Foreign direct investment for infrastructure development: Changing nature of risks and challenges for developing countries

Abstract

This thesis focuses on the fact that with the economic liberalization in developing countries, the traditional forms of FDI for infrastructure development have changed, making way for innovative mechanisms such as Build Own Operate (a??BOOa??) and Build Operate Transfer (a??BOTa??). In harmony with these changes, the nature of the risks associated with traditional forms of FDI too has changed. In the circumstances, the aim of this thesis is threefold: (1) to describe the transition of investment needs of developing countries from direct financing to project financing methods; (2) to identify the changing nature of traditional and non-traditional risks associated with FDI with the growing use of project financing measures; and (3) to review the key implications to developing countries in policy, regulatory, planning and decision-making frameworks resulting from the influences of project financing climate and to propose various measures that could be adopted for future success of project finance.