Overview
Demand for infrastructure financing in Asia is growing faster than countries' funding capacity. Going forward, infrastructure development has to look to private capital to remain sustainable.
Although demand is growing, infrastructure investors in Asia and emerging markets face many challenges . These include:
- Uncertain legal and regulatory frameworks.
- The different risk profiles of funds.
- Inequitable risk allocation.
- Stretched valuations due to increased competition.
- Limited exit options.
In Singapore, the financial ecosystem is working with multilateral development banks to improve the bankability of Asian infrastructure projects. The strategy is to crowd in private capital through innovative market mechanisms and infrastructure investment benchmarks.
Singapore also set up Infrastructure Asia in April 2018, a platform to connect local and international stakeholders across the value chain for joint projects. Singapore Statutory Boards and Government-owned companies are also exploring opportunities to issue bonds to finance infrastructure building.
Key Facts
Southeast Asia's Infrastructure needs:
US$2.8B per year
Baseline infrastructure finance amount needed from 2016 to 2030
US$92B per year
Gap between infrastructure spending in 2015 and needs from 2016 to 2020
5% to 10%
Expected growth in infrastructure spending per year till 2025
For details, see PWC's report Understanding infrastructure opportunities in ASEAN .
The challenge for governments in Asia is this: to make infrastructure more attractive to private capital.
- Ravi Menon, Managing Director, MAS
Regulations and Guidance
The regulations and licences that apply to your financial institution will depend on its financing activities and nature of investment.
Initiatives
Focus Areas
- Infrastructure Debt Distribution Facility
MAS is working with industry partners to securitise a pool of brownfield regional project finance loans from banks into a collateralised loan obligation that institutions can invest in.
The first infrastructure project finance securitisation in Asia took place on 25 July 2018. Bayfront Infrastructure Capital Pte. Ltd., which is sponsored by Clifford Capital Pte. Ltd.,offered three classes of investment grade rated notes (Class A, B and C Notes) to institutional investors. The notes will also be listed on SGX-ST.
- Infrastructure Asia
Infrastructure Asia brings together local and international partners, including developers, institutional investors, multilaterals, and legal and financial services providers, to meet Asia’s growing demand for infrastructure. As the definitive Asian 'marketplace', it matches the unique requirements of foreign firms and governments with the expertise of Singapore players.
What's New
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"Growing a Vibrant Insurance Linked Securities Market in Asia" - Speech by Mr Lim Cheng Khai, Executive Director, Financial Markets Development Department, Monetary Authority of Singapore, at the Artemis ILS Asia Conference 13 July 2023
Steve Evans, Editor in Chief, Artemis Distinguished guests Ladies and gentlemen Introduction 1. Good morning. Thank you for having me at the Artemis ILS Asia Conference. It is good to see the event back for its fifth installation in Singapore. I am happy to be here, to reconnect with friends I’ve met in Artemis New York...