Asia is developing rapidly. Demand for urban infrastructure and services is expected to grow strongly, with infrastructure investments in developing Asia projected to be US$20 trillion (S$28.5 trillion) from 2016 to 2030. The role of infrastructure is critical to promoting sustainable growth and improving connectivity. Growth in demand for infrastructure is driven by urbanisation, increasing demand for transportation to allow trade and the effective movement of goods, raw materials and people, technological advancements and shifts in global economic power.

As Asia develops, significant improvements in its transportation networks, electricity-generation capacity, telecommunications and water infrastructure have been made. Though nearly US$900 billion is spent a year on infrastructure in Asia, this is substantially less than the estimated US$1.7 trillion that the region requires annually to keep pace with economic growth. Energy and transport account for nearly 90% of total investment needs.

The majority of infrastructure financing currently comes from the public sector and multilateral development banks. While private financing is gaining in popularity and can help access the skills and capabilities of private infrastructure developers, it is expected that public financing will continue to be important in meeting Asia’s investment needs.

Figure 1 Projected global infrastructure spend 

Source: Organisation for Economic Co-operation and Development


Recognising Asia’s demand for infrastructure, and identifying the challenges to effective delivery and how to address them, Singapore is positioning itself as the region’s infrastructure hub. Earlier this year, Singapore set up a new infrastructure office, Infrastructure Asia, to support the development of the region by bringing together local and international partners across the infrastructure value chain, including developers, institutional investors, multilaterals, and legal, accounting and financial services providers. Infrastructure Asia will also provide a platform for exchanging information on infrastructure opportunities in Asia. It will facilitate infrastructure investments and financing, and enable infrastructure players in the region to tap on these opportunities.

To keep pace with the growing industry, there is a continuing requirement for project finance specialists. One path for developing these resources is to build the capabilities of accounting professionals who already have a good grounding in many of the issues involved.

Singapore is strategically positioned at the heart of the region, and has a strong ecosystem of infrastructure development companies, financing and risk management institutions, consultancies and law firms (among others). These elements make Singapore well-placed to share its expertise with the region’s stakeholders. Specifically, the key factors that will contribute to Singapore’s position as an infrastructure hub are:

1) Expertise and track record across the infrastructure value chain

Through its own nation-building, Singapore has gained the necessary expertise and experience across different phases of the infrastructure value chain.

Figure 2 Singapore’s expertise in the infrastructure value chain

Source: Singapore Business Review

2) Major financial centre in the region

Singapore is a major financial centre for the Asia-Pacific region, and up to 60% of project finance transactions are arranged by Singapore-based banks. The capital-intensive nature of infrastructure projects makes financing one of the key factors that project developers consider. Recognising Singapore’s central role, many foreign banks have also set up their project finance offices here.

3) Professional services and expertise

Singapore’s talent pool for professional services, across technical, legal and accounting disciplines, is widely recognised for its strong skills and knowledge. The Big Four accounting networks provide project advisory services to the region, helping organisations to develop business cases, structure economically-viable, bankable projects and drive capital efficiency.

Similarly, the complex nature of infrastructure projects requires strong legal support. With a trusted legal framework, Singapore is a preferred venue for dispute litigation and its law is often used in commercial contracts. Singapore’s legal profession is recognised locally and overseas for its deep expertise across every facet of infrastructure development, from concession, construction and finance structuring and documentation, to arbitration, commercial litigation and other forms of dispute resolution.

There are also efforts to strengthen the debt-restructuring ecosystem by enhancing the legal framework for restructuring, creating a restructuring-friendly environment and increasing the availability of rescue financing.

4) Collaboration with multilaterals

Multilateral development banks are important providers of infrastructure finance and technical expertise. In 2015, the World Bank Group set up its first Infrastructure & Urban Development Hub in Singapore. Singapore also contributed to the Global Infrastructure Facility, a US$100-million platform to structure infrastructure projects. In addition, Singapore works closely with the Asian Development Bank, including on the Asia Infrastructure Centre of Excellence (AICOE) which works with ASEAN governments on the structuring and financing of public-private partnership (PPP) projects1 out of Singapore.

5) Presence of international and local engineering and consultancy firms

Singapore is home to both international and homegrown engineering and consultancy firms. Their expertise and commitment to driving growth in Singapore’s infrastructure, including buildings, tunnels, highways, rails as well as the energy sector, has resulted in monumental developments of our nation’s skyline. State-of-the-art projects like Singapore Changi Airport and green spaces like Gardens by the Bay clearly display Singapore firms’ capabilities in urban planning and infrastructure engineering, and have contributed greatly to Singapore’s reputation as a vibrant and beautiful business hub.


