Written by World Bank - Martha Lawrence & Gerald Ollivier
15 May 2017

China is considering ways to attract additional capital to finance investment in railways. Worldwide, private capital has been attracted to the railway sector through a range of mechanisms including:

  1. private sector provision of specific rail services or assets such as rolling stock;
  2. public private partnerships,
  3. leveraging commercial value of rail assets and increased land value around stations; and
  4. debt and equity financing of railway companies. Private sector investors seek to earn a return on their investment that is commensurate with the risk of the investment. This note discusses four mechanisms for attracting private investment:
    (i) private sector provision of specific rail assets or services;
    (ii) public private partnerships,
    (iii) leveraging commercial value of rail assets and increased land value around stations; and
    (iv) financing railway companies.

    These mechanisms are discussed separately, but they overlap and can be combined as circumstances require.

Publication Date: 08.2014

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