Our thinking

Cutting through the noise: Infrastructure in Asia-Pacific 2019

What's inside

From rural farmlands to modern megacities, the complex and diverse Asia-Pacific infrastructure sector continues to attract international investment. Our survey shows investors are very positive about future opportunities and analyses the countries and sectors attracting this optimism.

Executive summary

The Asia-Pacific infrastructure market is open for business and opportunities abound. However, as our exclusive survey reveals, the prevailing wisdom on sentiment, regions and sectors may be wide of the mark.

Asia-Pacific (APAC) is one of the most dynamic regions on the planet and its need for infrastructure investment is acute. The Asian Development Bank (ADB) estimates that the region needs US$1.7 trillion of infrastructure investment by 2030 to keep pace with climate change and economic growth.

With these sentiments in mind, White & Case, in association with Inframation Group, set out to investigate the prospects for infrastructure investment across the APAC region. We interviewed 100 global senior executives from institutional investment firms, private equity houses and investment banks to gauge their views on the current infrastructure investment opportunities.


In Q4 2018, White & Case, in partnership with Inframation Group, surveyed 100 senior-level direct equity investors and financial services firms who had developed, funded or invested in at least one APAC infrastructure project in the past 12 months, with a value in excess of US$100 million.

Respondent firms include investment funds, sponsors and developers, pension funds, sovereign wealth funds, investment banks and financial institutions. Of those surveyed, 50 respondents were based in APAC, 25 were based in EMEA and 25 were based in the Americas.

The survey included a combination of qualitative and quantitative questions, and all interviews were conducted over the telephone by appointment. Results were analysed and collated by Inframation Group, and all responses are anonymised and presented in aggregate.

The research has proven to be illuminating, as a number of the findings have gone against the grain of current popular thought. Among other key findings, several intriguing themes have emerged:

Regional positivity trumps global uncertainty

Despite the infrastructure gap, the threat of trade wars and global political instability, the outlook from respondents is overwhelmingly positive—88 per cent of firms are expanding their teams in the region in 2019. Nobody is predicting any contraction.

Roads lead the way

If 2018 was the year for investment in renewable energy, then 2019 appears to be the one for transportation—in particular, roads. In spite of the clamour around other infrastructure sectors, roads are seen as the key infrastructure sector destination—67 per cent are planning to invest in the sector.

Stable income beats risky returns

Respondents’ choices for top investment destinations cut through recent noise about the rise of some developing APAC countries. According to our survey, investors will be concentrating their activity on larger, more stable countries such as Australia, India and Singapore. APAC countries with perceived higher political/systemic risk such as Sri Lanka, Pakistan and Vietnam appear to have drifted down the priority list as investment destinations for many investors.

Opportunity knocks

Above all, investors see APAC as a land of opportunity. Indeed, when asked about the greatest benefits to investing in the region, opportunity crops up in a number of different guises. Over half see a ’wealth of opportunity‘; more than a third envisage ’development of knock-on/secondary opportunities’, and a third are looking forward to the ’consolidation of related opportunities‘.

The research also addresses barriers to investment such as political risk, issues with public private partnerships (PPP) and the threat of trade wars but, overall, the general feeling among respondents is that the significant benefits on offer outweigh any challenges. As the director of M&A from a sponsor in Japan says: ’There is plenty of room for growth, development and advancement. There is a complete mismatch in the current infrastructure and the actual need based on the growth these markets are having. The opportunities in these markets are significant.’


Paul Harrison
Partner, Tokyo

Matthew Osborne
Partner, Singapore

Adeline Pang
Partner, Melbourne

Josh Sgro
Partner, Melbourne

Video: Cutting through the noise: Infrastructure in Asia-Pac

Partners Adeline Pang and Josh Sgro discuss the outlook for infrastructure in Asia-Pacific based on the survey of 100 decision makers in the market.

View this video on its own page

Cutting through the noise

The overwhelming majority of respondents see a multiplicity of opportunities in a variety of sectors and regions. However, our survey reveals that the ‘noise’ around some investment locations may be just that—noise.

