Private investment in infrastructure is falling in BRICS countries
Global private sector investment in infrastructure held firm at US$111.6 billion for 2015 compared to the previous year, though long term figures for China, Brazil and India have slowed, according to a World Bank report. The figures, unveiled on 13 June 2016, are drawn from the bank’s
database
for private infrastructure capital which covers projects affecting transport, water and energy globally. Investments in renewables went up 72 percent in 2015, the report said, marking the biggest growth spurt for the sector in five years. Renewables currently account for 63 percent of global investments, it added, due to a wider adoption of clean energy sources such as wind, hydro and geothermal power. But the report also found private investment fell on the previous five-year average by 10 percent, due to wavering project commitments in China, Brazil and India. Brazil netted a staggeringly low investment of only US$4.5 billion, dropping well below the previous US$47.2 billion recorded in 2014. Clive Harris, Practice Manager for Public-Private Partnerships at the World Bank Group, said the change in infrastructure project investment in Brazil reflects a spike in private sector development while the country has played host to two major international sports tournaments. “[Brazil] wanted to deliver a lot of infrastructure projects two years ago for the World Cup, and recently for the
Olympics
, so over and above the natural cycle of things, you would be expect to see a natural decline there,” Harris said. Out of the countries covered in the report, Turkey stood out for closing two large transport infrastructure deals in 2015, which amounted to a combined US$44.7 billion, representing 40 percent of total global investment. Transport drove the highest volume of commitments of the sectors analysed, raking in a total of US$69.9 billion. Projects have grown in scale over the last four years, the report noted, reaching a peak average size of US$419.3 million in 2015. Harris told
Development Finance
the trend would likely last well into 2017. “I think that’s something which probably will continue. We’ve got a better handle on what is the right role for public and private sectors in infrastructure projects. To some extent, [the data] is telling us that the private sector is more confortable going into these projects and it reflects the realisation from governments that there’s more ways to blend public and private investments,” he said.
By Jack Aldane
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Photo: Agencia Brasil