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SINGAPORE: British lender Standard Chartered said that ensuring fair risk and fair returns are the main things that investors look for when they study infrastructure investments in the region.
Conor McCoole, head of Project & Export Finance, Asia, Standard Chartered Bank said: "A sound risk allocation structure and a fair risk and reward is what will drive it (infrastructure investments).
"So if you could reset your expectations to deliver that, then I can tell you there is no shortage of private capital, no shortage of infrastructure equity funds, no shortage of bank debt for the right projects. And what sponsors would ask most of all, is this one stop shop, a streamlined approach."
At a panel session during the World Bank-Singapore Infrastructure Finance Summit, StanChart said that issues like the structural framework, the availability of international infrastructure equity funds, or even political risk, come secondary to fair returns.
Economies like Indonesia, Mongolia and Vietnam also presented plans for their own infrastructure needs, with public works like road building top on the list.
However, these economies also noted that costs are very high. For example, Indonesia estimated that the government budget can only provide less than 30 per cent of total financing required for projects in the country.
"Over the next five years, we need about US$140 billion to meet the financing needs for infrastructure. Both state budget and local government budget provide less than 30 per cent of the financing needed," said Anggito Abinmayu, head, Fiscal Policy Office, Indonesia Ministry of Finance.
"All these infrastructure projects cannot be done by our government resources itself, because our budget is around 40 per cent of GDP. Even with a bigger budget, we will not be able to do this kind of thing," said Balgan Batbayar, director general, Finance & Economic Policy, Mongolia Ministry of Finance.
- CNA/sc
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