Bond Market Development As A Source Of Financing Infrastructure Projects: A Comparison Of India, Russia And Other Countries, 2010-2020

This article deals with the peculiarities of infrastructure bond market development in developing countries (India and Russia). They are a promising tool for raising funds for long-term periods (10-30 years) to implement investment projects for infrastructure development. The interest in developing the infrastructure bond market is linked to the fact that they have attractive characteristics and meet risk management needs. The main risk of bonds is credit risk. The complexity of financial structures, contracts and guarantees requires specialized expertise in infrastructure project analysis to reduce this risk. Another risk to consider is liquidity risk, as the more complex structure means that these bonds trade less frequently in the secondary market. The increase in the number of investors and the standardization of issues are elements that progressively contribute to improving liquidity. In addition, the risk of concentration in a single sector must be considered. Indeed, emerging countries can transfer construction, operation and financing risks to specialized firms. Infrastructure projects need long-term assets, thus offering high and stable financing. The development of infrastructure bonds, particularly those structured as public-private partnerships (PPPs), municipal bonds or green bonds, is emerging and taking a significant place in the bond indices of emerging countries. Thus, based on data from the bond market in foreign and domestic countries on the one hand, the main characteristics that ensure the development of infrastructure bonds in developing countries are highlighted on the other. Therefore, the objective of this study is to use a comparative and analytical approach to infrastructure bond issues in developed countries (United States) to identify the particularities of infrastructure bond market development in developing countries. In general, infrastructure bonds in emerging countries present attractive characteristics for this sector, the raising of funds over long-term periods, and the shared management of risks are all reasons to be interested in the development of this market.