The CAMRI Infrastructure Finance Initiative publishes thought leadership articles and op-eds, which carry the perspectives, views and outlooks of CAMRI-associated authors as they relate to infrastructure finance with a particular emphasis on implications for Asia. These also draw on collective past experience in terms of identifying, creating and implementing bankable projects which are capable of attracting both private & public investments and partnerships; helping investors understand the risk-return profiles of bankable projects and flexibilities; and originating creative financing solutions with credit enhancements to fund infrastructure projects in Asia and Emerging Markets.

Making infrastructure assets more palatable
In a commentary, co-authors Dr Ranjan Chakravarty (Visiting Research Consultant, CAMRI), Prof Joseph Cherian (Director, CAMRI), Mr Kiyoshi Nishimura (CEO, CGIF), and Mr Wong Heang Fine (Group CEO, Surbana Jurong) say infrastructure financing requires a unified market approach combined with innovative techniques in valuation, structured finance and capital markets, and with global financial centres playing effective intermediation roles.
Asia Asset Management (May 2018)

Infrastructure finance and the new economy: A case for tokenising
In a commentary, NUS Business School alumni Darius Sit and Mitchell Chan from QCP Capital and JL Capital respectively, also graduates of the CAMRI Student Managed Fund Track, say blockchain tokens, essentially part of a ledger where a copy is owned by every participant in a network, will only have new entries following majority consensus. Both say this ensures transparency, security and immutability, three crucial characteristics for investor confidence, and leading to more participation from the private sector in the region’s infrastructure projects.
The Business Times (Tuesday, 10 April 2018)

Roads To Riches Or Roads To Nowhere? How Better Infrastructure Affects Growth In Rural India
A commentary by Sumit Agarwal, Visiting Professor at NUS Business School and former Research Director at CAMRI, on how investments in public infrastructure are a key component of economic growth strategy for emerging economies, with policymakers frequently advocating the trickle-down benefits of better connectivity for rural households. His research findings on a particular road-building program in India appear to support the trickle-down benefits of building large-scale infrastructure and its distributional consequences, and shows how financing responds to productivity changes arising from large-scale road-building initiatives and improves financial inclusion. In doing so, this research provides convincing estimates of the impact of road connectivity on access to, and productive utilization of, formal financial services.
Forbes (Wednesday, 14 February 2018)

A Unified Market Approach to the Infrastructure Finance Market
A working paper by Ranjan Chakravarty, Visiting Research Consultant at the Centre for Asset Management Research and Investments (CAMRI) at NUS Business School, Joseph Cherian, Practice Professor of Finance at the NUS Business School and Director of CAMRI, Kiyoshi Nishimura, CEO of the Credit Guarantee & Investment Facility (CGIF), an Asian Bond Markets Initiative funded by the Governments of ASEAN, China, Japan & Korea as well as Asian Development Bank, and Wong Heang Fine, Group CEO of Surbana Jurong, a Singapore Temasek-owned multi-disciplinary urban, infrastructure and management services specialist consultancy company.

The gap in supply and demand of infrastructure project funding and institutional asset allocation needs to be closed, the market completed, and better risk-adjusted excess returns earned by the parties that perform this task. The current analysis, by writers from an academic institution, an Asian infrastructure consulting firm and a multilateral development bank, underscores that the solution to this conundrum is unique – based clearly on a global approach combining cutting-edge techniques in valuation, structured finance and capital markets – and which an intermediation role can be effectively played by global financial centers of the world. Origination in the infrastructure business lies in asset ownership, asset management and investible capital. The first is the sovereign in whose jurisdiction the asset exists or is being developed. The second is the asset manager who structures the asset’s finances on the sell-side and books it on the buy-side. The third is the source of investible capital, which are mainly the asset owners. The availability of long term savings and capital in local currencies to match the financing needs of long term infrastructure is hence paramount.
(October 2017)
A version of this article also appeared in Asia Asset Management’s May 2018 issue.

Please click here for a related PowerPoint presentation entitled, “The Opportunity in Infrastructure for Emerging Markets” that was presented at a NUS Business School Masterclass on 3 November 2017.

PPI Infrastructure Working Group – Summary of Discussions from Third and Fourth Meetings
by Pacific Pension & Investment Institute (19 September 2017)

CAMRI, a frequent partner to the Pacific Pension & Investment Institute’s Executive Seminar and Asia Roundtable Series, is pleased to announce that the PPI held the fourth meeting of its Infrastructure Working Group on 19 September 2017 in New York and simultaneously via webinar. A summary of the discussion is now available by clicking here. The meeting addressed opportunities and obstacles in infrastructure investing in Africa. This discussion followed a successful third meeting and webinar on 25 July 2017 in Toronto, which focused on the role of government in infrastructure investing – a summary of that 25 July 2017 discussion is available by clicking here; as well as a webinar on 18 April 2017, which focused on the increasingly proactive role of multilateral development banks (MDBs) in bridging the gap in infrastructure investing between governments and investors.

