Purpose and objective of this casebook
This casebook presents examples of the use made by DFID and other donors of capital investment in infrastructure and related sectors. The casebook was prepared by the Infrastructure and Cities for Economic Development (ICED) Facility of DFID.
The primary objective of the casebook is to provide clear and concise information as to how development finance has been used to catalyse private sector capital to fund infrastructure and related sectors in developing and transitional economies. The use of investment capital in this manner is required in order to bridge the significant and growing development finance gap estimated to currently stand at USD 2.5 trillion in developing countries, with much of this financing gap specifically relating to infrastructure. The existence and persistence of this gap severely constrains the growth of many developing and transitional economies.
The Sustainable Development Goals (SDGs) have highlighted the urgent need to address the development finance gap and to increase investment for development by an order of magnitude, moving from “billions to trillions”. Estimates indicate that only around 10 percent of current infrastructure investments come from the private sector.
The infrastructure funds considered in this report are set out in Table 1 below. This is not intended to be exhaustive, and the funds selected for this report were chosen to identify lessons from a crosssection of different fund structures and investors, both within the UK and internationally. All of the funds have an emerging and / or developing market investment focus. This represents only a small sample of the infrastructure funds launched with public sector backing. A list of the other funds considered as part of the scoping for this report is included in Annex 3 to the full report.
Infrastructure investment initiatives founded on public capital such as those considered in this casebook offer the potential to mobilise private sector investment at scale. It is therefore important to understand examples of where public funds have been used effectively to catalyse private sector investment, while minimising subsidies and maximising VfM where possible.