Are Returns to Private Infrastructure in Developing Countries Consistent with Risks since the Asian Crisis
AbstractThis paper presents a basic assessment of the financial performance of infrastructure service operators in developing countries. It relies on a new database of 120 companies put together to track the evolution of the cost of capital, the cost of equity and the return to equity for electricity, water and sanitation, railways and port operators in 31 developing countries distributed evenly across low-income, low-middle income and upper-middleincome countries. The paper shows that between 1998 and 2002, the average cost of capital in developing countries varied from less than 9% to over 15% across regions and sectors while the cost of equity varied from around 11% to over 21%. Low-middle-income countries have recovered relatively well from the East Asia crisis, while low-income and upper-middle-income countries have seen their situation deteriorate since the crisis. At the regional level, the main story is that East Asia is recovering quite well from its crisis, and that the financial performance of the operators in Africa and Latin America has deteriorated. Eastern Europe and South Asia are doing relatively better but show a large volatility of returns over time and within sectors. At the sector level, the railways and the water sectors have seen their performance deteriorate significantly over the period, while the energy and port sectors have done relatively better. In all sectors and regions, the average return to equity has been lower than the cost of equity since the Asian crisis.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by ULB -- Universite Libre de Bruxelles in its series ULB Institutional Repository with number 2013/44150.
Date of creation: 2005
Date of revision:
Publication status: Published in: Journal of Network Industries (2005) v.6 n° 1,p.47-71
Other versions of this item:
- A. Estache & M.E. Pinglo, 2005. "Are returns to private infrastructure in developing countries consistent with risks since the Asian crisis?," Competition and Regulation in Network Industries, Intersentia, vol. 6(1), pages 47-75, September.
- Estache, Antonio & Pinglo, Maria Elena, 2004. "Are returns to private infrastructure in developing countries consistent with risks since the Asian crisis?," Policy Research Working Paper Series 3373, The World Bank.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Antonio Estache & I. Alexander & A. Oliveri, 2001.
"A few things transport regulators should know about risk and the cost of capital,"
ULB Institutional Repository
2013/43999, ULB -- Universite Libre de Bruxelles.
- Alexander, Ian & Estache, Antonio & Oliveri, Adele, 2000. "A few things transport regulators should know about risk and the cost of capital," Utilities Policy, Elsevier, vol. 9(1), pages 1-13, March.
- Alexander, Ian & Estache, Antonio & Oliveri, Adele, 1999. "A few things transport regulators should know about risk and the cost of capital," Policy Research Working Paper Series 2151, The World Bank.
- Straub, Stephane, 2008.
"Infrastructure and development : a critical appraisal of the macro level literature,"
Policy Research Working Paper Series
4590, The World Bank.
- Stephane Straub, 2011. "Infrastructure and Development: A Critical Appraisal of the Macro-level Literature," Journal of Development Studies, Taylor & Francis Journals, vol. 47(5), pages 683-708.
- Stephane Straub, 2008. "Infrastructure and Development: A Critical Appraisal of the Macro-level Literature," ESE Discussion Papers 178, Edinburgh School of Economics, University of Edinburgh.
- Tan, Jeff, 2012. "The Pitfalls of Water Privatization: Failure and Reform in Malaysia," World Development, Elsevier, vol. 40(12), pages 2552-2563.
- Shaun K. Roache, 2006. "Domestic Investment and the Cost of Capital in the Caribbean," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 6(3).
- Anton Eberhard & Orvika Rosnes & Maria Shkaratan & Haakon Vennemo, 2011. "Africa's Power Infrastructure : Investment, Integration, Efficiency," World Bank Publications, The World Bank, number 2290, October.
- Shaun K. Roache, 2006. "Domestic Investment and the Cost of Capital in the Caribbean," IMF Working Papers 06/152, International Monetary Fund.
- Antonio Estache, 2006. "PPI Partnerships vs. PPI Divorces in LDCs," Review of Industrial Organization, Springer, vol. 29(1), pages 3-26, September.
- Patricia Clarke Annez & George E. Peterson, 2007. "Financing Cities : Fiscal Responsibility and Urban Infrastructure in Brazil, China, India, Poland and South Africa," World Bank Publications, The World Bank, number 6735, October.
- Ekholm, Tommi & Ghoddusi, Hamed & Krey, Volker & Riahi, Keywan, 2013. "The effect of financial constraints on energy-climate scenarios," Energy Policy, Elsevier, vol. 59(C), pages 562-572.
- Jensen, Olivia & Blanc-Brude, Frederic, 2006. "The handshake : why do governments and firms sign private sector participation deals ? Evidence from the water and sanitation sector in developing countries," Policy Research Working Paper Series 3937, The World Bank.
- Dethier, Jean-Jacques & Moore, Alexander, 2012. "Infrastructure in developing countries: An overview of some economic issues," Discussion Papers 123305, University of Bonn, Center for Development Research (ZEF).
- Rocha, Katia & Camacho, Fernando & Braganca, Gabriel, 2007. "Return on capital of Brazilian electricity distributors: A comparative analysis," Energy Policy, Elsevier, vol. 35(4), pages 2526-2537, April.
- Asian Development Bank & World Bank & Japan Bank for International Cooperation, 2005. "Connecting East Asia : A New Framework for Infrastructure," World Bank Publications, The World Bank, number 7267, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Benoit Pauwels).
If references are entirely missing, you can add them using this form.