Public and private sector planning, financing and budgeting for infrastructure investment

Module topical coverage

• Infrastructure project cycle ​
• Strategic planning of infrastructure investment ​
• Financing and budgeting ​
• Public-private partnerships 

Introduction

Infrastructure is the lifeline of any economy. It plays a vital role in driving economic growth, boosting trade, and reducing poverty, particularly in low-income countries where access to basic infrastructure is often limited.​

Well-planned infrastructure can help reduce inequality and promote long-term inclusive development. Realising these outcomes requires a planning process built on clear objectives and an open, collaborative approach that engages a wide range of stakeholders to reduce risks and uncertainties and align it to broader development goals, ensuring that resources are effectively prioritised and allocated.​

Infrastructure investment has predominantly been driven by the public sector. However, the scale and complexity of today’s infrastructure demands have made it increasingly necessary to explore alternative financing models. Public-Private Partnerships (PPPs) enable governments to draw on private sector resources and expertise while keeping infrastructure financing off the public balance sheet. When structured effectively, PPPs can foster collaboration, efficiency and promote a fair distribution of risk. ​

Governments can also utilise blended finance to work together with the private and philanthropic sector, reduce risks and enhance investment returns. Another mechanism is concessional finance, which is below market rate finance provided by major financial institutions, such as development banks and multilateral funds, to developing countries to accelerate development objectives.