Catalysing partnerships to mobilise infrastructure financing and investment in low- and middle-income countries
This learning note explores how an ecosystem approach to infrastructure financing can mobilise capital in low- and middle-income countries. It highlights the importance of early finance engagement, de-risking mechanisms, and integrated partnerships to transform technically sound projects into commercially viable investments.
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OVERVIEW
The paradigm shift: From siloed programme delivery to ecosystem approaches
GCIEP’s engagement in low- and middle-income countries (LMICs) demonstrates that intentional ecosystem positioning unlocks greater capital flows. Fragmented technical assistance often creates a disconnect where well-prepared projects cannot access appropriate finance, while investors struggle to find bankable, mandate-aligned opportunities.
Key partnerships within the UK development finance landscape
The UK government operates multiple programmes designed to tackle infrastructure investment barriers. Understanding how each programme’s mandate and financial tools intersect with GCIEP is critical for effective collaboration across the project cycle, from inception to financial close.
Upstream policy and enabling environment support
Upstream donor-funded programmes strengthen policy and regulatory foundations for project financing. For instance, UK PACT provides technical assistance on policy frameworks and regulatory harmonisation, which aids sub-national governments in creating enabling environments for green finance. Similarly, COAST provides grants for climate resilience, enabling GCIEP to move quickly from concept to bankable coastal investments.
Complementary project preparation and investment capacity
Programmes like InfraCo and the Global Clean Power Alliance (GCPA) provide additional preparation and investment capacity. InfraCo combines technical capability with co-investment balance sheets, allowing GCIEP to channel advanced projects into pipelines that catalyse further financing. GCPA focuses on accelerating the clean energy transition, creating near-investable projects that GCIEP helps move toward financial close.
Direct capital providers
Downstream institutions hold direct capital for deployment. British International Investment (BII) provides equity and debt for private infrastructure. By structuring public-private partnerships with transparent procurement and manageable risk allocation, GCIEP makes government-backed projects investable for BII. The Emerging Africa & Asia Infrastructure Fund (EAAIF) deploys long-term commercial debt, which GCIEP accesses by shaping project structures to align with EAAIF’s risk appetite.
De-risking mechanisms
De-risking is essential for translating technically sound projects into investable opportunities. UK Export Finance and Graco provide credit insurance and guarantees. Graco focuses on currency and political risks that deter private sector participation in emerging markets, improving commercial lender comfort and enabling financial close at attractive terms.
Translating recognition of the ecosystem into operational collaboration
Sustained collaboration requires early involvement of finance expertise. Feasibility studies proceeding without financial input often lead to unviable projects. By convening finance specialists early, realistic financing pathways emerge alongside technical design. In Ghana and Zambia, structured whole-system approaches and early engagement with guarantee providers have created replicable partnership models matching private sector risk appetite.
GCIEP’s lessons from ecosystem engagement
Delivery experience reveals key lessons. Deliberate ecosystem positioning attracts capital by sequencing policy and technical support. Engaging finance early shapes technical feasibility, reducing commercial unworkability risks. Integrated country-level partnerships create replicable models that travel better than abstract global strategies. Consistent pipeline visibility drives investor participation by presenting well-prepared projects aligned with their mandates. Finally, the targeted use of guarantees and credit enhancements is crucial for unlocking otherwise inaccessible capital in sectors like energy and water.