5.5  QUASI-EQUITY FINANCE

Issuing quasi-equity securities such as bonds as a source of finance in infrastructure project is currently a topical issue. Issuance of securities is an alternative to traditional debt finance obtained from the banks. 

Issuing securities is a way to obtain financing through the capital markets. Capital markets in developing economies may not be as developed and as efficient. This in itself would not prevent an offering of securities in the international market that takes into account the specific country risks of the particular project.

Many governments already issue securities such as government bonds. A government department considering securities issues should therefore consult with the government department with the experience and capacity to conduct securities issues. This guideline will look briefly at the main issues.