Inderst, GeorgStewart, Fiona2014-05-152014-05-152014-02https://hdl.handle.net/10986/18358The link between infrastructure and economic growth is widely acknowledged -- as is the infrastructure gap, which can act as a break on growth in emerging markets and developing economies (EMDEs). Since the global economic and financial crisis, the challenges of raising financing for infrastructure projects in EMDEs are also well known. The challenges come from stretched government finances and restrictions on global bank lending. Hence much attention has been focused on the potential for institutional investors as a growing potential source of financing. This paper argues that infrastructure projects can potentially deliver long-term returns, but investments, particularly in EMDEs need to be carefully structured to meet the needs of both sides. The paper first considers the existing types of institutional investors and their potential for filling the infrastructure financing gap. The challenges of adjusting asset allocations, particularly toward EMDE infrastructure, are discussed and examples of projects where institutional investors have been involved are given. Finally, the paper considers a range of models for the involvement of institutional investors in EMDEs and makes initial proposals for how to determine which model fits best in a particular country context.en-USCC BY 3.0 IGOADVANCED ECONOMIESASSET CLASSASSET CLASSESASSET MANAGERSBANK ASSETSBANK LENDINGBANK POLICYBEST MARKETBOND INSURANCEBOND RATINGSBONDSBORROWING COSTSCAPACITY BUILDINGCAPITAL INVESTMENTCAPITAL MARKETCAPITAL MARKET ACTIVITYCAPITAL MARKET DEVELOPMENTCAPITAL STOCKCASH FLOWCASH FLOWSCOMMERCIAL BANKSCOMMERCIAL FUNDINGCONFLICTS OF INTERESTCORPORATE BONDCORPORATE BOND INVESTMENTSCORPORATE BONDSCOUPONCREDIT ENHANCEMENTCREDIT GUARANTEESCREDIT RATINGCREDIT RATINGSCREDITORDEBTDEMOGRAPHICDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPING ECONOMIESDEVELOPMENT BANKDIRECT INVESTMENTDOMESTIC CAPITALDOMESTIC CAPITAL MARKETSDOMESTIC ECONOMIESDOMESTIC INSTITUTIONAL INVESTORSDOMESTIC MARKETSDUE DILIGENCEECONOMIC CRISISEMERGING MARKETEMERGING MARKET ECONOMIESEMERGING MARKETSENABLING ENVIRONMENTEQUITIESEQUITY FUNDEQUITY FUNDSEQUITY HOLDINGSEQUITY INVESTMENTSEXPROPRIATIONEXPROPRIATION RISKSFINANCE CORPORATIONFINANCIAL COMPANIESFINANCIAL CRISISFINANCIAL INSTITUTIONSFINANCIAL INSTRUMENTSFINANCIAL MARKETSFINANCIAL SECTORFLOW OF CAPITALFOREIGN EXCHANGEFOREIGN EXCHANGE RISKFOREIGN INVESTORSFUND MANAGERSGLOBAL CAPITALGLOBAL CAPITAL MARKETSGLOBAL PENSIONSGOVERNMENT BONDSGOVERNMENT EXPENDITURESGOVERNMENT FINANCESGOVERNMENT POLICYGRACE PERIODSILLIQUIDITYINCOMEINCOME STREAMSINFLATIONINFRASTRUCTURE BONDINFRASTRUCTURE BONDSINFRASTRUCTURE DEVELOPMENTINFRASTRUCTURE FINANCEINFRASTRUCTURE FINANCINGINFRASTRUCTURE INVESTMENTINFRASTRUCTURE INVESTMENTSINFRASTRUCTURE PROJECTINFRASTRUCTURE PROJECTSINSTITUTIONAL INFRASTRUCTUREINSTITUTIONAL INVESTMENTINSTITUTIONAL INVESTORINSTITUTIONAL INVESTORSINSURANCEINSURANCE COMPANIESINSURANCE COMPANYINSURANCE PENETRATIONINSURANCE PRODUCTSINSURERINSURERSINTEREST RATEINTEREST RATESINTERNATIONAL BANKINTERNATIONAL BEST PRACTICESINTERNATIONAL COMPETITIONINTERNATIONAL FINANCEINTERNATIONAL FINANCIAL MARKETSINTERNATIONAL INSTITUTIONAL INVESTORSINTERNATIONAL INVESTORSINVESTINGINVESTMENT APPROACHESINVESTMENT BARRIERSINVESTMENT CAPITALINVESTMENT FINANCINGINVESTMENT GOVERNANCEINVESTMENT OPPORTUNITIESINVESTMENT POLICIESINVESTMENT REGULATIONSINVESTMENT RISKINVESTMENT VEHICLEINVESTMENT VEHICLESINVESTMENT VOLUMESINVESTOR BASEIPOISSUANCELEGAL MECHANISMLIQUID ASSETSLIQUIDITYLOCAL INVESTORSLOCAL MARKETSLONG TERM BONDLONG-TERM CAPITALLONG-TERM FINANCELONG-TERM INVESTMENTMARKET CAPMARKET FAILURESMARKET INFRASTRUCTUREMARKET PRACTICEMARKET RETURNSMATURITIESMONETARY POLICYMULTILATERAL DEVELOPMENTMUNICIPAL BONDSMUTUAL FUNDSNATURAL RESOURCEPARTIAL CREDITPARTIAL CREDIT GUARANTEESPARTIAL RISKPARTICULAR COUNTRYPENSIONPENSION ASSETSPENSION FUNDPENSION FUND INVESTMENTPENSION FUNDSPENSION SYSTEMPENSION SYSTEMSPENSIONSPOLITICAL ECONOMYPOLITICAL RISKSPOOLS OF CAPITALPORTFOLIOPORTFOLIO EXPOSUREPORTFOLIO GROWTHPORTFOLIOSPOTENTIAL INVESTMENTPOTENTIAL INVESTMENTSPRIVATE CAPITALPRIVATE CREDITPRIVATE EQUITYPRIVATE FINANCEPRIVATE FINANCINGPRIVATE INFRASTRUCTUREPRIVATE SECTOR DEVELOPMENTPRIVATE SECTOR FINANCEPRIVATE SECTOR INVESTORSPRIVATIZATIONPUBLIC BANKPUBLIC INVESTMENTRAPID GROWTHREGIONAL BOND MARKETREGULATORY CONSTRAINTSREGULATORY ENVIRONMENTREGULATORY RESTRICTIONSREGULATORY STANDARDSREGULATORY SYSTEMSRENEWABLE ENERGYRESERVERESERVE FUNDSRETURNRETURNSRISK PREMIUMRISK-FREE INVESTMENTSSAVINGSSMALL BUSINESSESSMALL COUNTRIESSOCIAL DEVELOPMENTSOVEREIGN BONDSSOVEREIGN RISKSTOCK EXCHANGESSTOCK MARKETSTOCKSTECHNICAL ASSISTANCETERMS OF CREDITTRADITIONAL INVESTMENTTRUST FUNDS10.1596/1813-9450-6780