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The Financing Structure of Global Infrastructure Projects

Author

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  • Krystyna Brzozowska

Abstract

Purpose: The purpose of this overview paper is an assessment of the financing structure of global infrastructure projects. Design/Approach: The basis for the research and considerations concerning the structure of financing in the global market for infrastructure investments is the many years of observations of the phenomena, volumes, and entities operating in this market. The basis for the observations was mainly reports and statistics of the IJ Global Project Finance and Infrastructure Journal. A review of English-language and Polish publications on the problems of financing infrastructure development was the premise for the research objective - to assess changes in the financing structure of infrastructure projects globally. The study used secondary data published by IJ Global for the years 2017- 2020. In making the assessment, an attempt was made to maintain a holistic approach to combine partial elements into a whole for a synthetic assessment of changes in the financing structure of infrastructure investment financing. Findings: The unprecedented situation in the world and global markets, triggered and exacerbated by the COVID-19 pandemic, has caused negative changes in the infrastructure sector. Despite the major setbacks, the performance of infrastructure investments globally has turned out to be favourable, mainly due to increased bond issuance. At the global level, there is a noticeable shift in the proportion of infrastructure investment financing. In general, Europe, North America, MENA countries and Sub-Saharan Africa have achieved higher levels of total funding, while the Asia Pacific region and Latin America have achieved lower levels. Practical implication: The research conducted on the financing structure of infrastructure investment globally and by world region may provide a rationale for expanding research in this area and assessing the vulnerability of financing relationships to unexpected external difficulties. Originality/Value: The study, in the form of a scientific contribution with a high degree of applicability, takes the form of a review using literature and published statistics and was geared towards analyzing and assessing changes in the financing structure of infrastructure investment geographically.

Suggested Citation

  • Krystyna Brzozowska, 2023. "The Financing Structure of Global Infrastructure Projects," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 362-376.
    • Handle: RePEc:ers:journl:v:xxvi:y:2023:i:2:p:362-376
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    References listed on IDEAS

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    1. Rabah Arezki & Patrick Bolton & Sanjay Peters & Frederic Samana & Joseph Stiglitz, 2015. "From Global Savings Glut to Financing Infrastructure: The Advent of Investment Platforms," OxCarre Working Papers 166, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    2. Benjamin C. Esty, 2004. "Why Study Large Projects? An Introduction to Research on Project Finance," European Financial Management, European Financial Management Association, vol. 10(2), pages 213-224, June.
    3. Emmanuel Donkor & Michael Duffey, 2013. "Optimal Capital Structure and Financial Risk of Project Finance Investments: A Simulation Optimization Model With Chance Constraints," The Engineering Economist, Taylor & Francis Journals, vol. 58(1), pages 19-34.
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    More about this item

    Keywords

    Infrastructure investment; global funding; financial structure; funding sources; world regions.;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F6 - International Economics - - Economic Impacts of Globalization
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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