Room for institutional investors to play larger role in infrastructure finance: DPM Tharman

Deputy Prime Minister Tharman Shanmugaratnam.
Deputy Prime Minister Tharman Shanmugaratnam.PHOTO: IES

SINGAPORE - There is room for institutional investors to play a much larger role in financing infrastructure projects, Deputy Prime Minister Tharman Shanmugaratnam said at a conference on Tuesday morning (Oct 20).

There is significant scope for infrastructure to grow as an asset class for institutional investors such as pension funds and sovereign wealth funds, he noted.

Mr Tharman was speaking at the World Bank-Singapore Infrastructure Finance Summit, which is organised annually and is now in its sixth iteration.

Only about 3 per cent of institutional investors' assets under management currently goes towards infrastructure, and an even smaller percentage towards infrastructure debt financing.

Mr Tharman said Singapore's central bank has been working with financial institutions to develop infrastructure as a more attractive asset class for institutional investors.

These include efforts to develop standardised measures of performance and risks for infrastructure projects, to reduce perceptions of non-commercial risks.