RAKESH MOHAN and DIVYA SRINIVASAN
NEW DELHI – With infrastructure now seen as the leading engine of growth across the Global South, governments are under pressure to build – and fast. But for most, fiscal space is limited; development aid is thinning; and long-promised climate financing remains elusive. As a result, countries are turning to private capital and reviving an old idea with renewed urgency: public-private partnerships (PPPs).
According to the World Bank, in 2024, low- and middle-income countries received $100 billion in private participation in infrastructure (PPI) investment, an impressive 20% increase from the five-year (2019-23) annual average of $83.7 billion. Yet history recommends caution. While the logic of mobilizing private finance is often compelling, the record is mixed. Too often, emerging markets have relied on models proselytized by global development finance institutions without paying adequate attention to local institutional constraints.
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