Government’s encouragement of investment in infrastructure projects could be good for the both the insurance companies that do invest and the fund recipients, assuming returns can actually be delivered. As long as these are not mandated, I believe this is good policy (mostly for entrepreneurs), and something that is also interesting for private sector investors to take a look at and perhaps compete with.
Whether this makes good economic sense would be subject to what the actual projects would be, and where the returns would be derived.
I’m seeing not only insurance companies but even private funds/investment banks who are creative enough who will participate in infra projects with those kinds of returns (20% p.a.). There are even higher yielding investments in this space that can be accessed by enterprising businessmen. These projects are expected to give tremendous value to their stakeholders, so these returns can somehow be justified.
Personally, I would be looking at long term infrastructure with good managers, such as toll roads and airports, and projects related to the supply chain. If projects are subsidized through government guarantees, the shorter the recovery period, the better. This subsidized projects normally don’t make as much economic sense as the unsubsidized ones, but from a pure return standpoint, they do make sense for the investors.