Unlocking Local Finance For Sustainable Infrastructure

This study is part of a broader program supported by the Public-Private Infrastructure Advisory Facility (PPIAF) to address the challenges in mobilizing LFC commercial lending into infrastructure and climate projects, public-private partnerships (PPPs), and risk sharing facilities in emerging markets.

The study explains the key drivers and enablers/binding constraints for the development of a robust ecosystem for financing infrastructure in local currency (LCY), such as: (i) the scale of private savings in a country; (ii) the ability and willingness of local credit markets to provide long-tenor debt; (iii) the potential for local capital markets to provide finance; (iv) the cost differential between LCY and foreign currency (FX) debt; and (v) capacity for structuring and credit evaluation skills for sustainable infrastructure financing.

World Bank. 2024. Unlocking Local Finance For Sustainable Infrastructure.