Innovative financing of public infrastructure in Zambia: instruments and critical success factors

Kamiji, Kafula

Innovative financing of public infrastructure in Zambia: instruments and critical success factors

Thesis / Dissertation

2025

Publisher

University of Cape Town

Department

Graduate School of Business (GSB)

Faculty

Faculty of Commerce

Abstract

This dissertation investigates innovative financing mechanisms for financing public infrastructure in Zambia, juxtaposing current practices with their future potential. It aims to identify the key success factors that enhance the effectiveness of these innovative financial instruments. The research underscores the critical role of private sector participation in leveraging public resources for infrastructure financing in Zambia. The study employed a qualitative research approach by focusing on the perspectives and experiences of key stakeholders involved in public infrastructure financing. A multiple-case study design, encompassing diverse sectors and institutions, is utilised to provide a comprehensive understanding of the subject matter. The findings identify several potential innovative finance instruments suitable for the Zambian context, including debt instruments, risk management instruments, equity-based and partnership financing, and integrated and hybrid instruments. Additionally, the dissertation explores a broad spectrum of key success factors essential for the effective implementation of these innovative financial instruments. These factors include the availability of private capital, the necessity for investment-grade credit ratings, local currency financing, the bankability of projects, stable economic conditions, pension sector growth, financial incentives, proper deal structuring, and effective collaboration between the public and private sectors. The study concludes with recommendations for enhancing innovative financing mechanisms tailored to Zambia's specific context. It advocates for strategic policy changes to attract and sustain private sector investment, addressing the unique challenges and opportunities within Zambia's public infrastructure sector. This research aims to provide valuable insights for policymakers, practitioners, and researchers, contributing to the broader discourse on development finance and sustainable infrastructure development in developing and emerging economies.