Bindu Lohani, vice president of finance and administration at the Asian Development Bank (ADB), spoke today of “great room for participation” for private capital in Asian infrastructure.
Lohani said there was an opportunity to invest in infrastructure maintenance, an area not many investors are focused on at present and where government spending was not sufficient.
He also said there were opportunities in renewable energy, including energy efficiency, solar and wind. In the solar sector, for example, he pointed to new developments such as the creation of a feed-in tariff mechanism in Thailand.
Lohani also pointed to opportunities to invest in cross-border infrastructure, pointing to increased regional cooperation in the sharing of resources, knowledge and services. Examples included road projects linking countries within the region and Asian countries selling energy to each other.
He also called for greater involvement of local governments in Asian infrastructure and said that the region could learn from the early days of municipal bond funding in the US. It was an area that was being looked at, he added.
Lohani said the ADB was also looking to develop the capital markets in ways beneficial to infrastructure investors. He said there are “a lot of pension funds we should be tapping” and that new initiatives had been launched including local currency bonds to eliminate currency risk, thematic bonds so investors could dedicate resources to “what they believe in”, and a new credit guarantee investment facility.