ASIFMA and ICMA have released a “Guide to Infrastructure Financing in Asia”, the first guide of its kind to outline how infrastructure projects can be financed in Asia including through the capital markets.
It is intended to help public authorities, project sponsors, project promoters and issuers interested in raising debt for infrastructure projects in Asia.
The guide is designed to provide practical guidance on raising debt finance through banks and the capital markets, taking into account planning and procurement issues in the transaction process. In particular, the guide focuses on the debt component of financing, rather than equity, and describes the relative merits of the bond markets and bank financing; certain considerations to be taken into account by public procurement authorities and private sector entities; and considerations relevant to procurement and planning.
While not specifically written for investors, this guide also sets out key credit considerations for project bond investors.
Contributors to the guide include experts from AIA, BlackRock, Clifford Chance, Credit Suisse, JP Morgan, Moody’s and Société Générale, in addition to ADB, AIIB, CGIF and IFC.
Mark Austen, CEO of ASIFMA, says: “We believe that the guide will provide highly practical and timely information for funding the immense amount of infrastructure required in Asia in a challenging environment for bank lending and capital markets in a post GFC reforms world.”
Martin Scheck, chief executive of ICMA, says: “There is a lot of scope for private investment in infrastructure projects in Asia, which has been hindered by a variety of uncertainties and a lack of detailed understanding of the financing process. The guide will undoubtedly provide much-needed clarity surrounding financing options across Asia, while helping to grow and diversify the investor base for infrastructure assets.”
Nicholas Wong, co-head of Clifford Chance's Worldwide Projects Group, adds: "The capital markets are going to be an increasingly important source of long term debt funding for large scale infrastructure projects as bank lending capacity comes under increasing pressure due to tightened global capital requirements. We are excited to be able to draw on our global experience to contribute to this guide and to bring innovation and diversified liquidity to the region, which has such a huge need for new infrastructure. This guide will serve as an important reference for governments, sponsors, underwriters and investors alike."
Gavin Munro, head of infrastructure finance for Asia Pacific, Société Générale Corporate & Investment Banking, says: “With Asia’s growing infrastructure needs to match its ongoing economic development, the guide will be a useful source of reference for public and private sector entities in identifying and understanding funding options for infrastructure assets. Société Générale is pleased to contribute to the development of the guide with our long-standing experience in infrastructure finance in the region.”