Private Finance in Infrastructure

Original Published Date on Medium: October 20th, 2025

Reference: https://medium.com/@virikajuneja/private-finance-in-infrastructure-ef0991237652

As a follow up to my internship with the ADB project on the infrastructure development of Kaylana Lake and the ADB certificate in “Private Financing in Infrastructure and Sustainable Growth”, I analyze real life examples of ADB Private Finance.

Infrastructure projects, which require huge capital investments are traditionally funded through Public Finance or government capital.

So, why do we need Private Finance for Infrastructure?

In a developing country such as India, which has an ever growing need for infrastructure, investments just by government may lead to a deficit. Sovereign or public investments need to be combined with private financing through pension funds and insurance companies.

Private Financing for infrastructure also improves returns. The government benefits from increased tax revenues owing to the spillover economic benefits. For example, a railway stations can have the spillover economic benefits of a car parking and a nearby shopping mall. These spillovers will increase the revenue and tax collections. Increased tax revenues can be passed back to the investors in the form of subsidies.

ADB has approved USD 500 million loan to the India Infrastructure Finance Company Limited (IIFCL) to support infrastructure projects in areas such as connectivity, energy transition, urban development, education and healthcare. IIFCL, will co-lend with private investors.

Similarly, ADB has partnered with leading insurance companies to co-lend or insure sustainable infrastructure projects in Asia.