In annus Covidus, Infrastructure Investor Asia’s annual summit went virtual. But during and beyond the lockdowns, what are the prospects for sectors and geographies across emerging markets? Andrew moderated this panel yesterday to find out.
He was joined by two heavyweight investors – Neil Brown of Actis looking for control of projects and Mujeeb Qazi of ADIA preferring significant minority interests; by Allard Nooy of developer InfraCo; and by Joshua Bingcang of the Philippines government’s BCDA, the panel thus (unusually) embracing the full investment cycle.
Renewables is the most active sector. Prospects abound in India for solar and wind, in the Philippines too. In an earlier session, ADM Capital had explained how they were working with the government in Indonesia to synchronise PPA terms from smaller projects so as to compile a portfolio large enough to be securitised. The Philippines, also archipelagic, would benefit from this too. The same two countries also lead in geothermal (Mt Lewotolo in East Nusa Tenggara, pictured, was erupting as we spoke) with its risk profile of part O & G exploration / part IPP.
In the transport sector, roads and rail are subject to significant rerating due to how the virus is accelerating changes in work patterns and thus commuting as well as much more. With airports, IATA forecasts that passenger numbers may return to 2019 levels by 2024. But there will be significant changes to the balances of domestic / international pax and of business / economy class. In reality, no one knows. Nonetheless, Thailand is progressing a third airport at U Tapao and Joshua updated us on the Philippines’ plans for four Manila airports.
There were plenty more prospects that we didn’t have time for – gas as an intermediate energy source as the World migrates from coal to ever more competitive renewables; commercial and industrial offtakers instead of state ones; the enormous, needy populations of Pakistan and Bangladesh; new risk profiles such as data centres (and how to classify them); and an overall view that prospects might, in fact, be rosier than supposed with no need to get back into bed listening to the late Ian Dury and his Blockheads.
