SINGAPORE: To help meet Asia’s huge infrastructure development needs, National Development Minister Lawrence Wong said Singapore could help other countries in the region develop long-term urban master plans and implement infrastructure projects.
In his keynote address at the Urban Land Institute Asia Pacific Summit on Wednesday (Jun 7), Mr Wong cited estimates by the Asian Development Bank that placed the cost of urban development required to tackle poverty and to respond to climate change at around US$1.7 trillion a year from now until 2030.
“The region now invests about US$900 billion annually. So, between US$1.7 trillion annually and US$900 billion annually is a huge gap that needs to be met, and really the status quo is not tenable,” said Mr Wong.
“We all know that there are no easy answers - I don’t pretend to offer a solution today. What is clear is that we cannot continue to coast along with the current approach.”
Apart from its expertise built on 50 years of rapid urbanisation, Mr Wong said Singapore is also home to high-quality professional services including project advisory, consultancy, financing, dispute resolution and legal services - all of which “are necessary to bring infrastructure projects into being”.
“We have an ecosystem that integrates infrastructure players along the entire value chain – be it architecture and engineering, multilateral banks, private financiers as well as other professional services.”
Mr Wong added that 60 per cent of projects in Southeast Asia are financed through Singapore-based banks, thanks to the high number of banks that do project financing in the country.
But he also said that projects in Asia should not just look to the banks for financing, as they face tightening credit rules and raise interest rates. He added that the world remains in a relatively high liquidity environment, with many funds available at zero, low or even negative interest rates.
“One of the ideas we’re exploring now is to look at a take-out facility where we go into brown-field projects that the banks have funded, we take them out of their balance sheets so they can be funded through other funds from institutional investors, insurance companies, thereby freeing up bank capital to fund new projects,” he added.