Trends in National and Regional Investors Financing Crossborder Infrastructure Projects in Asia

66 Pages Posted: 4 Sep 2010

See all articles by Prabir De

Prabir De

Research and Information System for Developing Countries (RIS)

Muthi Samudram

affiliation not provided to SSRN

Sanjeev Moholkar

Japan International Cooperation Agency (JICA), India Office

Date Written: September 2, 2010

Abstract

This study examines a range of cross-border infrastructure development issues related to the Asian countries. Despite active pursuit of private investment in infrastructure by most developing countries in Asia and a growing number of success stories, the pace of such investment remains slow. Participation by the private sector in infrastructure development has been mixed. While there has been moderate progress in national infrastructure development by the private sector, progress is rather limited in the case of development of cross-border infrastructure in Asia. This study documents that Asian countries have attracted higher private sector investment for the development of national infrastructure projects such as seaports and airports as compared to cross-border infrastructure projects. The rising trend among private investors in infrastructure projects indicates a decline of investments by developed country investors. One of the findings of this study is that cross-border energy projects have received greater private sector investment globally as compared to transport, telecommunication, and water projects. In the context of Asia, too, energy sector projects still dominate the investment scenario. By considering all modes of financing, this study finds that cross-border infrastructure financing in Asia has witnessed an upward trend in the last decade and a half. Aside from hydropower projects in Bhutan, cross-border infrastructure in Asia is pursued through public-private partnerships. Interestingly, these few cross-border projects in Asia have limited private sector investors, compared to other regions, despite a wide base of local investors in Asia. This paper also shows that public sector investment drives cross-border energy and transportation projects in Asia, whereas private sector investments have picked up the pace only recently, specifically after the 1997 Asian financial crisis. This study recommends that given the huge infrastructure investment needs of the region and insufficient government resources, the role of the private sector and public-private partnerships in enhancing infrastructure facilities in Asia is very crucial. A review of select case studies of cross-border infrastructure projects clearly indicates that the major reasons for slow progress of regional infrastructure development by private sector stem from both economic to non-economic issues that need to be addressed in order to promote seamless Asia.

Keywords: asia regional infrastructure, crossborder infrastructure

JEL Classification: F2, F3, G2

Suggested Citation

De, Prabir and Samudram, Muthi and Moholkar, Sanjeev, Trends in National and Regional Investors Financing Crossborder Infrastructure Projects in Asia (September 2, 2010). ADBI Working Paper No. 245. Available at SSRN: https://ssrn.com/abstract=1671464 or http://dx.doi.org/10.2139/ssrn.1671464

Prabir De (Contact Author)

Research and Information System for Developing Countries (RIS) ( email )

India Habitat Centre, Zone 4B, 4th floor
Lodhi Road
New Delhi, Delhi 110003
India
+91-11-24682177 (Phone)
+91-11-2468 2173 (Fax)

HOME PAGE: http://www.ris.org.in

Muthi Samudram

affiliation not provided to SSRN ( email )

Sanjeev Moholkar

Japan International Cooperation Agency (JICA), India Office ( email )

2nd Floor, Dr. Gopal Das Bhawan
28, Barakhamba Road
New Delhi, 110001
India
01147685500 (Phone)

HOME PAGE: http://www.jica.go.jp/india/english/

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