Capital markets to boost Asian PPPs

9 May 2017 The ASEAN Infrastructure Fund (AIF) is to increase collaboration between member states to encourage greater use of the capital markets to raise finance for PPP projects.

Securities Commission Malaysia chairman YBhg Tan Sri Dato’ Seri Ranjit Ajit Singh exposed his vision for the AIF at the Islamic Finance and PPP for Infrastructure Development conference in Kuala Lumpur, Malaysia.

Singh said: “We envisage the AIF to eventually encourage greater private sector participation in regional infrastructure development through debt issuances via the capital market, the proceeds of which will be directly channelled to PPP projects as private investments.”

The event, which attracted developers, policymakers, regulators and representatives of financial institutions, focused on how to exploit Islamic finance in PPPs.

Attention fell on modalities with risk-sharing and asset-backing features such as Mudarabah (trust financing), Musharakah (equity financing), Ijara (lease financing) and Istisna’a (work-in-progress financing).

The World Bank, which organised the conference, said: “The increased use of Sukuk (Islamic bonds) has also opened up an important potential new source of funding for infrastructure projects which require large capital outlays with long construction and amortization periods.”

This page was last updated on:
20 November 2017.

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