ADB expands Singapore presence to draw more private capital into Asian projects

[SINGAPORE] The Asian Development Bank (ADB) is strengthening its presence in Singapore as it steps up efforts to channel more private capital into Asia’s infrastructure and development projects. This comes amid a widening gap between the region’s financing needs and available public-sector resources.

The lender doubled its specialists in Singapore last year to around 30, as it works towards its target of US$13 billion annually in private capital by 2030.

In an interview with The Business Times, Isabel Chatterton, ADB’s director general for private-sector operations, said Singapore offers an “unparalleled first-row seat” to conversations with investors, helping it match their financing requirements with projects across the region.

ADB’s private-sector financing rose from US$6.8 billion in 2024 to US$8.5 billion last year, with Chatterton expecting the figure to rise further this year.

“We are likely to deliver (more) than 8.5 billion,” she said.

What investors want 

A key challenge is bridging the gap between what investors want and what the region needs.

Different investors have varying expectations of risk and returns, making it difficult to depend on any single source of capital, said Chatterton.

Institutional investors and pension funds, for example, are looking for long-term returns that match their long-term liabilities, while sovereign funds may have more flexibility but require well-prepared projects with sound governance.

Private equity investors coming through Singapore, on the other hand, require a fixed or visible investment period with a target return and a very clear exit from the beginning, she said.

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Chatterton also sees potential for family offices to play a larger role in financing regional development.

“We have been very encouraged by the significant growth… of family offices in Singapore,” she said, adding that ADB has been approached by family offices interested in major regional initiatives.

Among these is Singapore’s multibillion-dollar master plan to import 6 gigawatts of low-carbon electricity by 2035, which could help underpin the broader Asean Power Grid.

Investors typically look for a long pipeline of bankable projects even as their risk appetites vary.

To meet these needs, ADB has been developing a pipeline of bankable projects, as well as helping to de-risk them through financial structuring and blended finance, she said.

To give investors greater visibility into upcoming deals, ADB signed a master framework agreement with 12 global insurers, providing US$2.5 billion in predictable capacity to share investment risk with ADB.

Diverse markets

Despite growing interest in Asia, foreign investors are primarily interested in “investment-grade” markets, said Chatterton.

“But gradually, as they get more comfortable, especially if they are accompanied and guided by… ADB, we are able to reduce that confidence gap so that they feel a bit more comfortable stretching themselves,” she said.

She observed that the preference is for investment periods of often around seven to eight years.

Markets of interest include India, given the market size, relatively stable and clear regulations, and sophisticated corporate sector, she said.

In South-east Asia, she noted that Thailand and Vietnam have also been of interest, while the Philippines has also been increasingly appealing following regulatory reforms in the past few years to enable foreign investors to come into the market.

Energy transition and circular economy projects are among the key areas that investors are looking for, alongside digital businesses such as agricultural, education and insurance technology.

ABD created its own digital office a few years ago, to look at different ways to support financing opportunities in critical infrastructure projects, energy and agriculture, the digital payment ecosystem, artificial intelligence and cybersecurity.

One outcome that emerged was the financing of data centres in Malaysia this year with Sime Darby, the first time an Islamic finance instrument known as sukuk was used to finance data centres.

Singapore’s role set to grow

With the volatility in the markets, more investors are looking beyond Europe and North America to Asia.

In August this year, Standard Chartered and ADB mobilised a US$721 million loan for HDBank. The facility marks the largest syndicated social financing raised by a Vietnamese bank to date.

Through this social loan, ADB introduced 15 new funders to HDBank – a milestone Chatterton described as “extremely transformational”.

She also cited a US$500 million syndicated loan in India as an example of the complex financing arrangements that Singapore-based financial institutions can help deliver.

Moving forward, ADB expects itself to play a “very active role” in supporting the Singapore next year in the chairmanship of Asean.

Priorities include bringing in capital and bridging the mismatch between currency and financing, she said.

“I definitely foresee an increasing role, without a doubt, and I would foresee, of course, (an) increasing number of stakeholders having presence in Singapore,” she said.

“I think that’s definitely going to continue.”