Singapore is working to become ‘Asia's Infrastructure Exchange'

Asia is forecast to need US$20t of additional infrastructure investments from now till 2030.

Recognising the critical demand for infrastructure in the region, Singapore is launching itself as the infrastructure hub of Asia, senior minister of state for law and finance Indranee Rajah said.

Speaking at the Asia-Pacific Energy & Infrastructure Finance Forum, the minister said the country is working to develop Singapore as the go-to place where infrastructure demand and supply can connect, dubbing the city-state as Asia's Infrastructure Exchange.

"In our 50-year journey of urbanisation Singapore has accumulated expertise in planning, executing, and operating infrastructure over a wide range of sectors, including energy, water, waste management, transport, housing, and ports," she said.

From now till 2030, Asia is expected to require US$20t of additional infrastructure investments to meet this growing demand.

"This is the equivalent of developing the infrastructure needed to support the population of one Singapore every week! That’s the magnitude of the infrastructure demand in Asia," the minister said.

However, she said there is a need to bridge the bankability gap, as this caused many projects to not get off the ground even with the massive demand.

"If a project is deemed as neither bankable nor investible, it means that banks will not lend and investors will not put in the money, as they cannot get back sufficient returns within a reasonable time frame or the risks are just too high. Take for example a Public-Private Partnership (PPP) project for a power plant. The project will not be bankable if the concession period is too short, or the tariffs are set too low such that the private company is unable to recover their capex cost and make a decent return on investment," she explained.

This is the rationale behind Singapore positioning itself as the infrastructure hub of Asia. Rajah said the city-state's strategic location in the region and its strong position in world capital markets make Singapore an ideal place to develop bankable projects to mobilise private sector and institutional investments.

"Moreover, Singapore-based banks have a deep understanding of Asia’s infrastructure needs and have extensive track records of working with regional governments and State Owned Enterprises on projects ranging from power to water and in the transportation sectors," she added.