Delivering quality and sustainable infrastructure has been made more challenging with the Covid-19 pandemic, and will be even more complex due to climate change and rapid urbanisation.
But there are opportunities for partnerships and co-creation among governments, multilateral development banks and the private sector, said Minister in the Prime Minister's Office Indranee Rajah.
She was delivering a keynote address at the Asia Infrastructure Forum yesterday at Marina Bay Sands Expo and Convention Centre.
Held in a hybrid format this year due to Covid-19, the event - jointly organised by the Ministry of Finance, Enterprise Singapore, Monetary Authority of Singapore (MAS) and Infrastructure Asia - drew more than 2,000 participants.
Ms Indranee, who is also Second Minister for Finance and National Development, said Covid-19 has led to an almost 4.5 per cent drop in global economic growth.
In Asean last year, all countries experienced a fiscal deficit at an average of 7.6 per cent of gross domestic product.
"Asian governments and multilateral development banks have identified infrastructure as an important means of achieving economic recovery through increased access to financial flows, boosting construction activity and employment. To that end, some are proactively accelerating their infrastructure development," she said.
"Additional investments through public-private partnerships would be a welcome source of liquidity as countries continue to devote resources to battle the pandemic."
Outlining ways for Asia to mobilise private capital, Ms Indranee said the first step is to overcome barriers in attracting such funding. One key hurdle is the lack of a common language on green finance, to provide clarity and confidence.
She added that in Singapore, the Green Finance Industry Taskforce convened by MAS is developing a taxonomy that sets out definitions and criteria for activities that can be considered green, or in transition towards green.
The nation is also actively participating in Asean efforts to develop a regional taxonomy that caters to the varying developmental stages of each member state.
There is also a need to better understand the climate risk characteristics of infrastructure assets, she said, noting that there is "currently little data available".
She noted that Singapore is well placed to support sustainable infrastructure. It is Asean's largest green finance market, accounting for about 40 per cent of green bond and loan issuances last year.
Given that governments have diverted resources to combat the pandemic, driving regional sustainable infrastructure requires public-private tie-ups and deeper collaboration between governments and international financial institutions, she added.
As governments look to tap private funding, they can "consider engaging the private sector to better understand their considerations and risk appetite".
The early involvement of governments, project owners and stakeholders could result in stronger co-creation and bankable projects, Ms Indranee noted.
"This creates a shorter runway and reduces the risk premium of projects, thereby lowering the borrowing costs of project developers."
She cited the Phnom Penh Logistics Complex, which Singapore's YCH Group will design, develop and operate; and Infrastructure Asia's partnership with Japan's Ministry of Land, Infrastructure, Transport and Tourism to support the development of smart cities, roads and bridges in Asia.
The forum also saw the launch of the Asia Sustainable Infrastructure Advisory Panel. Chaired by Ms Indranee, it aims to build up the region's knowledge by sharing the latest trends, ideas and best practices.