Establishing privatization fund

In developing countries, privatization is often hindered by the absence of a well-developed private sector, limited absorptive capacity in local capital markets and a reluctance to sell public assets to foreigners.

A Commonwealth Privatization Fund is proposed to be set up, as a commercial investment fund to buy shares in privatized companies. The fund will target investment opportunities in Commonwealth developing countries. It is anticipated that the Fund, acting as a minority shareholder, could provide a demand for privatized assets and bring in foreign exchange as well as knowledge and skills in financial services without seeking a controlling or managing role. Managed on commercial lines, the fund of around US$50 million would be comprised of resources raised from the market, without seeking finance or guarantees from governments.