The ETDA’s booth, organised under the concept of “Internet for a better life”, aims to enhance online safety and advise entrepreneurs at Challenger Halls 2-3 at the Impact Arena.

 SET Senior Executive Vice President Pakorn Peetathawatchai said that Asean stock exchanges’ indices in April moved in different directions, with the indices in Thailand, Singapore and Malaysia up slightly while Vietnam, Indonesia and the Philippines ended lower. On the Thai exchange, domestic retail and institutional investors were net buyers in April 2018.

In April, foreign investors sold a net Bt21.40 billion of Thai shares, in line with most regional stock markets and the Thai bond market, where foreign investors were also net sellers in April.

Forward P/E ratio of SET was 16.26 times at end-April, while historical P/E ratio was 18.29 times, comparing with the average ratio of its Asian peers at 14.34 times and 15.93 times, respectively.

Dividend yield ratio of SET was 2.87 per cent at end-April, above Asian stock markets’ average ratio of 2.56 percent.

A combined market capitalisation of SET and mai at end-April amounted to Bt18.1 trillion, up 1.2 per cent from the end of 2017.

Songkhla Governor Doladech Patanarat and Provincial Administrative Organisation chief executive Niphon Boonyamani were on hand recently as Assistant Professor Anek Siripanichkorn, director of KMUTT’s Institute of Scientific Technological Research and Services, and WGI executive director Sean Goh signed an agreement.

The monorail, with cars running on lithium batteries, is in response to the government’s “Thailand 4.0” policy and the Association of Southeast Asian Nations’ ambition to develop 90 “smart cities”.

“Songkhla welcomes new technology to develop the province in ways that conserve energy and the environment,” Doladech said.

“This transportation system will provide convenience and improved efficiency for residents, tourists and entrepreneurs and help develop our economy and tourism.”

Goh said WGI was pleased to fund the feasibility study, which would identify “good points and bad points without affecting the existing transportation system” and “limit the disadvantages of some of transport technology that can destroy the environment”.

“Because every car on the Sky Track has a lithium battery, cars can be added during peak periods and taken away when they’re not needed. This saves energy and operating costs and the environment.”

Niphon thanked the private sector for its interest in “investing and bringing modern technology for mass transportation to Hat Yai while conserving the environment”.

“With tourism and the airport expanding, mass transport that provides convenience is important,” he said. “This study will support the city’s development policy by identifying whether the monorail can improve traffic flow and convenience without harming the environ or affecting the existing transportation system.”

Anek explained that the Sky Track would feature “cars hanging from the rail”.

“Each car can go along the normal traffic lanes as the poles and the rail are not too big, so they won’t affect normal traffic.”

The funds from the private sector would flow into projects ranging from commercial buildings and a sports complex to an international exhibition centre and residential estates, the minister said of the ambitious plans for the 2,325-rai site.

“This figure excludes the government’s investment to develop infrastructure at Bang Sue Grand Station worth more than Bt47 billion,” Arkhom said on the sidelines of a seminar, Bang Sue Grand Station: Bangkok’s New Centre, that was conducted by Krungthep Turakij – a sister newspaper of The Nation.

He told the seminar that the master plan to develop the station has the project split into three phases. The first phase entails the development of Bang Sue Grand Station and commercial and office buildings integrated with the transport system from 2017 to 2024. The second phase will develop a centre to serve the meetings, incentives, conferences and exhibition (MICE) sector, a sports complex, and retail, office and residential projects around the station from 2024 to 2029. Under the third phase, more housing projects will be built from 2029 to 2031. The master plan was drafted by Thailand’s Transport Ministry and its Japanese advise.

Under the plan, Bang Sue Grand Station will become a new central business district (CBD) in Bangkok, alongside the Sukhumvit and Silom areas. The station will be a key link in Bangkok’s mass transit system. It will serve existing rail systems such as BTS Skytrain, the MRT, and the Airport Rail Link as well as the 10 new rail systems to come and three high speed routes: Bangkok-Nong Kai, Bangkok-Chiang Mai, and the high speed service linking the Suvanabhumi, Don Muang, and U-Tapao international airports.

