Global challenges such as ever-changing geopolitical conditions, fluctuating commodities prices, urbanization, population growth and climate change are sometimes more keenly felt in emerging markets than in developed markets. Key to achieving the robust economic growth and the regional and domestic market stability required to overcome these challenges – and to enable emerging market economies to make the most of their opportunities – is infrastructure.
Our latest report, A Changing World: New Trends in Emerging Market Infrastructure Finance, looks in-depth at trends in infrastructure finance. It shows development finance lending as the single most important factor in the funding of infrastructure projects in Africa, and also discusses how the battle for influence on the continent between development finance institutions from China and the US looks set to heat up as the continent continues to bridge its vast infrastructure gap.
As advisors on some of the largest infrastructure deals in the world, we believe that alternative structures and innovative financial instruments, stable regulatory environments and greater support for private equity investment will be essential in closing this gap. Although much remains to be done, there are also many reasons to be optimistic; we have seen governance improvements in some areas and an increased focus on countries’ governance track records; innovative approaches are being taken by both global and regional development finance institutions; and there is greater cooperation between development finance institutions, export credit agencies and commercial banks which is leading to more projects being financed.
We hope this report inspires all market participants to think progressively about this evolving investment landscape as we seek to unlock infrastructure’s full potential.