Globalisation of the construction industry: a review of infrastructure financing

The importance of reliable and well-developed infrastructure for the development of any nation hardly needs to be emphasized. Efficient transport, reliable energy, safe drinking water and modern telecommunication systems are all critical to attracting foreign direct investment (FDI), expanding international trade, achieving long-term investment and growth, and ultimately ensuring social development of the population. Although globalization was expected to ensure that global capital markets, which have the depth, maturity, size and sophistication to fund all viable investments would ease financing of infrastructure projects, this has not happened and demand for infrastructure, particularly in the developing countries has remained acute. This paper reviews the financing of infrastructure projects and based on historical trends it argues that construction industries need to take more active part in the financing of infrastructure projects as a strategy for their own development. It concludes by emphasizing the importance of putting infrastructure industries on commercial footing as a pre-requisite to financing them.