The Association of South East Asian Nations (ASEAN) is a unique regional collaboration of ten member countries which have diversified social backgrounds and are at different developmental stages. Despite the differences, one common point that links all these countries is the need for infrastructure development. While various plans have been initiated at the ASEAN level to accelerate infrastructure development, significant gaps still exist, with the Asian Development Bank (ADB) estimating that ASEAN’s total infrastructure funding requirements from 2016 to 2030 are between US$2.8 trillion (baseline estimate) to US$3.1 trillion (climate-adjusted estimate). The current arrangement predominantly relies on the government as the main actor in initiating and funding the projects given the inherent nature of infrastructure as a public good, with less emphasis on the role of the private sector and capital markets to support regional development.

This report aims to address some of these gaps in capital market-based financing mechanisms for ASEAN infrastructure development which can serve as a basis for further discussions and analysis by policymakers and relevant stakeholders. Despite the COVID-19 pandemic posing a threat to the region’s economic outlook, it also acts as a key catalyst to recalibrate the way the region tackles their current challenges and to move forward together in the post-pandemic period.

This paper has been structured to provide an overview of seven recommendations, whereby the first two recommendations are key building blocks for the new financing mechanism in ASEAN. The two recommendations are:

(i) The formation of ASEAN Infrastructure Financing Framework (AIFF), and
(ii) The creation of ASEAN Long Term Infrastructure Investment Fund (ALTIIF)

Click below to download the full report.