South East Asian countries’ commitment to spend more on infrastructure is vital in order to boost economic and social development through the improvement of basic necessities such as power, water and transport throughout the region. Each dollar spent on capital expending raises a country’s output threefold. As a result, the required capital investments are expected to gain considerable momentum over next few years, generating multiple long term investment opportunities.
It is expected that the region will need to spend USD 950 Billion by 2020, if its economies are to grow and develop as per international standards. The need to roll out transport projects is increasingly important given urban populations are predicted to double by 2020, with 120,000 people relocating into the cities on a daily basis. Every SEA country has its own infrastructure priorities, though transportation and electricity improvements are common themes. This is reflected in Indonesia which has plans for new seaports, airports, railways, power stations, waste water treatment plants and new roads. Bolstering infrastructure spending is a key Indonesian Government objective.
A budget of USD 29 Billion has been allocated for the year 2019 for public spending on roads, railways and airports. The government has plans of building 2,007 Km of new Roads & Highways, 16 toll roads, laying 415 Km railway tracks, 48 Dams are to be constructed for water management and electricity generation, 4 new airports will be built, construction of bridges are some of the highlighted infrastructure projects. Investments are also expected in 4.4 GW renewable energy projects in 2019.
BUSINESS CASE FOR ENERGY & INFRASTRUCTURE PROJECTS IN INDIA AND SOUTH EAST ASIA
- Union Budget 2018-19 for Indonesia focused on greater spending in infrastructure.
- Major Infrastructure projects gaining momentum in South East Asian region.
- Philippines President Duterte announced in 2018 that a total of USD 180 billion will be spent over the next 10 years.
- South East Asian countries focusing more on expanding it’s railway infrastructure
- Southeast Asian assets under management are forecast to grow at an 11.8% compound annual growth rate during the second half of this decade to reach US$516.6 billion by 2020
- Natural gas developments in SEA countries to create major opportunities
- SEA countries have potential to further harness renewable energy, especially hydro, geothermal, biomass, wind and solar power