The project has seven zones that cover the 2,325 rai around Bang Sue district. Zone A covers 32 rai for a Smart Business Complex that will open for private sector bidding this year for its development.

Zone B will be devoted to the Asean Commercial Business Hub, incorporating retail and office space. Zone C will see the development of the MICE Super Arena and Exhibition and the sport complex. Zone D covers the Chatuchak park and Chatuchak Weekend Market on 83 rai. Zone E will be for public and state agency offices, while Zone F will host a shopping mall and Zone G will be a residential area covering 360 rai.

The Transport Minister is negotiating with PTT Plc to develop a clean energy supply for electricity at the project. The project also will include the development of a telecommunication system to support the concept of a smart city, Arkhom said.

“The government has invested to develop infrastructure projects at the Bang Sue Grand station, as the commercial area that will be open for the private sector to bid for work under public-private partnerships (PPP),” Arkhom said. “The Smart Business Complex in Zone A will be the first project that will open for private-sector participation. We plan to set the terms of reference (TOR) in the next three months and invite bids in the last quarter of this year.”

In line with the master plan for Bang Sue Grand Station to become a new CBD, Sansiri Plc’s chief operating officer Uthai Uthaisangsuk said at the seminar that if the project is completed as planned, that would provide opportunities for the private sector to expand investments around the location.

“Normally, when infrastructure construction kicks off, that boosts demand for residential properties around these developments and that spells opportunity for property developers to increase their investments in the area,” Uthai said.

Bang Sue has already attracted more residential projects launch in the area since construction began on the Purple Line in 2013.

Prices for land and homes around Bang Sue have increased on average by 13 per cent a year and 10 per cent, respectively, Uthai said.

According to survey by property agency Knight Frank (Thailand), at the end of the first quarter of 2018 launches of condominium projects in Bang Sue-Tao Poon have released 32,000 units, valued at about Bt100 billion. Up to 95 per cent of this stock has been sold.

Knight Frank (Thailand)’s managing director Phanom Kanjanathiemthao said, in an interview with The Nation before the start of the seminar, that condominium prices around Bang Sue have increased from an average of Bt95,000 per square metre in 2017 to Bt112,500 in the first quarter of this year – up 18.42 per cent. Land prices have risen from an average of Bt250,000 per square wah five years ago to Bt450,000 at the end of 2017 – soaring 80 per cent.

“We believe that if the Bang Sue Grand Station project proceeds in line with the master plan that this will drive strong demand for residential properties in this location,” Phanom said. “However, the government also has to develop a road system to link with the rail system. This is the way to drive Bang Sue to become a new CBD for Bangkok.”

Infrastructure projects often have social benefits which are not priced into project revenues, and traditionally considered better addressed by subsidised public finance.

While gaining in popularity in emerging markets, private funding for infrastructure projects is still insufficient to meet the ever-growing demand.

During the recent World Bank Singapore Infrastructure Finance Summit 2018, Asean finance ministers unanimously agreed on the need for greater private-sector participation to fund the region’s infrastructure. Of the US$3 trillion that Asean needs for infrastructure by 2030, only 30 per cent is being met by existing funding. To address this shortfall, Asean aims to attract private investors by improving laws and regulations to make infrastructure a more attractive asset class. In addition, better financing co-ordination can boost public-private partnerships (PPPs).

Private funding sources have in recent years grown in diversity, from commercial banks, specialist infrastructure funds, pension and insurance funds to green bonds. This development has provided ideal conditions for co-finance and blended finance in infrastructure. Blended finance combines grants, budgetary support, and concessional assistance from development organisations with private funds to create a bigger pool of infrastructure financing. Co-finance involves market priced public and private financing in partnership to finance projects. An example is the use of partial guarantees by public entities to increase projects’ bankability and attract private-sector participation.

