Harnessing private capital in turbulent times through infrastructure stimulus programmes
Governments are implementing advanced support programmes to stimulate economic recovery following the pandemic, including making investments in physical infrastructure, digital and communications upgrades, sustainability improvements and highly targeted tax incentives. The use of private capital has an essential role to play in delivering economic stimulus, but programmes must also be well structured and managed.
In this report, we consider ways in which governments can harness private capital to help deliver strong economic stimulus. Many governments have a strong desire to involve private capital in infrastructure projects as they seek to accelerate recovery from the pandemic, however, they must always begin with an examination of how to improve their own infrastructure scheme evelopment and management, and where private involvement could be usefully introduced for better delivery.
To make the most of private capital, governments should consider the following:
- Careful assessment of the goals, costs and risks
of infrastructure investment - Cyclical investments for long-term benefits
- Well-structured risk, reward and opportunities
Now is the time to involve private capital in developing or running important, appropriate assets, potentially increasing their economic stimulus effect. By carefully harnessing private capital, managing schemes well and appreciating political sensitivities, governments can establish an environment of reliable, ongoing growth.
