Moody's: Key to Asian infrastructure development lies in multi-pronged financing

The US-based ratings agency, Moody’s Investor Service, published a latest report on infrastructure development in Asia, highlighting the significance of a multi-pronged financing approach.

Key Points:

 A multi-pronged financing approach is key to enhancing infrastructure development in Asia

"In terms of debt funding, a multi-pronged approach that combines bank loans with institutional debt capital will help raise private sector debt capacity," says Terry Fanous, Moody's Managing Director for Project & Infrastructure Finance in Asia Pacific.

"The role of governments and the multilateral development banks is key to catalyzing institutional investment by helping infrastructure projects become more investable," says Ray Tay, a Moody's Vice President and Senior Credit Officer.

"Specifically, credit enhancement by multilateral development banks will help address different credit risks — such as political risk and the risk of cost overruns — that could otherwise constrain a project's credit quality," adds Tay

Moody's points out that other efforts by multilateral development banks and organizations such as the Global Infrastructure Hub in standardizing documentation and establishing a project pipeline tracker will enhance investor confidence in the infrastructure sector.

Multilateral development banks are also optimizing balance sheets, which can help drive more credit enhancement for projects.