Private investment in infrastructure is again the rage among foreign investors and among governments in the developing countries of Asia, Latin America, and Africa. Billions of dollars are being committed to equity and debt for power plants, toll roads, ports and airports, and telecommunications facilities. Conferences on the subject are multiplying. Their popularity is reflected in the World Bank’s World Development Report 1994: Infrastructure for Development. In addition, there is a sizable and growing assortment of magazines that address issues relating to international financing of infrastructure, two examples being Infrastructure Finance and Project Finance International. As multilateral institutions and governments of developing countries eagerly court investors, there is ample evidence that infrastructure investment is in high demand. The 1992 International Finance Corporation Annual Report projected $200 billion per year in infrastructure investment in the 1990s, half of which would be for electricity. The Asian Development Bank calls for $1 trillion for the region by the end of the century.
A version of this article appeared in the September–October 1995 issue of Harvard Business Review.