Capital markets funding is expected for infrastructure projects to double in the near term, and could accelerate with successful securitization of some assets.
Despite the global banking crisis, the project finance market remains dominated by commercial banks. Long term lending remains an unattractive proposition for many banks and with the advent of Basel III the situation is unlikely to improve dramatically. Increasing the liquidity of the infrastructure asset class will attract more institutional investment vehicles. With increasing capital requirements, banks will be hard-pressed to finance large infrastructure projects, especially those with long tenors.
A number of potential solutions are being developed to address this challenge and one such product is that offered by Morgan Stearns' Structured Investment Vehicles (“SIV”). The purpose of this paper is to examine the barriers to accessing the debt capital markets for project financing and provide a qualitative and quantitative analysis of the SIV product as compared to the current project finance bank market.
Industrial/Infrastructure Project Finance
Public Private Partnership (PPP) for Emergent Market
Project Finance Initiatives (PFI) for Emergent Market
Infrastructure Financing
Morgan Stearns has aligned with Financing for infrastructure projects – supported the infrastructure and project finance markets through infrastructure stimulus and specialist funds may arise, while pension funds and sovereign wealth funds are seizing a direct stakes in infrastructure projects.
The global demand for infrastructure remains significant, US$40 trillion over the next 20 years. In lieu of these events; a consortium led by MS is underway to administer well over 4.7 trillion throughout emergent markets over the next seven years.
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PPP & PF Initiatives for Emergent Market Development
With an emphasis towards accessing Capital Markets are seizing public-private partnerships (PPPs) can gain traction provided the government partners can show private investors both stability and a professional transactional capacity.
The key to successfully raising enough investment for tomorrow’s essential infrastructure will rest in finding the optimum balance between public and private money