Time for an Asean urban infrastructure network?

SOUTH-EAST Asia should create an urban infrastructure network to help plug the gaps in development, a regional lender has suggested.

Such a network - modelled on an existing plan for smart cities - was touted as possibly making municipal, procurement and other public sector leaders better placed to work with the private sector on bankable, sustainable projects.

Asean's finance ministers were handed recommendations on Friday on how to attract private investment in economically and environmentally sustainable projects, in a presentation by HSBC ahead of the ministers' annual summit.

Besides an infrastructure network, which could take on the task of developing templates, models and other resources for officials to tap, HSBC also called for a blended finance toolbox built in partnership with development banks and the private sector.

This would entail the introduction of a blended finance approach to structured finance, to woo a broader array of investors focused on longer-term returns.

International and national development banks could also work together to set up facilities and programmes focused on the region, HSBC said.

Mukhtar Hussain, head of business corridors for the Asia-Pacific at HSBC, said: "Addressing environmental challenges is no longer simply a moral dimension but an economic one."

Mr Hussain, who presented the recommendations to the ministers, added: "The development of sustainability-linked infrastructure using public and private sector financing is the only way that Asean can address the challenges that climate change presents to its economies."

HSBC has previously estimated that countries must invest US$100 trillion in new sustainable infrastructure over the next 15 years to meet the Paris Agreement's target of keeping global warming below a two-degree temperature increase.

Separately, the Singapore and Cambodia central banks agreed on Thursday, on the sidelines of the finance ministers' meeting, to boost co-operation in financial technology innovation.

The two countries plan to do this by sharing information on emerging market trends and developments and working together on financial services regulation.

"This collaboration also provides a framework for promoting financial innovation not only in our two countries, but also in the broader Asean region," said Jacqueline Loh, deputy managing director of the Monetary Authority of Singapore, in a statement.