/or overpricing of its services due to relentless pursuit of profits and resulting in limited infrastructure access, as well as to exclusion and inequality (Harvey 2006;Beizley 2015;Bear 2017).…”

Section: Financialization Of Infrastructuresmentioning

confidence: 99%

Financing large-scale renewable-energy projects in Kenya: investor types, international connections, and financialization

Klagge

Nweke-Eze

2020

Geografiska Annaler: Series B, Human Geography

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As energy transitions are progressing and economies of scale are kicking in, renewable-electricity generation begins to include, and be dominated by, large-scale operations. This shift is accompanied by far-reaching changes in the ownership and financing structures of renewable-energy projects, involving connections and (inter)dependencies between international and domestic investors and policies. With growing sizes and maturity, renewable-energy projects are also increasingly taken to capital markets and have become subject to financialization. Until recently these processes have only been observed in the Global North but not in the Global South. So far there has been little research on renewable-energy financialization in the Global South, especially in Sub-Saharan Africa. In our paper we address this gap by exploring the international connections and (possible) financialization of two large-scale renewable-energy projects in Kenya. Based on case-study analyses of geothermal and wind projects in Kenya, we argue that due to their complex risk structure, public investment and support, both from domestic sources and development finance institutions (DFIs), are and will remain key to facilitate or even enable such projects. In contrast to Baker's (2015) case study on South Africa, we neither see nor expect financialization of large-scale renewable-energy projects in Kenya and most other Sub-Saharan African countries any time soon.

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The Potential of Private Institutional Investors for Financing Transport Infrastructure

Cited by 5 publications

References 31 publications

Attracting private investments for infrastructure in Brazil

Attracting private investments for infrastructure in Brazil

Atração de investimentos privados para a infraestrutura no Brasil

Financing large-scale renewable-energy projects in Kenya: investor types, international connections, and financialization

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