Infrastructure is a typical public good and should be financed on the public balance sheet in most cases. However, in recent decades, inefficiencies in public spending, misallocation of resources, and political interference have resulted in suboptimal capital spending. In response, the private sector has begun to play a substitution role in infrastructure spending. This paper examines investments in the form of equity or debt in direct investments to infrastructure. The reason for focusing on direct investment is twofold. First, the overall analysis of debt and equity capital markets for infrastructure exceeds the scope of this study and involves instruments that trade on regulated stock and bond markets. Second, the analysis of direct investments by private investors in listed infrastructure enables us to focus more on the risk analysis process that these investors typically perform when approaching an investment.
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