Building uncertainty, flexibility into infrastructure megaprojects
Commentary by Assistant Professor Michel Alexandre Cardin (Industrial & Systems Engineering & Head of the Strategic Engineering Lab, NUS) and Practice Prof Joseph Cherian (Director, CAMRI) on new financial techniques infrastructure planners can use to make better decisions when developing projects.
The Business Times (Friday, 27 January 2017)

PPI Infrastructure Working Group – Summary of Discussions
by Pacific Pension & Investment Institute (25 October 2016)

CAMRI, a frequent partner to the Pacific Pension & Investment Institute’s Executive Seminar and Asia Roundtable Series, is pleased to announce that a summary of the discussion held by the PPI’s Infrastructure Working Group, which met on the sidelines of the PPI’s Asia Roundtable 2016 program in Hong Kong, is now available by clicking here.

The Pacific Pension & Investment Institute (PPI) is a U.S.-based, non-profit organization with a global network of pension and sovereign fund managers, endowments, consultants, asset managers and subject matter experts. The PPI’s Infrastructure Working Group, which convened in Hong Kong on 25 October 2016, comprises a group of 30 asset owners and influential stakeholders. This is just the first of a series of discussions by the PPI to:

a) Understand the roles, barriers and risks as viewed by project sponsors, asset owners, developers and investors
in the current infrastructure investment environment;
b) Support relevant investment platforms, whether currently in place or newly structured;
c) Unify a number of the fragmented approaches to the issues; and
d) Develop a set of recommendations that will be made available to PPI’s members so as to help move the
conversation on solving the infrastructure funding gap forward.

Prof Joseph Cherian, Director of CAMRI, served as the Moderator for the inaugural Infrastructure Working Group discussion session held in Hong Kong.

8th Wee Cho Yaw Singapore-China Finance and Banking Forum, Singapore, 14 July 2016

Financing Infrastructure and Promoting Free Trade
The year ahead will be challenging for the global economy with headwinds that will likely slow global trade. China’s weakening economy, higher interest rates in the US, plunging commodity prices coupled with global deflationary forces present a testing time for world leaders. To tackle these trends, world leaders have turned to two elements for global economic growth – freedom of cross-border trade and investment. Our distinguished speakers and panellists explored these complex and other pertinent issues including financing infrastructure and free trade pacts to invigorate the world economy.

The Potential for Shared-Use Infrastructure
By Ms Staci Warden, Executive Director, Center for Financial Markets at the Milken Institute (Monday, 11 January 2016, Presentation at the CAMRI Executive Roundtable Luncheon Series)

Singapore as the Hub for Infrastructure Finance
By Ranjan Chakravarty and Joseph Cherian (October 2015)
This article appeared in The Business Times.

Suntech Power: Competition and Financing in China’s Solar Industry (Ivey Publishing, October 2015, 9B15N019)
Authors: Emir Hrnjić and Sunil Gupta, October 2015

This infrastructure finance-related case study presents the difficult situation that Suntech Power Holding (Suntech), a technology intensive photovoltaic power generation firm, finds itself in 2011. The company operates in a very competitive market (the solar power industry in China). To add to the complications, differentiation in the industry is rather hard to achieve, because many people see solar panels as a generic product. On top of everything, demand is highly volatile as it depends on many factors, including the government policy regulations. Furthermore, the financial structure of the firm confounds the problem. In the light of these dilemmas in May 2011, Dr. Zhengrong Shi, the founder and chief executive officer of Suntech, hires David King as the firm’s chief financial officer. Shi and King have to face the arduous task of turning the company around.

Rudiments of Infrastructure Finance and the Case for Singapore
by Ranjan Chakravarty and Joseph Cherian (September 2015)

Oh, behave! Why the AIIB can be a win for China and Asia
NUS Think Business article by Joseph Cherian July 3rd, 2015

Singapore can play key role in AIIB

Related commentaries and op-eds by Prof Joseph Cherian (Director, CAMRI) on how Singapore can play a key role in the Asian Infrastructure Investment Bank, which were adapted from his Think Business article, Oh, behave! Why the AIIB can be a win for China and Asia.
The Business Times (Friday, 3 July 2015)
NetEase (Monday, 24 Aug 2015)
Caijing (Monday, 24 Aug 2015)

Optimal Extraction of Nonrenewable Resources when Costs Cumulate
By Joseph Cherian, Jay Patel and Ilya Khripko, In Project Flexibility, Agency, and Product Market Competition: New Developments in the Theory and Application of Real Options Analysis, (Oxford University Press, NY), Michael J. Brennan and Lenos Trigeorgis (Editors), 1999, Chapter 12, 224-253.

Advances in economic theory and optimal control methods have considerably improved the prescriptions for the extraction of exhaustible natural resources. The classic analyses proceeded under assumptions of price certainty with the emphasis on increasing marginal costs. Recent work, by using real options analysis, has addressed the considerable uncertainty in resource prices, but assumed a constant marginal cost of extraction. This paper frames and solves the nonrenewable resource extraction problem (in the context of a typical mine) that jointly accounts for price uncertainty as well as the dependence of extraction costs on the cumulative amount extracted and the extraction rate. We find that ignoring cumulating costs when determining extraction strategy can lead to significant loss of value. Our analysis also establishes the general tools to pursue, for instance, the optimal taxation policy of the natural resource sector that is of interest to many developing countries.