Singapore is working to develop infrastructure as an attractive asset class, and "crowd in" institutional investors. There are three initiatives where Singapore is actively seeking to make a difference.
PROMOTING CONSISTENT PROJECT DOCUMENTATION TO REDUCE RISK
Investors often shy away from infrastructure projects because non-commercial risks are often left open-ended in contracts.
Singapore is working with the World Bank to promote the adoption of standards and provisions in regional public-private partnership (PPP) projects that will help attract private investors.
CREATING QUANTITATIVE MEASURES ON THE EXPECTED PERFORMANCE AND RISKS OF INFRASTRUCTURE ASSETS
Institutional investors have found it difficult to scale up their infrastructure exposure because of a lack of data that can be used to measure performance and risks of such projects.
To this end, the Edhec Business School's research arm in Singapore will build on its fundamental research on infrastructure asset pricing to create performance benchmarks for long-term infrastructure debt and equity investments.
DEVELOPING INFRASTRUCTURE DEBT AS A SIGNIFICANT ASSET CLASS FOR INSTITUTIONAL INVESTORS
There is an opportunity to promote more seamless transfer of infrastructure debt from banks (which specialise in shorter-duration, higher-risk financing early in a project's life cycle) to institutional investors (which tend to prefer mature projects with stable cash flows). The Monetary Authority of Singapore is consulting the industry on setting up an infrastructure debt takeout facility to ease the transfer of infrastructure debt from banks to institutional investors.