Asia-Pacific Deals of the Year 2023: Strong foundations for a regional rebirth
The last 18 months have looked more like a process of consolidation than rapid advance in the Asia-Pacific region. But the best deals of 2023 provide the foundations for a serious take-off in activity.
For a region that is home to 60% of the world’s population, Asia-Pacific has tended to punch well below its weight in project finance volumes. While 2023 was a good year for volumes across the region - its $86 billion in volumes (16.4%) was up sharply on 2022’s $71.2 billion - it still accounts for a little over 16% of global volumes (all figures courtesy of Proximo Intelligence).
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There are a variety of explanations for this underperformance, and few of them have anything to do with economic growth. As a result governments and multilaterals have tended to focus on developing capacity to bring more private infrastructure financings to market, and improving liquidity among lenders active in the region.
Arguably it has been easier to improve liquidity, through a process of improving regional bank education and developing new funding mechanisms, than it has been to persuade governments to bring forward more bankable projects and regulatory regimes. But there are signs that when the conditions are right both developments are possible.
Proximo has selected a small number of transactions that highlight the green shoots of an emerging blockbuster market as Deals of the Year. It has tended to favour deals that pushed the regional envelope a little over deals that were mega-financings in their own right.
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The list of winning Asia-Pacific deals is as follows:
Asia Renewables - Monsoon Wind
Monsoon brought together six sponsors, six public finance lenders, three commercial banks and three blended finance subordinated donors in support of a Lao onshore wind farm that is exposed to curtailment risk. The $670 million debt financing for a 600MW project was the largest syndicated project financing for the largest wind project in south-east Asia and the first wind deal in Laos.
Asia Digital Infrastructure - ECX JKT01 & JKT02 Data Centres
Digital infrastructure has taken off with a vengeance in the region, and there were three data centre projects that could have credibly won in this category. EdgeConneX won for its two financings for Indonesian data centres by closing a large sustainability-linked project loan with a solid commercial bank group and without leaning on a local equity partner.
Asia Water & Waste - Soc Son Waste Refinancing
This commercial bank-led refinancing replaced a shareholder loan package, which in turn refinanced a Sinosure-led construction financing. The deal provides a limited-recourse financial structure for Vietnam’s largest operating waste-to-energy plant, a facility that meets 70% of the needs of the city of Hanoi.
Asia Chemicals - Perdaman Ceres
The financing for this A$6 billion fertiliser project in Australia attracted a rare equity commitment from a financial sponsor, as well as debt commitments from two domestic DFIs. The modern, low-cost plant represents the largest investment in the sector ever in Australia.
Asia Refinancing - New Royal Adelaide Hospital Refinancing
This A$2.14 billion refinancing of the debt package in support of the PPP concession for a new hospital in South Australia bedded down the ground-breaking green loan that closed in 2021. The project now has the support of 15 lenders and has established the viability of green and sustainable labelling in PPP in the region.
