This paper examines investments—in the form of equity or debt—in direct investments to infrastructure. It first introduces the pros and cons of project finance instrument. After that, it analyses infrastructure projects as a nexus of contracts and pool of risks. It then highlights the most important variables that investors look at when deciding to invest money in infrastructure projects. Followed by that, it draws conclusions and identifies some possible implications for the design of the business model of a newly created multilateral bank for Brazil, Russia, India, China, and South Africa (BRICS) countries.
This paper is part of the working paper series “Infrastructure Finance in the Developing World” and is a joint research effort by GGGI and the G-24, exploring the challenges and opportunities for scaling up infrastructure finance in emerging markets and developing countries.