Attracting Private Investment in Public Infrastructure

Comparative Policy Innovations and Best Practical Models for Accelerating Infrastucture Financing in Developing Countries

Abstract

Public budgets and concessional aid are insufficient to deliver transport, energy, water and digital systems required in developing countries. This study examines how governments can mobilize private investment in public infrastructure by combining credible institutions, fit‑for‑purpose instruments, and risk sharing. Using Rwanda as an embedded case and benchmarking six exemplars (specifically Luxembourg, United States, Singapore, South Korea, Sweden, and Canada), the study uses mixed methods: qualitative analysis of laws, PPP guidance and project documents, alongside quantitative indicators of private participation in infrastructure and bond issuance. Findings converge upon three pillars: codified rules to reduce transaction costs; investable instruments (PPPs, infrastructure/green bonds and pooled vehicles) to widen the investor base; and de‑risking to unlock early markets when capped, disclosed, and time‑bound. A complementary contribution proposes a Retail Infrastructure Mobilization Model (RIMM) that adapts retail bond financing for infrastructure needs through ring‑fenced proceeds, independent oversight, milestone reporting, and consumer protection, enabling citizens and diaspora to co‑invest in service needs in tiers of USD 1,000–10,000 (or local equivalents). For Rwanda, a sequenced pathway is proposed: 1) standardizing PPP practice, 2) publishing a rolling pipeline, 3) piloting instruments including a Rwanda Retail Infrastructure Bond. and 4) tapering support as markets deepen.