Moody’s Investors Service says that funding for infrastructure projects in Asia will demonstrate increasing diversity. The rating agency reported growing funding diversity to bridge infrastructure funding gap recent precedent-setting capital markets transactions illustrate the evolution of infrastructure investment in Asia. These transactions were very well received by the market and indicate that institutional investors are attracted to Asian infrastructure issuances.

According to estimates from the Asian Development Bank (ADB), Asia needs to invest US$1.7 trillion per year in infrastructure from 2016 to 2030, or 5.9% of projected gross domestic product. In comparison, annual infrastructure debt raising by SOEs and private companies in the key countries in Asia has averaged only around $200 billion per annum in the past 10 years.

Although government expenditure and equity would account for a size-able proportion of the difference, this still indicates a substantial ramp up will be required to fund much-needed infrastructure investment. For example, the ADB estimates that the gap could be around $459 billion per year.