Urban infrastructure finance from private operators

The paper examines the role of private participation in infrastructure (PPI) in mobilizing finance for key urban services, that is, urban roads, municipal solid waste management, and water and sanitation since the early 1990s. The review indicates that for financing urban services, PPI has disappointed-playing a far less significant role than was hoped for. The author identifies good reasons-practical, political, economic and institutional-for this disappointment. Experience shows that there are a number of features that raise the risk profile of urban infrastructure for private investors. Many of the measures that could reduce the risk profile are outside the control of many cities, others unlikely to change, and yet another group of steps to be taken that would improve prospects for urban service provision, whether in the hands of public or private operators. These findings suggest a more pragmatic and selective approach to the focus on PPI as a source of finance.