Investing in the ASEAN infrastructure asset class

Infrastructure Series Report 3

The financing gap or inability to match demand for infrastructure with necessary sources of financing can hinder the delivery of any infrastructure project. While government spending has traditionally been the main source of infrastructure financing, investments from the private sector are increasingly playing a bigger role in helping to bridge the infrastructure gap in ASEAN.

In this third report of our three-part Infrastructure Series, we look at infrastructure as an attractive asset class – and how it compares with other asset classes – while we explore the infrastructure investment landscape and financing developments. We also examine the various challenges faced by infrastructure investors, how to address these challenges and what are the emerging trends in infrastructure investment.

Infrastructure as an asset class is maturing and gaining popularity

Alternative sources of infrastructure financing have developed over time as investors seek new ways of generating returns on their capital. Infrastructure investments are gaining popularity as an attractive asset class for institutional investors who favour long-term, stable cash flows that provide protection against inflation. Our full report examines the growth in this asset class, its historical returns, the profiles of various infrastructure investors and key factors that influence their investment decisions.

Emerging trends shaping the future of infrastructure investment

The infrastructure market and its investment trends are evolving. Megatrends such as technological advancements and demographic shifts across ASEAN are fuelling demands for new infrastructures with a strong focus on sustainability. Correspondingly, investors, governments, developers and other market players are broadening their investment and financing horizons to seize opportunities and catalyse growth. Our full report examines key evolving trends that will define the future of infrastructure investment

Where there’s a will, there’s a way: Addressing the challenges in infrastructure investment

While it is clear that the infrastructure investment market in Asia is rich in potential, it is also clear that there are many challenges that first must be overcome in order to fully realise this potential. These include:

Uncertain legal and regulatory frameworks
Limited availability of exit options
Inequitable risk allocations

With this in mind, governments, multilateral agencies and capital markets all play strategic roles in helping to address these challenges and facilitate private sector investments into infrastructure. Our full report dives into their strategies and tactics to sustainably develop the infrastructure investment landscape.