Alternative ways of financing infrastructure investment: Potential for 'novel' financing models

Abstract

This paper examines the issue of financing infrastructure investment projects. It looks closely at what the market failures are that mean the private sector has not been able to cover the investment requirement itself. It will then assess the government failures associated with intervention, and identifies what public-private partnerships (PPPs) offer in overcoming these failures. The limitations of the PPPs are then addressed, and the regulated asset base (RAB) model is introduced as a potential alternative, with an assessment of its advantages and disadvantages.