Nairobi, Aug. 20 -- A growing number of institutional investors are shifting to innovative off-balance-sheet financing (OBSF) schemes in East Africa, a regional lender said, lured by the rising appetite for infrastructure project funds by governments in the bloc.

OBSF is an accounting practice that structures certain assets or liabilities of governments or corporations so they don't appear on the balance sheet, therefore creating some financial breathing space.

It involves omitting certain capital expenditures or assets from the balance sheet and is commonly used by businesses that are highly leveraged, especially when taking on more debt means a higher debt-to-equity ratio, which can attract higher interest charges.

"We have seen a sh...