Building new roads, telecommunications facilities or power supplies is often a good way to boost growth and create jobs for countries. But getting investors to stump up funds to do so is often a challenge.
Noting this during a discussion with Group of 20 (G-20) leaders yesterday, Prime Minister Lee Hsien Loong offered some practical solutions to help countries break out of this logjam.
New ways might be created to help finance these projects, which he described as "one of the most positive agendas at the G-20".
These projects, he said, were the key to preparing for the future, boosting demand over the medium term and competitiveness over the long haul.
But apart from funds being limited, there is also a mismatch between developers wanting long- term loans to reduce their risk, and banks being reluctant to offer such loans.
While investors such as pension funds and insurance companies were prepared to take longer-term positions, they prefer "seasoned projects with more stable cash flow".
To overcome this mismatch between risks and returns, Mr Lee said capital markets could be developed to bridge the gap.
Banks could finance the initial construction stage of projects, while non-bank institutions could offer refinancing after construction.
New forms of capital, such as infrastructure trusts, could be created to draw institutional funds to post-construction financing.
Institutions like the World Bank or Asian Development Bank could offer high-quality bonds of their own, or risk insurance to make it easier for private investors to fund such projects.
Ways could also be found to unlock more funds, such as multilateral banks lending their expertise to structure projects, or by building up capabilities for joint projects between the public and private sectors.
Mr Lee called for concrete targets to be set to promote such infrastructure investments over the next two years, and rules to provide greater clarity and reduce risks.
This would help unlock capital and channel it into productive investments, and so "help to generate growth and jobs for the long term", he said.