New study calls for global project finance reform

The worldwide financial crisis puts a new emphasis on infrastructure spending, seen by many governments as a way to head off economic downturn, and as a way of holding on to achievements made in the developing world. Recent research by the Economic and Social Research Council finds that Project Finance (PF), one of the most commonly used methods of funding major infrastructure projects in the developing world, can pose potential risks in the communities in which it is deployed. In a study that has focused on the role of this financing technique in the developing world, the results point to potential damage to the environment, health and safety, and human rights concerns that can arise from the pressures that the funding strategy creates.

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