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, former 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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"Transition, Technology and Talent to Accelerate the Value of Insurance" - Keynote Address by Mr Lawrence Wong, Deputy Prime Minister and Minister for Finance, and Chairman of the Monetary Authority of Singapore, at the 2023 Global Insurance Forum on 7 November 2023
At the 2023 Global Insurance Forum, Mr Lawrence Wong, Deputy Prime Minister, Minster for Finance and Chairman of the Monetary Authority of Singapore, shared how the insurance industry can further deepen its value to society by supporting the transition to net-zero, harnessing technology particularly artificial intelligence, and developing the talent needed to make these possible.
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"Singapore - Becoming an ILS Domicile for Asia" - Opening Speech by Ms Gillian Tan, Executive Director, Monetary Authority of Singapore, at Artemis ILS Asia 2019 on 11 July 2019
Ms Gillian Tan, Executive Director, MAS, shared about the Insurance-linked securities (ILS) landscape globally and in Asia, and discussed Singapore’s role in supporting the growth of ILS in Asia.
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Keynote Speech by Mr Heng Swee Keat, Deputy Prime Minister and Minister for Finance, at the OMFIF Global Public Investor Launch on 12 June 2019
Mr Heng Swee Keat, Deputy Prime Minister, Minister for Finance and MAS’ Board Member, said Singapore seeks to contribute to Asia’s sustainable growth by serving as a key node for channelling financing to the region.
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"Window To The Past, Portal To The Future" - Speech by Ms Indranee Rajah, Minister in the Prime Minister’s Office, Second Minister for Finance and Education at the Standard Chartered Bank's 160th Anniversary Celebration Dinner on 13 February 2019
Ms Indranee Rajah, Minister in the Prime Minister’s Office, Second Minister for Finance and Education, spoke on how Singapore is positioning itself for the future, such as leveraging Asian growth, innovation, helping people to reskill and upskill, financing infrastructure development, and supporting sustainability and green financing.
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Keynote speech by Mr Heng Swee Keat, Minister for Finance, and MAS’ Board Member, at the 8th World Bank-Singapore Infrastructure Finance Summit on 5 April 2018
Keynote speech by Mr Heng Swee Keat, Minister for Finance, and MAS’ Board Member, at the 8th World Bank-Singapore Infrastructure Finance Summit