Infrastructure Finance

Industrial Finance
January 11, 2017
Business Finance
August 30, 2016
Show all

Infrastructure Finance

The basic physical systems of a business or nation. Transportation, communication,

sewage, water and electric systems are all examples of infrastructure. These systems

tend to be high-cost investments, however, they are vital to a country’s economic

development and prosperity. Infrastructure projects may be funded publicly, privately

or through public-private partnerships.
Sometimes private companies will choose to invest in a country’s infrastructure

development as part of a business expansion effort. For example, an energy company

might build pipelines and railways in a country where it wants to refine petroleum.

This investment can benefit both the company and the country.
Infrastructure is also an asset class that tends to be less volatile than equities

over the long term and generally provides a higher yield. As a result, some companies

and individuals like to invest in infrastructure for its defensive characteristics.

Individuals and institutions can invest in infrastructure through infrastructure

funds and can even choose specialized funds, such as those that invest in

transportation infrastructure or water infrastructure.