Infrastructure Investment and Finance in the Global South: Private Participation and Its Determinants

While the public sector is traditionally the sole provider for much of infrastructure, the pendulum is shifting in light of the enormous investment gap. Across the Global South, public utilities and planning agencies are engaging with the private sector to help bridge the gap. What are the key patterns of private participation in infrastructure (PPI) across countries in the Global South? What macro factors underscore such private participation? These research questions motivate this paper, focusing on five infrastructure sectors across the Global South and its regions. Following a historical synthesis of the changing balance of public and private provision, the paper outlines recent patterns of PPI. Drawing from a World Bank database, a regression analysis includes key macro-level predictors for private sector financing, for both the number of projects and stock of investment. Key results point to the importance of market size and in turn the potential for risk diversification, as well as a set of governance factors underlining investor confidence and stable environment.