One of the key strategies highlighted in the Committee for Future Economy report is for professionals to collaborate and leverage their core competencies, and tap on opportunities in the region and globally.

Employers within the infrastructure industry are involved along the project value chain, from project initiation to capital recycling. These include advisory firms, banks, private equity firms, engineering and construction companies, and the public sector.

Risk management, financial modelling and forecasts, and credit analysis are familiar matters to many accountants.

Figure 3 Life cycle of infrastructure projects

Source: Ernst & Young Solutions LLP

The accounting firms, particularly the Big Four firms, provide project advisory services on a range of projects across the region. The advisory services required vary between the government and private sectors, though there are some overlapping skills as well.

Figure 4 Advisory services required by government and private sectors

Source: Ernst & Young Solutions LLP

1) Risk identification and mitigation of risks

Infrastructure projects are generally capital-intensive and long-term projects of at least 15 years. They are subject to a wide range of risks, particularly during the construction phase and in the transition to operations. Design issues, management of interfaces, cost overruns and delays and demand risks must all be allocated and managed to ensure a successful outcome.

Different stakeholders are exposed to different risks within the project structure, commensurate with their appetite for risk. For example, specialist equity investors generally fund the initial construction and operations, when risks are high, before selling down to other investors (such as pension funds) to take over the ownership of the project when it is expected to deliver stable, long-term returns.

Advisors play an important role in these processes, by identifying risks and mitigations, advising on monitoring and ongoing management, and structuring transactions to allocate risks to parties most able and willing to efficiently bear them.

2) Financial modelling

Throughout the end-to-end project life cycle, robust capital management is critical to the success of the project, and modelling plays an important part. Governments, investors, procurers and builders need to balance time, cost and quality with the availability of capital and competing projects, and this depends on detailed financial analysis. To help understand and mitigate risks, financial modelling is required to forecast the performance of a project under various scenarios. The model sets out financial estimates based on technical, economic, financial and other inputs, and provides income and cash flow projections, project returns, financing, economic analysis and other important information that will be used to help formulate the structures and terms of the project’s equity and debt instruments.

3) Credit analysis and bankability

As infrastructure projects typically raise funding using limited recourse project finance, credit analysis is another aspect of project development where advisors play a key role. Integrating the financial modelling, the project risk profile and an understanding of the commercial and contract terms and market dynamics, advisors help to develop and assess the credit risk in the transaction structure, develop indicative pricing assumptions and provide information to support the process of negotiations with lenders and investors.


To keep pace with the growing industry, there is a continuing requirement for project finance specialists. One path for developing these resources is to build the capabilities of accounting professionals who already have a good grounding in many of the issues involved.

Risk management, financial modelling and forecasts, and credit analysis are familiar matters to many accountants. An internal auditor is trained to provide objective reviews of an organisation’s risks and controls based on their financial and operational business activities. A financial planning analyst is trained to build dynamic financial budgets and forecasts, incorporating the use of metrics such as internal rate of return and net present values, for project appraisal exercises within the business. A credit analyst is trained to analyse the financial data of clients and business partners, and assess their credit worthiness.

In support of the government’s call to building the talent in this space, ISCA and EY are exploring the development of a professional/experience pathway to deepen the skills of ISCA members in project finance. “As a leading advisor to infrastructure projects, EY is deeply invested in the continued growth of the sector and in Singapore’s progress as the infrastructure hub for the ASEAN region. We are excited about the opportunity to collaborate with ISCA on this initiative to help accounting professionals develop the skills necessary for roles in this dynamic sector,” expresses Lynn Tho, Partner-ASEAN Infrastructure Advisory Leader, Ernst & Young Solutions LLP.

Brendon Joyce is Director, Infrastructure Advisory, Ernst & Young Solutions LLP, and Lee Zhen Ni is Senior Manager, Pathways Development & Qualifications, ISCA. The writers express their gratitude to Enterprise Singapore and Infrastructure Asia for their inputs. The views reflected in this article are the views of the authors and do not necessarily reflect the views of the global EY organisation or its member firms.

1 A PPP is an arrangement between a party from the public sector and a party from the private sector for the development and/or management of a public asset or service and is usually long term in nature.