Putting Private Capital to Work in Rural Infrastructure

Infrastructure, or a lack thereof, can be a fundamental determinant of economic growth or decline. Rural infrastructure—such as roads, water systems, and broadband—is in dire need of upgrades and repair, which adversely impacts rural communities’ efforts to create jobs and stimulate economic growth. Fifteen percent of major rural roads are in poor condition, and one-fifth of rural bridges are either structurally deficient or functionally obsolete.

Only three-fifths of counties nationwide have public transportation service, and in many of those counties, service is very limited. Small water systems (those serving populations of less than 3,300) are in need of capital investment totaling $64.5 billion over the next 20 years.3 While crumbling infrastructure is not limited to rural areas, such areas face unique challenges in addressing infrastructure needs. Many projects are relatively small and therefore unable to attract regional support or investment from the private sector.
The usual means of paying for infrastructure—either taxes or user fees—are severely limited in many rural areas due to small and, in some cases, declining populations. It can be a struggle to recruit and retain staff with the necessary expertise, presenting a fundamental challenge to rural communities’ efforts to utilize their infrastructure efficiently and effectively.

While robust public funding is essential to meeting these urgent needs, rural areas, like their urban counterparts, should be empowered to tap into the financial and technical expertise of the private sector to help deliver infrastructure projects more quickly and at less cost. This paper will highlight examples of rural areas that have successfully overcome issues of size, resources, and experience to create successful partnerships with the private sector. It will also make a suite of recommendations to enable more rural communities to utilize private capital to help address infrastructure needs.