Lohani hails private capital opportunity in Asia

Speaking at the Infrastructure Investor: Asia conference in Singapore, Bindu Lohani, of the Asian Development Bank, outlined areas where private capital could play a greater role and spoke of moves to make the region's capital markets more attractive.

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. 

Bindu Lohani

Lohani, who delivered the keynote speech on the opening morning of PEI Media's Infrastructure Investor: Asia conference in Singapore, said the infrastructure funding gap in the region was “quite pronounced”, with $750 billion a year needing to be spent over the next decade. For the region's lower and middle income countries, this spending requirement translates to around six to seven percent of gross domestic product (GDP).
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.