Abstract:
A country's level of infrastructure can influence its residents' well-being,
environmental protection, knowledge creation, and economic competitiveness. Due
to rapidly increasing urbanisation and concomitant requirements for better
infrastructure, the public sector, the traditional provider of infrastructure, is under
duress to provide the required capital for infrastructure development. It is generally
widely acknowledged that additional funding needs to be mobilised from the private
sector for infrastructure development.
Several factors, including macroeconomic factors, affect the mobilisation of private
sector finance for infrastructure development. Though the importance of
macroeconomic factors in attracting private sector finance has been stated by many
scholars, very few studies have been undertaken to identify them, specifically in the
South African context.
A qualitative exploratory research approach was adopted to identify the relevant
macroeconomic factors and how they influence the private sector financing of
infrastructure projects. In the study, 12 in-depth semi-structured interviews were
conducted with experienced professionals engaged in debt, mezzanine, and equity
financing of infrastructure projects.
The study established that relevant macroeconomic factors affect the project
financing decisions of the private sector. The findings contributed to the development
of a framework to leverage the identified macroeconomic factors to attract private
sector finance for infrastructure development. In addition, this study contributes to
the general body of academic literature on this subject.