S'pore as global hub for infrastructure finance

THE global infrastructure finance market will grow to US$9 trillion by 2025, according to projections by PricewaterhouseCoopers (PwC), with half of that amount accounted for by emerging markets. This is three times greater than the current notional size of the global over-the-counter (OTC) market in commodities and equity-linked instruments combined.

Global projections of real GDP growth point decisively towards a shift to the rapidly urbanising emerging markets, which predominantly are in Asia. Major Western economies, accounting for 58 per cent of global GDP in 2000, are expected to account for less than 42 per cent by 2030. In contrast, Asia/Oceania's share of the global pie will jump from 22.4 per cent to 36 per cent over this same period. Emerging Asia's share of infrastructural spending is expected to grow from 30 per cent to 48 per cent from 2012 to 2025.

Sovereign wealth funds (SWFs) are the key investors in infrastructure. Asian SWFs dominate the infrastructure asset class with China leading, followed by Abu Dhabi, Singapore, Kuwait and South Korea.