Infrastructure projects do not necessarily struggle to attract investment because capital is unavailable. Often, the challenge is that the risks associated with a project do not align with the risk-return requirements of potential investors. This creates a “bankability gap” between a project’s underlying economic or social value and its attractiveness to the market.
National Infrastructure Financing Institutions (NIFIs) can help bridge this gap by using their financial and institutional capabilities to reshape the risk profile of infrastructure projects and make them more investable.
Drawing on the discussion in Webinar 3 of the WAPPP 2026 Global Theme, this policy brief examines how NIFIs deploy financial instruments and blended finance approaches to manage risk and mobilise private capital. It considers the role of instruments such as credit enhancement, guarantees, longer-term finance and catalytic capital, while highlighting the importance of matching the instrument to the specific constraint that is preventing investment.
The brief also explores the balance between catalysing private investment and avoiding market distortion or institutional dependency. It argues that the effectiveness of NIFI intervention depends not simply on the availability of instruments, but on the discipline and judgement with which they are deployed.
Infrastructure projects do not necessarily struggle to attract investment because capital is unavailable. Often, the challenge is that the risks associated with a project do not align with the risk-return requirements of potential investors. This creates a “bankability gap” between a project’s underlying economic or social value and its attractiveness to the market.
National Infrastructure Financing Institutions (NIFIs) can help bridge this gap by using their financial and institutional capabilities to reshape the risk profile of infrastructure projects and make them more investable.
Drawing on the discussion in Webinar 3 of the WAPPP 2026 Global Theme, this policy brief examines how NIFIs deploy financial instruments and blended finance approaches to manage risk and mobilise private capital. It considers the role of instruments such as credit enhancement, guarantees, longer-term finance and catalytic capital, while highlighting the importance of matching the instrument to the specific constraint that is preventing investment.
The brief also explores the balance between catalysing private investment and avoiding market distortion or institutional dependency. It argues that the effectiveness of NIFI intervention depends not simply on the availability of instruments, but on the discipline and judgement with which they are deployed.