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Overview

The government measures applied in response to the COVID-19 outbreak are drastically affecting economic activity across Asia. Policymakers face unique challenges amidst a need to contain the spread of the virus, in tandem with seeking both short and long-term measures to ensure economic, as well as social and political stability and growth. Recent activity across the region suggests governments across Asia Pacific view expansion of their infrastructure sectors as a potential solution.

The circumstances caused by the outbreak have prompted interest from governments to fund and support national and regional infrastructure projects at a level of activity and pace greater than before the impact of COVID-19 was felt. It is still early days in terms of overcoming the economic and social effects of COVID-19, but many governments are already taking directed action targeting infrastructure growth and spending to speed the recovery and we expect other governments throughout the region to initiate similar approaches to kick-start growth through infrastructure.

Current measures

The sudden and drastic impact of the virus has prompted immediacy from governments across Asia in their efforts to support the growth of infrastructure projects. We are observing a range of approaches being taken by different governments to stimulate infrastructure development, and whilst the situation is fluid, current behaviour indicates governments will continue focussing on infrastructure development for the foreseeable future, priming the sector for significant growth over the coming months and years.

We have outlined infrastructure stimulating measures implemented by governments across Asa Pacific to date. We are keeping an eye on this area in order to provide you with valuable, up to date market insights.

Key trends

The key trends we are currently seeing are:

Changes in regulation to help promote growth

Governments are loosening restrictions on development in regions in efforts to encourage investment in a range of infrastructure investments and streamlining regulation generally to facilitate investment and development.

Wind

Vietnam has a coastline of over 3,000km with reasonable water depths and promising OSW conditions

Government stimulus packages

Policymakers are actively encouraging the development of new projects, which are viewed as vital to economic growth, through a range of measures including tax and tariff cuts. Renewable energy projects and development data centres are amongst the sectors which have been recipients of support from governments across the APAC region.

Wind

The Government is potentially targeting over 11GW of wind energy by 2025.

Offering support with financial obligations

In order to meet these targets, Vietnam’s Government has rolled out a series of regulations aimed at clarifying the legal framework and incentives for the development of renewable energy projects, including a competitive statutory feed-in tariff. These policy developments, combined with a decline in global manufacturing costs for the technology necessary to leverage renewable energy sources, have generated significant interest among prospective investors.

Wind

Vietnam’s Government has rolled out a series of regulations and incentives for the development of renewable energy projects

Renewed interest in PPP initiatives

PPP initiatives are becoming more attractive to governments as they attract private investors to defensive, lower-risk segments in the infrastructure sector.

Wind

There remain a number of key hurdles for the development of largescale offshore wind in Vietnam.

Reallocation of priorities

In some jurisdictions, governments are delaying infrastructure spending and development to reallocate funding to more immediately urgent priorities. In many cases, this means directing funds previously earmarked for big-ticket infrastructure, being used instead for much needed health and social infrastructure.

Wind

There remain a number of key hurdles for the development of largescale offshore wind in Vietnam.

How we can assist you in navigating the market

We analyse the impact of government support measures on the Asian infrastructure markets to provide you with the most up to date and relevant insights to your business.

Our Energy and infrastructure team has current, market-leading experience on advising on infrastructure projects in Asia. The team has worked together on key mandates across the region and have a deep understanding of the local regulatory environments, as well as the drivers of key stakeholders (including the regulators and the local financing community).

Government support measures across the region

Click on the map pins to explore how governments across Asia are implementing ongoing measures to support infrastructure development .

Select a jurisdiction on the map to explore in more detail.

Mainland China (Click to expand)

 

Date


Summary


May 2020


8 May 2020: Beijing introduced new policies to encourage private investment in telecoms and power.

15 May 2020: People’s Bank of China announced 26 guidelines which will make cross-boarder transactions easier between Hong Kong, Macau and nine cities in the Greater Bay area of mainland China, with the aim of increasing development of big data infrastructure for sectors including healthcare and transportation.


April 2020

 


20 April 2020: NDRC announced fast track approval process for large-scale and strategically important infrastructure projects and to expand list of sectors that are open to foreign investment.

 


March 2020

 

4 March 2020: China Development Bank (CDB) and the Ministry of Commerce to provide financial support to coronavirus-hit Belt and Road projects, with streamlined loan approval process.

 

17 March 2020: National Energy Administration has scrapped wind power investment red alert for northwest provinces (Lanzhou, Baiyin, Tianshui, Dongxi, Pingliang, Qingyang, Longnan, Linxia, Gannan cities and prefectures of Gansu).

 

19 March 2020: Hubei reduced minimum equity threshold for urgently needed infrastructure projects by 5%.

 

20 March 2020: Government announced CNY 49.6 trillion to be invested in infrastructure across 25 major cities and provinces – focus on 5G networks, data centres, public healthcare, transport (high speed rail), energy (especially large-scale hydro) and social housing.

 

25 March 2020: National Development and Reform Commission (NDRC) announced it will work with large Chinese banks to raise financial support for 638 early-stage private sector-funded projects worth a combined CNY 47 billion (USD 66 billion).


February 2020


Ministry of Finance (MOF) announced relaxation of PPP regulations to fast-track registration and approval of PPP projects.

 

Indonesia (Click to expand)

 

Date


Summary


April 2020


23 April 2020: Public Works and Public Housing Ministry to suspend to 2021 (to come up for auction October 2020) a number of infrastructure projects to reallocate funds (37% of its 2020 budget) to COVID-19 emergency measures, including hospitals.

 

2 April 2020: Government considering asking banks to relax payment obligations for toll road operators.

 

Other: Likely the $33 billion project to build a new capital city in East Kalimantan province will be delayed.

 


March 2020

 


12 March 2020: Public Works and Public Housing Ministry gauging interest for 5 PPP road projects to try to counter impact of COVID-19.

 

 

 

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