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A ‘Real Options’ Perspective to Development Finance-Related Investment Decisions

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  • Danny Cassimon
  • Peter-Jan Engelen

    (University of Antwerp)

Abstract

In this contribution, we explain the basics of the real option approach to development finance related investment decisions, and how it alters the conventional investment decision-making rule. We then show its relevance to development finance-related decision-making investment decisions broadly speaking, and more specifically how it can be applied to inform public-sector interventions in order to crowd-in the private sector to invest in development- relevant projects, and generate additional finance to meet the Sustainable Development Goals (SDGs) and other current global (development) challenges, i.e. the so-called ‘blended finance’ approach. Along the way, some particular examples are included to show concrete applicability in practice and generate ideas for further research.

Suggested Citation

  • Danny Cassimon & Peter-Jan Engelen, 2022. "A ‘Real Options’ Perspective to Development Finance-Related Investment Decisions," Africagrowth Agenda, Africagrowth Institute, vol. 19(2), pages 4-8.
  • Handle: RePEc:afj:journ2:v:19:y:2022:i:2:p:4-8
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    File URL: https://journals.co.za/doi/abs/10.10520/ejc-afgrow_v19_n2_a1
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