The preferred creditor status of multilateral development banks (MDBs), alongside the use of grants, subsidised loans, and additional financing from commercial banks and private investors, are a winning combination. However, co-finance and blended finance have yet to take off in Asia. According to the Asian Development Bank (ADB), public funding still accounts for about 92 per cent of the region’s infrastructure investments.

There remain challenges to accelerate the use of the blended finance approach. Infrastructure stakeholders prefer direct funding on concessional terms, but there is a finite amount of available aid, concessional finance, and budgetary support. MDBs and development finance institutions’ (DFIs) loans and guarantees are defined by country exposure limits. And while private investors are growing more open to long-term infrastructure investments, ineffective projects structuring continues to keep private money at bay. There are also gaps in information flows and co-ordination between the private and public sectors which inadvertently crowd out private investors.

To crowd in private money, the public sector needs to invite participation from commercial banks which are key intermediaries to help MDBs and DFIs mobilise private capital. These lenders are able to spot on-the-ground opportunities, and they possess local knowledge and project finance know-how to progress infrastructure financing proposals in partnership with development organisations. They can structure, underwrite, and syndicate significant sources of private funds.

MDBs and DFIs need to enhance their current guarantee products to attract commercial banks’ participation. Such products provide partial comprehensive cover to private lenders resulting in lower financing costs and longer financing periods to match project revenues with repayment terms. Guarantees can also be used to cover specific transaction risks, such as backstopping the obligations of government contractual obligations to make projects more bankable for private financing. Such partial risk guarantees have a lower credit exposure that enables MDBs to better leverage scarce resources than direct loans. In developing markets where credit standing isn’t always strong enough to secure the necessary private funding, support from public agencies is crucial. MDBs and DFIs should also ensure consistency of accountancy treatment, and provide capital relief and free transferability of guarantee products. This will facilitate the issuance of capital-efficient and freely-traded financing instruments that are liquid and competitively priced.

To meet evolving needs, MDBs and DFIs should introduce new products, including interest rate and foreign exchange swap guarantees, local currency guarantees, as well as back-ended and first-loss guarantees. These can mitigate interest rate and currency risks, and help match the earning profile of projects with repayment obligations. While earnings of most large infrastructure projects in emerging Asia are in local currencies, development finance remains overwhelmingly denominated in US dollars. The cost of putting in place interest rate and currency swaps to hedge foreign-exchange risks can be significantly reduced with swap guarantees by MDBs and DFIs. Simultaneously, efforts to deepen local-currency financing markets can be enhanced by making available guarantees in respective local currencies.

These guarantees can blend in private funds under a risk-sharing arrangement and improve the risk-grading of projects, leading to an increase in sustainable and bankable infrastructure projects.

As we strive to generate better infrastructure funding solutions, a platform is needed for governments, MDBs, DFIs, and private-sector players to interact and share ideas about blended finance and co-finance. The Global Infrastructure Forum hosted by the World Bank is a great start which can be expanded to include regional focus groups. Participants can discuss topics including new products and the harmonisation of existing product features. Discussions can also centre participants’ focus on increasing the pool of bankable transactions to avoid financing efforts from competing for a smaller subset of already-bankable projects.

While there’s greater demand for direct lending programmes in Asia than the use of MDBs’ guarantee programmes, this scenario may change as the region’s infrastructure development accelerates.

Newer entities like the Asian Infrastructure Investment Bank and the New Development Bank are already actively scouring the region for co-financing opportunities.

Infrastructure is not a go-it-alone initiative. Blended finance built on partnerships between MDBs, DFIs, and commercial banks that leverage the capital markets is the inclusive piece of an infrastructure puzzle that the region needs. Only with its growth can we expect accelerated infrastructure development that will drive benefits for our collective society.

Contributed by SURYA BAGCHI, Global Head of Project & Export Finance of Standard Chartered Bank.

The two countries agreed to cooperate in the exchange of enforcement information regarding capital markets and in “capacity building of human resources”.