Investment Finance and Financial Sector Development

Shubhomoy Ray
Additional contact information
Shubhomoy Ray: Asian Development Bank Institute

No 522, ADBI Working Papers from Asian Development Bank Institute

Abstract: Investment in infrastructure for increasing trade and connectivity in South Asia and Southeast Asia has been impacted by a reduction in commercial bank participation in project financing, which has significantly increased the role of multilateral financial institutions and export credit agencies. The financing model needs to change to more sustainable local market and local currency financing by harnessing domestic savings, and this will be crucial if the region is to procure investments of an estimated $3.6 trillion by 2020 for financing of its infrastructure and connectivity projects. Increased connectivity between South and Southeast Asia can play an important role in improving efficiency and productivity by having more efficient industries based on comparative advantage, enlarging the overall market size, and increasing market access. However, such economic integration faces a multitude of challenges relating to cross-border infrastructure links, weak trade facilitation, shortages of infrastructure financing, non-tariff barriers, restrictions on foreign direct investment, and weak institutional coordination. Improvement in these issues would require large-scale public and private sector investment, supplemented by commercially viable credit. This study analyzes the means and constraints in funding cross-border connectivity projects. Using the most recent data from sources including the World Bank, ADB, and other financing and research institutions, barriers in financing cross-border projects are explored and analyzed with the help of case studies. This research brings to the fore the potential benefits of regional funding platforms and the role of multilaterals in resolving such barriers.

Keywords: infrastructure; infrastructure financing; project finance; bond markets; public-private partnerships; public finance; multilateral banks (search for similar items in EconPapers)
JEL-codes: G15 G21 G23 H44 H54 H87 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2015-04-16
New Economics Papers: this item is included in nep-ppm and nep-sea
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.adb.org/sites/default/files/publication/159842/adbi-wp522.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:adbiwp:0522

Access Statistics for this paper

More papers in ADBI Working Papers from Asian Development Bank Institute Kasumigaseki Building 8F, 3-2-5, Kasumigaseki, Chiyoda-ku, Tokyo 100-6008, Japan. Contact information at EDIRC.
Bibliographic data for series maintained by ADB Institute (info@adbi.org).