The Asia-Pacific Financial Forum (APFF) convened the Expanding Trans-Pacific Opportunities for Long-Term Investment in Infrastructure in Toronto, Canada, on July 25, 2017, organized by ABAC and Asia Pacific Foundation of Canada in collaboration with Global Infrastructure Hub, OECD, World Bank Group, and Global Infrastructure Facility, hosted by Government of Canada and Government of Ontario.
An estimated US$5 trillion dollars needs to be invested in infrastructure every year through 2030 in order to secure the world’s future growth, according to the World Economic Forum. The Asian Development Bank’s estimate for meeting emerging Asia’s infrastructure needs amounts to US$1.7 trillion annually. With many governments facing growing fiscal constraints, the private sector will need to play a larger role in funding these needs, as well as in injecting more efficiency and innovation in the region’s infrastructure.
Facing this huge funding challenge is the opportunity to mobilize a large global pool of institutional investor assets. The OECD estimates such assets in its member economies at USD 92 trillion, a significant portion of which could be more profitably invested in infrastructure. Confronted with aging populations, lengthening life spans and a low-interest rate environment, these investors are seeking greater portfolio diversification and more profitable investments in long-term assets that match their long-term liabilities.
Translating this opportunity into action will involve addressing various obstacles. These include the lack of capacity in many developing economies’ public sector (especially in line agencies and local governments) to bring bankable projects to the market, the dearth of deep and liquid local currency bond markets that are the usual channels for long-term investment in infrastructure, and the lack of capacity of most pension funds and insurers to directly manage infrastructure assets, especially in developing economies. This Roundtable seeks to help address these issues by bringing together key stakeholders from the public sector, the investor community, infrastructure experts, and multilateral and specialized institutions to identify forms of collaboration that can directly facilitate investment in infrastructure.
Mack participated in the SESSION 3: PROMOTING LONG-TERM INFRASTRUCTURE INVESTMENT THROUGH COLLABORATION AND INNOVATION.
The panel was moderated by Ms. Ambassador Donald W. Campbell, Senior Strategy Advisor, DLA Piper Canada LLP; and
Co-Chair, Pacific Economic Cooperation Council (PECC).
After the overview presentation on Developing Infrastructure Projects to Attract a Wide Range of Private Investors by Mr. Jason Zhengrong Lu, Acting Head & Lead Infrastructure Finance Specialist, Global Infrastructure
Facility (GIF), The World Bank Group, the following panelists discussed related issues:
- Mr. Sashen Guneratna, Managing Director, Infrastructure and Project Finance, PwC LLP
- Mr. James Cowan, Managing Director, New York / Toronto, Macquarie Infrastructure and Real Assets
- Mr. Michael Mulvaney, Managing Director, Public, Project and Infrastructure Finance (PPIF), Moody’s Investors Service
- Professor Walid Hejazi, Associate Professor of Business Economics and Academic Director, Rotman
School of Management, University of Toronto
- Makoto Okubo, General Manager, International Affairs, Nippon Life Insurance Company
During this panel, Mack I described a relevant section of APFF Progress Report “Expanding the Long-Term Investor Base” and some key issues in promoting infrastructure with focus on regulatory perspectives.
The APEC Business Advisory Council (ABAC) also convened the 3rd ABAC meetings in Toronto, Canada, on July 24-28, 2017.
Mack provided a report on the activities of the APFF Insurance and Retirement Income Workstream with particular focus on retirement and long-term investment at APFF Caucus meeting. APFF activities were subsequently reported to Advisory Group Meeting.