By Rupin Banker
We speak with Rupin Banker, infrastructure finance specialist and co-founder of Strategic Global Alliance, on emerging-market investment, funding barriers and opportunities for institutional investors across Asia.
Rupin, emerging markets attracted almost $19 billion of net investment in July after two months of outflows, with Asia recording the strongest regional recovery. Is this as a turning point?
The numbers are encouraging, but I would be cautious about calling this a turning point. Debt attracted substantial investment while equities continued to experience outflows, albeit at a much slower rate. That tells us investors are becoming more constructive, but remain selective about yield, liquidity and risk.
The more important question is whether governments and businesses can use this improved sentiment to attract longer-term capital. Portfolio flows can reverse quickly when interest-rate expectations or geopolitics change, such as the recent conflict in the Middle East. Asia does not have a shortage of infrastructure ambition or a shortage of global capital. The challenge is building the bridge between the two. Infrastructure investment requires a much longer view, supported by credible policy, properly prepared projects and financing structures capable of surviving changes in the market cycle.
Why is the distinction between portfolio investment and infrastructure capital so important?
Portfolio capital can enter and leave a market rapidly, whereas infrastructure capital is committed to an asset that takes years to construct and decades to repay.
An infrastructure investor will consider construction, demand, regulation, land, currency exposure and multiple counterparties. A strong sovereign market can establish benchmarks and demonstrate confidence, but it does not automatically make individual projects investable for outside investors.
Governments must still convert national priorities into credible investment opportunities with transparent revenue models and built-in risk allocation.
Through Strategic Global Alliance, you work with governments, project developers and institutional investors. What most commonly prevents a project from securing finance?
The financing gap often begins as a project-preparation gap. There is substantial global capital available, but many projects approach investors before their commercial and institutional foundations are sufficiently developed.
A project may have strong political support but no settled revenue model. Land may not be secured, procurement responsibilities may be unclear, or an offtake agreement may not support the long-term investment case. In other instances, a project earning local-currency revenue is expected to carry unhedged foreign-currency borrowing.
These issues require detailed preparation and early engagement. Our role at SGA, is to help bridge that gap and translating strategic priorities into investable propositions by identifying what governments want to achieve, what the market can finance and how those interests can align.
Several initiatives are seeking to mobilise private capital through guarantees, trade-finance facilities and infrastructure securitisation. Is the model changing?
Yes. The infrastructure gap cannot be addressed through traditional project lending alone.
The most useful innovation is often not a new source of money, but a better way of allocating risk, matching financing to project cash flows and recycling capital. Guarantees can cover risks that private investors cannot reasonably absorb. Trade-finance facilities can ensure essential equipment reaches projects during construction, while securitisation can release capacity from bank balance sheets once assets are operating.
There is also an important role for infrastructure equipment financing structured over tenors that reflect the underlying cash flows of the project. Matching financing obligations more closely to the period over which infrastructure generates revenue can make projects more commercially sustainable and avoid the mismatch that can arise when long life assets are financed through shorter term facilities.
This creates a financing chain across the project lifecycle instead of expecting one institution to provide every layer of capital. However, financial structuring cannot rescue a weak project. These instruments must support viable assets with a clear economic purpose.
How should governments in emerging economies allocate risk without giving investors overly generous terms?
The objective should be to place each risk with the party best able to manage it, rather than seeking to eliminate risk for investors.
Transferring an unmanageable risk to a private investor may appear to protect the public balance sheet, but it usually results in higher financing costs or no investment at all. Equally, governments must protect taxpayers – guarantees and availability payments should be transparent, affordable and tied to measurable delivery.
The strongest partnerships are not those in which one side extracts the most favourable terms but those that remain workable when economic conditions become more difficult.
You highlighted India and Indonesia as important infrastructure markets. What makes them particularly significant?
Both combine scale, demographic strength and a clear need for sustained infrastructure investment, but they are different markets.
India’s opportunity is closely connected to manufacturing, urbanisation, energy demand, logistics and its expanding digital economy. Better transport links and power systems can improve productivity across a very large domestic market while strengthening India’s role in global supply chains.
Indonesia’s geography makes ports, transport and regional logistics especially important. It also has considerable potential in energy, critical minerals and downstream industrial development. The opportunity is to ensure its natural-resource strength translates into greater domestic processing, skilled employment, infrastructure development and lasting economic value.
In both countries, infrastructure is a condition for sustained growth. The investment case is strongest when a project supports a wider industrial strategy rather than being developed in isolation.
What role can European investors and institutions play in Asia’s next infrastructure cycle?
Europe has deep pools of institutional capital, strong development-finance institutions and expertise in renewable energy, transport, engineering, water and digital infrastructure.
There is also clear strategic alignment. Europe needs more resilient supply chains, more diverse trading relationships and stronger partnerships with high-growth markets. Investing in Asian infrastructure can support all three.
European participation will be most successful as a long-term partnership. Developing economies do not simply want finance or imported equipment. They want investment that supports employment, builds institutional capability and helps domestic businesses enter higher-value parts of the supply chain. The opportunity is to generate returns while leaving the host economy more productive and resilient.
Infrastructure is increasingly discussed in terms of supply-chain security and economic resilience. Has its strategic purpose changed?
Infrastructure has always shaped competitiveness, but its strategic importance is now clearer. It was once discussed as individual assets: a road, airport, power plant or telecommunications network. Governments and investors now think about how these systems interact.
A manufacturing strategy depends on reliable power, transport, ports, digital connectivity and finance. Critical-mineral industries require processing facilities, water, energy and logistics. Infrastructure must therefore be planned as an economic system rather than a series of disconnected projects.
Resilience does not mean producing everything domestically. It means having sufficient diversity, capacity and connectivity to withstand disruption. Stronger European-Asian infrastructure partnerships can make trade more dependable while creating new investment and industrial opportunities on both sides.
