Regional leaders urging the private sector to get involved in building infrastructure across Asean told the World Economic Forum on Asean on Thursday that it will require $1.7 trillion in annual investment.
“We have to look to the private sector to build major infrastructure,” Cambodian Transport Minister Sun Chanthol said during a panel discussion titled “Countering the Connectivity Conundrum.”
He was joined by his Thai counterpart, Arkhom Termpittayapaisith, and others on the second day of the forum in Phnom Penh.
According to a statement released by the forum citing Asian Development Bank (ADB) figures, Asean will need $26 trillion in investment by 2030 to meet the region’s infrastructure needs.
“The buy-in of the private sector is crucial,” said Jin Liqun, president of Asian Infrastructure Investment Bank (AIIB) in Beijing, a recently started financial institution for funding regional projects.
AIIB was among three major infrastructure initiatives being pushed across various sessions of the forum with the aim of promoting investment and improving connectivity across the region.
The Sustainable Development Investment Partnership, backed by the World Economic Forum, is urging blended public-private financing for $100 billion of infrastructure projects coordinated across Asean.
China’s “One Belt One Road” initiative, which Cambodia officially joined following Chinese President Xi Jinping’s visit in October, also aims to create infrastructure links in the region.
“The Belt and Road initiative is a very complex and massive multidimensional program,” said David Wijeratne, leader of PwC’s growth market center, who was part of a panel discussion about the Chinese project.
Mr. Wijeratne said there were several ways private companies could get involved in the project, including supplying equipment for construction, building the infrastructure and helping to operate the new ports and airports that are to be developed.
PwC, a multinational firm, is releasing a report at the end of the month offering insights for individuals who may want to invest in the initiative.
“The private [sector] is sometimes worried about the risk, because infrastructure is a long-term investment—you know, like 20, 30 years,” said Justin Wood, head of Asia Pacific region for the World Economic Forum, on Monday.
He said the purpose of blending funding from developed countries and private investors was to offset the investments’ risk.