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Singapore to be investment broker for Asia's infrastructure
SINGAPORE plans to spur investment in much-needed infrastructure in South-east Asia by helping to structure projects to make them more "bankable", a senior official has said.
A government agency called Infrastructure Asia has been set up to connect the "supply and demand" for these projects, Indranee Rajah, Singapore's Second Minister for Finance, said in an interview on Monday with Bloomberg Television.
The Asian Development Bank estimates developing economies in Asia will need to invest about US$26 trillion in infrastructure projects until 2030, or US$1.7 trillion a year. Ms Indranee noted that currently, only about US$880 billion is being spent annually.
"So you need to mobilise capital, you need to connect the demand and supply and make the projects bankable," she said. "We figured that Singapore can play an important role in this."
China's massive funding of road, rail and other infrastructure projects in South-east Asia has raised concerns about the region's over-reliance on the world's second-largest economy, and more countries have been looking at home-grown solutions to attract investors. As a regional financial hub, Singapore officials have increasingly billed the city state as a conduit for that kind of investment.
Ms Indranee said: "China has clearly identified a need. There is a demand out there. And for countries who need infrastructure, the key thing - it goes back to what I said earlier: bankability.
"So if you're able to structure it right, such that the income stream, the revenue that comes in, enables you to pay off your loan or whatever financing you've taken, then the project will be fine and it's win-win for all."
She added that global trade tensions are a key risk to the economy and urged countries to find a solution that benefits all. "From the Singapore perspective, we strongly support a multilateral approach," she said. BLOOMBERG