The impact of quantitative easing (QE) on the cost of debt in project finance investments

Abstract

Recession-driven low inflation and high spreads have increased the cost of debt in public sector project finance investments, therefore reducing private sector profits and bankability. This paper investigates the impact of quantitative easing by central banks, showing that it can stimulate economic growth producing shared public and private benefits.

Keywords:

• Central banks
• infrastructure finance
• monetary policy
• public–private partnerships (PPPs)
• public sector debt
• quantitative easing