How Impact Investing Can Help Bridge the Financing Gap in Sustainable Infrastructure in Developing Countries

A significant and untapped supply of capital is ready to be mobilized to meet the urgent infrastructure financing gap in emerging markets, but a limited stock of bankable investment opportunities remains a constraint. To date, private investment in infrastructure has been concentrated in large-scale energy, transport, and ICT projects, where an emerging track record of commercial success has created a virtuous cycle for capital flows. However, many projects in these sectors with high impact potential – in higher-risk locations or serving lower income users – remain neglected. In the housing, water and sanitation, education, and health sectors there is a much more limited track record of private investment which deters investors from pursuing deals that could be both highly impactful and cash flow positive.  Impact investing can help bridge the financing gap in sustainable infrastructure in developing countries.