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Shifting the paradigm: Three routes to maximizing infrastructure finance for development

Frédéric Blanc-Brude's picture

Photo: Andreas Wecker | Flicker Creative Commons

By promoting better standards, methods and benchmarking, development finance institutions can move the mountain that is preventing institutional capital from flowing into infrastructure.
 
The World Bank Group's initiative to Maximize Finance for Development (MFD) aims to find solutions to crowd in all possible sources of finance, innovation, and expertise in order to achieve the Sustainable Development Goals (SDGs). In the case of infrastructure investment, a significant contribution to long-term sources of private finance is expected from institutional investors such as pension plans, life insurers, and sovereign wealth funds.
 
These investors have become increasingly interested in infrastructure investment in recent years, in search of new sources of returns, diversification, duration and inflation hedging. However, they cannot be expected to make a substantial and durable contribution to the long-term financing of infrastructure without three important changes:

Quote of the Week: Tidjane Thiam

Sina Odugbemi's picture

Tidjane Thiam"You can commit to what you control; if you commit to what you don’t control, you are just a fool.”

Tidjane Thiam, in response to criticism of his new plan for Credit Suisse. Rather than dramatic restructuring seen at other banks, Credit Suisse will reduce the amount of risk-weighted assets by about a fifth and raise equity through a combination of increasing capital by $6.3 billion from sales of shares, scaling back investment banking, slashing costs and a modest shake-up among senior management.

Thiam is a French Ivorian businessman and former politician who became the Chief Executive of Credit Suisse in June 2015. Born in Côte d'Ivoire, he holds dual Ivorian and French citizenship.