SINGAPORE - Infrastructure consultancy Surbana Jurong is joining hands with the Credit Guarantee & Investment Facility (CGIF) to boost the use of local currency-denominated projects bonds, in a move that is aimed at increasing the number of bankable infrastructure projects in South-east Asia.

CGIF is a multilateral facility set up by the Asean countries, China, Japan and South Korea - collectively known as Asean+3 - and the Asian Development Bank to develop and strengthen local currency and regional bond markets in Asean.

Under the partnership, Temasek Holdings-owned Surbana will provide technical assessments to validate the time, cost and quality aspects of selected greenfield infrastructure projects that aim to issue project bonds with the support of CGIF's Construction Period Guarantee, announced the two parties in a joint statement on Wednesday.

CGIF will then offer irrevocable and unconditional credit guarantees to projects with robust construction programmes, as screened by Surbana. These guarantees can stretch up to US$140 million (S$194.2 million) equivalent for each single greenfield infrastructure project to facilitate the issuance of long term local currency bonds.

CGIF's Construction Period Guarantee, launched in July last year, is designed to frame risks associated with the construction period within acceptable levels for conservative long-term investors to consider greenfield project bonds.

Mr Kiyoshi Nishimura, chief executive of CGIF, said: "For many conservative long-term investors, construction risk has been the key impediment keeping them from supporting the build-up of infrastructure assets despite their natural appetite for long-term bonds.

"This collaboration marks an innovative attempt to bring to the market high-quality greenfield project bonds where construction risks have been adequately appraised and mitigated as guided by the engineering prowess of a firm like Surbana Jurong and backed by CGIF's guarantees."

Surbana group chief executive Wong Heang Fine added: "For a country to develop and grow, infrastructure development is key. However, perceived risks in such projects in Developing Asia deter investors, and infrastructure development is, in turn, often severely hampered.

Mr Wong noted that the collaboration between Surbana and CGIF - believed to be the first such partnership in the region - allows them to develop a robust construction risk assessment and mitigation framework that will provide assurance to new investors in greenfield infrastructure project bonds as well as boost infrastructure investment in Asean.

"This complementary partnership with CGIF allows us to now offer a new dimension of financing solutions for our infrastructure project pipeline. We believe we are the only player in our industry to offer such a solution," he said.