The Australian government and the Association of Southeast Asian Nations have agreed a joint initiative that will “develop a pipeline of high-quality infrastructure projects, to attract private and public investment and improve regional connectivity”, according to a statement from the Department of Foreign Affairs and Trade.
The ASEAN-Australia Infrastructure Cooperation Initiative will also entail creating a link between the Sydney-based Global Infrastructure Hub and ASEAN to “increase collaboration between the public sector and private investors towards funding ASEAN infrastructure projects”.
“We want to help countries make good choices [about what infrastructure to build] and to make sure the private sector understands those projects,” GI Hub chief executive Chris Heathcote told Infrastructure Investor.
Launched by the G20 in 2014, the GI Hub’s mandate is to grow the global pipeline of quality, bankable infrastructure projects, by facilitating knowledge sharing, highlighting reform opportunities and connecting the public and private sectors. All countries, regardless of whether or not they are members of the G20, are able to work with the non-profit.
“We’d like to help governments understand what infrastructure they should be building, to build it more efficiently and whether it’s a good candidate for the private sector to get involved in,” Heathcote explained.
This will include adding ASEAN projects to the GI Hub’s existing global infrastructure pipeline, he said, “making sure that they are available for the private sector to see”.
Heathcote welcomed the initiative, describing it as a “very strong recognition” from regional governments that creating the right infrastructure was vital to supporting economic growth.
“It’s important [for the government] to specify what the initiative will be, quickly, and make it clear what it hopes to achieve. We need investable projects as soon as possible. The current environment of low interest rates, with lots of available capital, won’t last forever,” he said.
The initiative was announced as part of the ASEAN-Australia Special Summit 2018 held in Sydney last week.
The Australian government has committed A$4.4 million ($3.1 million; €2.5 million) to the initiative, which will commence early this year and run for 18 months. It will be implemented by the World Bank, according to a DFAT spokeswoman.
“The ASEAN Australia Infrastructure Cooperation Initiative will fund the development of a rolling pipeline of infrastructure projects that are: well-designed to attract sustainable private and public financing, including from major multilateral banks; needs-based and of significant value to regional connectivity; and open and transparent to maximise a level playing field for businesses,” the spokeswoman added.
It is estimated that up to A$4.2 trillion of infrastructure investment is needed across the ASEAN nations between 2016 and 2040 to support economic growth.