Asia’s need for infrastructure is more urgent than ever, as economies expand rapidly and the population of urban residents rises by a staggering 1.4 billion in the next two decades. This means more roads, more homes and more physical facilities.
There are plenty of projects in the pipeline. China’s Belt & Road Initiative (BRI) – a landmark project that aims to connect over 4.4 billion people across Asia, Europe and Africa - is the region’s largest and most ambitious initiative. Governments and firms are collaborating on urban solutions and transport infrastructure projects as they seek to boost trade flows and connectivity.
With investment in infrastructure both a priority and necessity for Asian governments, there are numerous opportunities for your business. Find out how you can capitalise on Singapore’s strengths as an infrastructure hub to invest in this booming sector.
Successful infrastructure projects require a comprehensive ecosystem that brings the key players together – ranging from governments, banks, developers and uction companies. They all have critical roles to play in creating a conducive environment to transform an infrastructure project from an idea into reality.
Singapore is home to a thriving knowledge and research community. By studying infrastructure risks and opportunities, the community helps to mitigate structural bottlenecks and support regional capacity building.
Singapore has numerous world-renowned developers which are able to take on and complete complex projects. Our Engineering, Procurement & Construction (EPC) players have a wide range of technical expertise. These companies are highly regarded within the industry. From building multiple industrial parks in Vietnam to masterplanning for a brand new capital city in India, companies such as Sembcorp and Surbana Jurong are renowned for their quality around the world.
Beyond technical expertise, good financial and legal support is crucial in ensuring the success of infrastructure projects. Singapore’s infrastructure players have the benefit of a wide array of professional support, including advisory services in the legal, financial, technical and transactional fields.
We have a strong network of professional services ecosystem, coupled with a cosmopolitan talent pool and a trusted legal framework. Singapore is also a preferred venue for dispute resolution – we are among the 5 most preferred arbitration seats in the world1.
As Singapore is a signatory to the New York Convention, our arbitration awards are internationally enforceable. Besides arbitration, we also offer litigation (Singapore International Commercial Court) and mediation (Singapore International Mediation Centre) services.
Singapore’s advisory firms have an expansive network of experts to assess the feasibility of complex projects. They are able to take into account the various stakeholders’ concerns – investors’ need for returns on capital, governments’ social objectives, developers’ commercial considerations – and provide objective evaluations of projects. This process ensures projects are more bankable, and increases the chances of success.
With a project cost of S$1.33 billion, the Singapore Sports Hub is one of the largest sports public-private (PPP) projects in the world. It saw the construction of a national sports stadium (capacity of 55,000), swimming complex (capacity of 6,000), indoor stadium, water sports centre and shopping mall. The project company operates and maintains the venue on a 25-year concession, and revenue includes both a fixed availability payment and a share of the commercial revenues.
PwC acted as the lead financial advisor to the government, and led other legal, technical and operational consultants in the advisory consortium. This deal won numerous awards in 2010, including Deal of the Year by Euromoney and Asia Pacific PPP Deal of the Year by PFI.
1: Ministry of Finance (MOF) Singapore, 2016
Another key pillar of Singapore’s ecosystem lies in our ability to finance complex projects. As the largest foreign exchange centre in Asia, Singapore can offer you a wide range of foreign exchange and interest rate hedging solutions to meet various project needs. We also have a growing pool of infrastructure fund managers and institutional investors with interest in Asia-Pacific infrastructure investment opportunities.
You can count on a wealth of expertise when looking to invest in infrastructure projects around the region. We are also home to many specialised insurance companies offering political, credit and energy risk insurance to help project stakeholders manage their risk appropriately.
Singapore is also a growing hub for debt restructuring. We provide businesses in the region with a convenient base which combines efficiency, expertise and a clear and certain legal framework, from which they can coordinate a multi-jurisdictional restructuring. We are also taking steps to strengthen ourselves as an international debt restructuring centre. This includes the enhancing the legal framework for restructuring, creating a restructuring-friendly environment, and increasing the availability of rescue financing2.
2: https:// www.todayonline.com/singapore/singapore-makes-good-start-its-debt-restructuring-ambitions
Singapore has strong ties with multilateral banks (MDBs) such as the World Bank Group and Asian Development Bank. Through initiatives such as the Global Infrastructure Facility and Asia Infrastructure Centre of Excellence, Singapore works with these MDBs to provide financing for more bankable projects. In light of growing infrastructure demand, governments and development agencies are also exploring public-private partnerships (PPP) to access private capital and tap private sector expertise to deliver projects.
Policies and regulations are fundamental to the infrastructure sector’s development. Singapore’s commitment to an open and progressive economic strategy significantly increases a project’s bankability. For example, the Monetary Authority of Singapore (MAS) is taking steps to improve investor access in securing funds for projects. It is piloting an infrastructure debt takeout facility that will allow institutional investors to take over debt from banks in a structured manner. This would increase capital inflow and allow banks to recycle their capital to fund greenfield projects.
Singapore’s strategic location within Asia is an advantage for local firms wanting to expand to the region. With a seven-hour flight radius to most Asian markets and over 6,800 weekly flights to over 80 countries around the world, Singapore’s connectivity makes it a natural location to coordinate projects. There is also little time difference between Singapore and most Asian markets, allowing important decisions to be taken swiftly.