Infrastructure projects focused on cross-border connectivity present significant investment opportunities and are vital for long-term growth in Asia.
This is the main conclusion of the inaugural Asian Infrastructure Finance report developed by AIIB. The report emphasizes that cross-border infrastructure including links that promote trade, market integration and the distribution of green energy are necessary during times of market instability and declining economic growth. It also highlights that projects in markets including India and China have the potential to greatly improve much-needed connectivity in Central and South Asia.
Using snapshot analyses of financing cost, financing value and construction costs across eight key markets, the report explores how tensions, rising nationalism and macroeconomic developments are impacting cost drivers and investment potential on a country-by-country basis.
For the eight countries considered, the total value of market transactions reaching financial close fell in 2017 and is likely to also register a small decline in 2018 compared to 2016
(see Figure 1 and Figure 2).
The report also identifies where infrastructure opportunities are still largely untapped by investors and are at risk of remaining so with increasing uncertainties.