“Where will the money come from?” would seem to be the question of the day in infrastructure circles. Governments from India to Ireland are under pressure to find new sources of funding, preferably at cheaper pricing and longer tenors. Basel III hems in infrastructure development on one side and Solvency II on another. Shrinking economies don’t have money; growing ones face a swelling bill for new infrastructure.

There is no shortage of projects being proposed, some with price tags running into several billion dollars. But when investors are presented with a project, they do not always find it investable. Even where private finance is available, not every project can be made attractive for all parties; it may require expensive wrangling and restructuring to do so. Capital is left parked at a time when it is needed more than ever.

Infrastructure investors and builders do not have far to look for suggestions for addressing the funding crunch, from public- and private-sector project-bond initiatives to government-guarantee schemes and infrastructure-debt funds. These are important and valuable solutions to a problem of liquidity, but in reality the industry faces a greater problem of growth.

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