Closing the Financing Gap in Asian Infrastructure

Abstract

Infrastructure investment in Asia, both in economic and social infrastructure, faces a massive financing gap despite the region’s high savings. The cause of this gap is a capital flow paradox in which Asia’s outflow of portfolio funds far exceeds the inflow. To change this, three areas must be improved: innovative measures to mitigate constraints, preparation of bankable projects, and mitigation of risks. This study provides an overview of key issues in filling infrastructure financing gaps in Asia, and presents examples from actual investment projects to illustrate latest developments addressing some fundamental constraints.