This report forms part of a broader, multi-year initiative aimed at examining legal and regulatory barriers to quality infrastructure investment across Asia, with a particular focus on India, Indonesia, and the Philippines. These three countries are projected to require the highest levels of climate financing in the region. In response to the scale of the challenge, a commitment has been made to allocate USD 10 billion towards sustainable infrastructure development between 2024 and 2029.
India, Indonesia, and the Philippines face significant climate-related investment needs. India is estimated to require approximately USD 10 trillion to achieve its net-zero emissions target by 2070. Indonesia’s national planning agency has projected climate finance requirements of USD 40 billion up to 2025, increasing to between USD 270 and 350 billion from 2026 to 2030. Although the Philippines has not yet established a net-zero target, its government investment arm has outlined a strategy aimed at avoiding 75 per cent of greenhouse gas emissions between 2020 and 2030. These figures underscore the urgency of mobilising both public and private capital to meet climate objectives and support sustainable development.
Previous research has identified legal and regulatory constraints as key impediments to infrastructure investment. This study builds upon that foundation by seeking to identify specific barriers and propose targeted policy measures that could enable greater private sector participation in complex, multi-year infrastructure projects. The analysis is aligned with the G20 Quality Infrastructure Investment (QII) principles and supports the objectives of the ninth United Nations Sustainable Development Goal, which promotes resilient infrastructure, inclusive industrialisation, and innovation.
The primary objective of this research is to enhance understanding of the policy actions required to attract private financing to infrastructure projects. Such projects are inherently long-term and structurally complex, often requiring coordination across multiple jurisdictions and stakeholders. Following a preliminary note presented at a high-level seminar in Indonesia in July 2022, further contributions were included in the OECD publication Improving Landscapes for Sustainable Infrastructure Financing and in a background note presented at the October 2022 Task Force meeting.
The report has been developed through a combination of desk-based research and interviews with government officials, national institutions, and private investors. An iterative approach was adopted to identify key areas of concern for private investors and to develop recommendations tailored to the specific contexts of the three countries. Three priority areas were selected for further exploration, guided by the G20 Principles on Quality Infrastructure Investment (QII).
The first area concerns challenges related to land acquisition, ownership, and investment facilitation. These include the need for stronger alignment between national and local regulations and increased openness to foreign investment. In all three countries, approval, bidding, and award processes are often lengthy and complex, and ownership structures remain partially liberalized. Addressing these issues requires improved regulatory coordination across jurisdictions and the implementation of initiatives such as harmonised national project lists. These measures can help reduce regulatory discrepancies and duplication, thereby enhancing the clarity and attractiveness of project pipelines. This area corresponds to QII Principle 2, which emphasises economic efficiency through life-cycle cost considerations, Principle 3, which calls for transparency in environmental impact assessments, and Principle 6, which advocates for openness and transparency in procurement processes.
The second area focuses on the availability of innovative and alternative investment vehicles. These mechanisms are essential for creating a more enabling environment for foreign investment. Blended finance instruments, in particular, play a crucial role in mobilising capital for projects that are either unbankable or marginally bankable. Larger-scale projects tend to be more attractive to institutional investors and can serve to strengthen blended finance platforms. Investment platforms, rather than direct asset investments, may offer more scalable and flexible opportunities for private investors. Partnerships with local stakeholders, including banks and multilateral development institutions, can facilitate the negotiation of incentives and guarantees, thereby improving the cost-effectiveness and risk profile of investments. This area aligns with QII Principle 2, which encourages the use of innovative technologies and financial instruments throughout the infrastructure lifecycle to enhance economic efficiency.
The third area addresses the integration of Environmental, Social, and Governance (ESG) considerations into infrastructure project preparation and structuring. Incorporating ESG criteria is essential for aligning projects with investors’ long-term strategies and compliance requirements. In many South and Southeast Asian countries, ESG frameworks remain underdeveloped and require regulatory reform to meet international standards. Fostering public-private dialogue will be instrumental in embedding ESG considerations into decision-making processes and in identifying suitable financial instruments, such as green bonds. Moreover, the integration of ESG standards will facilitate compliance with reporting and measurement requirements, thereby improving transparency and accountability. This area supports QII Principles 3 and 5, which emphasise the integration of environmental and social considerations into infrastructure investments.
The next section of the report presents an overview of the general investment landscape for infrastructure in South and Southeast Asia. It highlights common regional challenges that inform the shared experiences of India, Indonesia, and the Philippines. These include issues related to regulatory fragmentation, limited institutional capacity, and the need for more robust project preparation frameworks. The section also examines the opportunities for sustainable infrastructure investment, the capacity of national administrations and institutions to address these challenges, and the regulatory reforms that could support transformative change.
By identifying and addressing these shared challenges, the report aims to reinforce alignment with QII Principle 1, which advocates for maximising the positive impact of infrastructure to achieve sustainable growth and development. The findings presented herein are intended to inform policy dialogue and support the development of actionable strategies that can unlock private investment and accelerate progress towards climate and development goals.