Sector watch

While investors are looking at a variety of sectors in the region, our survey reveals that roads are the top priority, while both conventional and renewable energy are still very much on the radar.

Risky business

The rewards for infrastructure investors in APAC can be lucrative, but the region is not without its risks—particularly political ones.

Fundraising: Public and private

There has been a growth in the number of funds targeting the APAC infrastructure market as investors seek out greater returns. Meanwhile, public-private partnerships are likely to increase if they can overcome several systemic barriers.

The outlook for Asia-Pacific infrastructure

Risks may persist around infrastructure investment in APAC, but the overall outlook is very positive.

Risky business

Risky business

The rewards for infrastructure investors in APAC can be lucrative, but the region is not without its risks—particularly political ones

4 min read

Politics and policy issues often break infrastructure projects and restrict private investments. If governments lack authority, they are thus restricted in taking clear decisions

Results from our survey are remarkably consistent on the challenges and risks faced by infrastructure projects across the region. Nearly two-thirds (59 per cent) of respondents consider political risk to be the biggest threat to project success. This may stem from governments inexperienced with large-scale projects or dealing with foreign private investors; unstable regimes; or the slow pace of project implementation, which is a common criticism in APAC.

An example of politics halting infrastructure’s progress was seen in the postponement of the construction of the Kuala Lumpur and Singapore High Speed Railway in September 2018. The project’s delay has come in the wake of the new Malaysian government of Mahathir Mohamad initiating efforts to reduce the country’s debt burden with cuts in spending.

’Politics and policy issues often break infrastructure projects and restrict private investments‘, says a partner of one investment fund in Singapore. ’The main problem for investors is political uncertainty. If governments lack authority, they are thus restricted in taking clear decisions‘.

Given these challenges, governments looking to attract investors need to provide them with a level of political and legal stability or at least a certain level of compensation, should that stability not be available for the reasonable life of the project. This may mean stabilisation clauses in their contracts or some form of governmental assurance that the laws as applicable to them will remain stable.

Inadequate regulatory regimes are cited by 38 per cent of respondents. Clearly, certain countries are seen as still having much work to do to improve the way their infrastructure projects are regulated and developed to legal frameworks. According to one project sponsor’s head of M&A: ’Emerging markets in the region have different governmental systems and various types of policies that reduce transparency—especially taxation policies and trade regulations. Corruption remains a major concern in some jurisdictions’.

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see political risk as the biggest challenge to investing in infrastructure in emerging Asian economies

Emerging markets in the region have different governmental systems and various types of policies that reduce transparency— especially taxation policies and trade regulations

Trade wars and weather hazards

When asked about the threat of trade wars and economic sanctions affecting investment across the APAC region, our research delivered a mixed response: 50 per cent of respondents agreed or strongly agreed that such sanctions would have a negative effect, while 43 per cent disagreed.

Energy—and specifically offshore wind—sectors illustrate what may happen if sanctions and trade tariffs increase, because these industries rely heavily on components made and distributed from different places within and outside the APAC region. Trade disruption may increase costs, or it may simply shift supply networks to areas not affected.

Respondents are also concerned about the risks of climate change or extreme weather for projects in the APAC region. This is hardly surprising given the figures on natural disasters in the region. According to the UN’s Global Humanitarian Overview 2019: ’Asia and the Pacific remain the world’s most disaster-prone region, vulnerable to both sudden and slow-onset disasters.’

Our survey confirms that the majority of investors are extremely vigilant when it comes to mitigating these particular risks. Only 24 per cent of respondents said their business models have not changed as a result of climate change risks. More than a third (38 per cent) said they are investing only in countries where disaster recovery and protection against the effects are a high priority, and 25 per cent said they only invest where the risks are low.

Such comments could be seen to be painting a bleak picture of prospects, but it’s worth noting that despite the risks, our figures reflect investors’ interest in non-OECD developing APAC nations. Indonesia, for example, backed by regional institutional investors, is the top country for respondents after Australia, India and Singapore. The sheer depth of opportunity is drawing their interest and the overall picture of regulation and reliability is an improving one.

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