Nov 07, 2013
Singapore, November 4th 2013 - DBS Bank and Cities Development Initiative for Asia (CDIA), a regional initiative led by the Asian Development Bank and the Government of Germany, recently signed a Memorandum of Understanding (MOU) to deepen cooperation in infrastructure and project financing. This marks the first time a private-sector commercial bank has collaborated with the CDIA to promote investment in urban infrastructure development in emerging markets in Asia.
Established in 2007 by the ADB and the Government of Germany, with additional support from the governments of Sweden, Switzerland, Austria and the Shanghai Municipal Government, CDIA provides assistance to medium-sized Asian countries to bridge the gap between their development plans and the implementation of their infrastructure investments.
DBS, in turn, believes there is a large infrastructure funding gap in Asia partly due to projects being often unprepared with a lack of financial advice. With the collaboration, DBS will explore possibilities to finance projects that CDIA has helped to prepare.
Said Lim Wee Seng, Head of Project Finance for DBS, “Whilst much is known about the huge infrastructure requirements of Asia over the next decade, the headline-grabbing projects are usually those at the national/federal level. Not enough is being done to strengthen the institutional capacity of many Asian countries at the local and municipal-level government to ensure the proper prioritisation, planning and implementation of essential infrastructure such as water/sewage treatment plants as the urbanisation of Asia accelerates.”
“The continuation of this capacity gap will eventually lead to an infrastructure gap, thereby impeding economic growth and quality of life. That is where the CDIA-DBS MOU comes in. CDIA exists to bridge the gap between city development strategies, spatial urban plans and infrastructure investments – a project development facility supporting cities to identify and prioritise infrastructure projects. CDIA then helps cities to find financing for such investments. DBS is delighted to partner CDIA in the area of ‘linking projects to financing’ for private sector finance. Both organisations share a common focus on improving lives in Asia and DBS looks forward to catalysing more bankable projects together with CDIA.”
As part of the MOU, CDIA will introduce DBS to potential projects in the bank’s key markets of Southeast Asia, India and China. These projects should primarily be in the power, water or sanitation, as well as renewable energy and transportation sectors. DBS’ main participation will be in advising, structuring and arranging project financing for these projects.
Said CDIA, “As we are involved increasingly in private-sector urban infrastructure financing in Asian cities, it is a logical and strategically important step to partner with a private-sector commercial bank, even more so with one as experienced and renowned as DBS.”
DBS established its dedicated project finance team in 2010 to better meet the needs of corporate and sovereign customers as a fast-developing Asia invests to build up its infrastructure. As at 30 Sep 2013, the bank was ranked 8th in the Project Finance Mandated Lead Arrangers League Table for Asia-Pacific (PFI, Thomson Reuters) and has consistently been ranked amongst the Top 10 Project Finance Asia-Pacific Financial Advisor League Table (PFI, Thomson Reuters) for the past three years.
Re-disseminated by The Asian Banker