Suchergebnisse

This report discusses key issues around the mobilization of private capital for development. Investment requirements are huge, especially for infrastructure, climate and other SDG-related investments. External finance for developing countries stagnated in the years before the pandemic, followed by a major setback in 2020/2021. The focus is in particular on institutional investors, whose exposure to less-developed countries is still very low, even more so in unlisted assets and projects. There is a potential for progress as asset owners seek new diversification opportunities in growth markets. The main burden is on governments to create favourable business conditions for investable long-term assets. Policy makers, development finance institutions and investors should utilize the full spectrum of investment vehicles - commercial, impact and blended finance.

This study evaluates infrastructure investment and finance in Asia from a global perspective. It provides an overview on infrastructure needs and the various sources of private finance, globally and within Asia, and creates a "bigger picture" for the demand and supply of capital for infrastructure by using a simple framework, i.e., percentages of gross domestic product. The picture is expectedly not uniform across Asia, but some interesting features emerge from global comparisons. Overall, the private sector still plays a relatively subdued role. Bank loans dominate private infrastructure finance, and there is much scope for the further development of capital markets. The volumes of listed and unlisted investment instruments, of project finance and of public-private partnerships, are still small in relation to investment needs and well below the global average. However, there are some notable exceptions. Institutional investors are widely seen as a new financing source for infrastructure. There are some distinctive features in Asia, such as the prominence of large pension reserve funds and sovereign wealth funds, and comparatively weak private long-term savings institutions. The current asset allocation to infrastructure by domestic investors is overall very low, and the attractiveness for foreign investors still sub-par. Expectations on the future involvement of investors in this field should be realistic, and there are barriers and risks that need to be worked on. Asian governments can take steps to attract more private capital.