An Overview of the ASEAN Infrastructure Deal Environment – November 2015

by Della Lin

  • 18 Nov 2015
  • INF

ASEAN’s economic growth has been threatened by a shortage of infrastructure. Over the years, initiatives such as the 2010 Master Plan on ASEAN Connectivity, have been implemented to address the region’s infrastructure needs and consequently, ASEAN has witnessed multiple partnerships in international infrastructure projects. For example, a project to connect Kunming, a city in Southwest China, to Southeast Asian cities was implemented, while there was competition between China and Japan to construct high-speed railways in Thailand. In addition, Singapore’s Deputy Prime Minister, Tharman Shanmugaratnam, recently announced that Singapore is increasing its efforts to attract institutional investment in domestic infrastructure projects. As attention to ASEAN’s infrastructure market increases, this blog reviews the region’s infrastructure deals environment.

Preqin’s Infrastructure Online service features information on 240 infrastructure deals completed in the ASEAN region since 2008, representing 32% of the total number of Asian infrastructure deals over this period. Among these deals, Indonesia (20%) had the highest proportion of deals, followed by the Philippines (18%) and Vietnam (18%). Growing urbanization and increased prosperity in these less developed countries are possibly the drivers for the higher number of deals in these regions. As shown in the chart above, the number of infrastructure deals completed dipped post-2008 before rising to 40 in 2013. Only 11 deals have been completed in 2015 so far; however, reported aggregate deal value is higher than it was in 2008, 2010 and 2012, despite there being approximately a third less completed deals.

Deals have been most numerous in the utilities and renewable energy sectors since 2008, each representing a quarter of all deals in the region. Transport deals represent a further fifth of completed deals. Of the 11 deals completed in 2015 so far, 10 have involved the aforementioned sectors, including Toyo-Thai Corporation, which won the bid for the 30-year Build-Transfer-Operate (BTO) concession of Ye Township Power Plant, valued at $2.8bn. Ye Township Power Plant is a 1,280 megawatt coal power plant situated in Southern Myanmar's Mon state. The power plant is equipped with Japanese Ultra Super Critical technology and supplies electricity to Myanmar's national grid.

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