Blair Chalmers, Director, Marsh and McLennan Companies’ Asia Pacific Risk Center
Global infrastructure investment needs between now and 2040 are likely to top USD 94 trillion. While governments must take the lead to meet this massive infrastructure need, they cannot fund this level of infrastructure investment alone.
Increased private participation can close the financing gap and many governments have increasingly tried to position their countries as favorable destinations for private infrastructure investment.
One potential mechanism for securing private sector investment in infrastructure is infrastructure asset recycling. The concept of asset recycling consists of two main components:
- The monetization of existing infrastructure assets through sale or lease to the private sector, followed by
- Reinvestment in new infrastructure using the proceeds received in the asset monetization
Asset recycling offers the opportunity to provide newly needed infrastructure without adding to public debt, all while maintaining or potentially improving existing infrastructure service delivery.
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