In the Hot Seat with Lavan Thiru: Embracing fresh perspectives to sustainable infrastructure
Our new content series ‘In the Hot Seat’ invites key industry leaders to share their first-hand perspectives on Asia’s infrastructure development. Lavan Thiru, Executive Director of Infrastructure Asia, explores the need for innovative and sustainable approaches to tackle Asia’s long-standing challenges in infrastructure.
Archaic mindsets will not fix our new climate reality. The traditional approach to infrastructure is changing because it often overlooks the importance of resilience, sustainability, and inclusivity. By rethinking the existing challenges of current infrastructure development models, we can explore new angles to implement sustainable solutions for Asia's infrastructure.
Today, the increasing allocation by private investors to infrastructure is a positive sign. Besides capital, the private sector provides technical expertise and access to technological innovation. Infrastructure should be placed in the hands of parties that are best suited to deliver its intended benefits. This does not necessarily imply involvement from only the public or private sector. Increasingly, public-private partnerships (PPPs) are injecting new impetus into evergreen areas of sustainable infrastructure: energy efficiency, circularity, and decarbonisation. But, as a public sector, we need to be able to demonstrate and deliver bankable projects, or else private investors will find other opportunities.
Based on the Global Infrastructure Hub’s Infrastructure Monitor 2023, while private investment grew significantly after stagnating for almost a decade, it grew the most in high income countries, whereas middle and low-income countries recorded modest growth. While this may seem counter-intuitive from a demand perspective, anecdotally, Infrastructure Asia’s partners have shared that the risk-return trade-offs for developed markets better suit their investment appetite. As such, the pace at which the private sector invests in sustainable infrastructure projects for emerging Asia is far slower than it should be.
In 2024, we start with one certainty: the time to act is now. So, how will Infrastructure Asia move forward in advancing sustainable infrastructure in the year ahead?
Embracing strategic partnerships and collaboration
PPPs have become Asia’s mainstay of infrastructure development, accelerating advancement, and encouraging cooperation between public and private entities. The Philippines’ Build Better More programme is one example, where almost half of the proposed infrastructure projects were supported through a PPP framework.
Infrastructure Asia plays a critical role in enhancing regional cooperation to catalyse more bankable projects in Asia. In 2024, we are “flipping the switch”. Beyond talks and frameworks, we will place more emphasis on promoting deeper cooperation and establishing vital connections among governments, partners, and suppliers. This is crucial because, even with the abundance of infrastructure projects in Asia, private investors still find it difficult to find good investment possibilities in the region. We started this in 2023 with AIF Conversations where we created a platform to focus our efforts on projects and bring together both project owners or sponsors and solution providers. From the Green Energy Auction Programme and Modernisation and Expansion of the Ninoy Aquino International Airport in the Philippines to the Decarbonisation of Industrial Parks in Bangladesh and India, many solution providers and investors based in Singapore were able to access these project opportunities. While connecting project owners with investors is not a new task for us, we will significantly magnify our efforts in this regard as we devote more time to project origination and development work.
Always seeking like-minded partners who share our vision of “Making Infrastructure Happen”, our InfraAsia Project Portal gives industry players and infrastructure stakeholders a one-stop platform to connect and solve the challenge of poor visibility of upcoming projects in the region. It adds value to the projects by offering better security, neutrality, inclusivity, and relevance to project owners and solution providers. I encourage everyone to tap on the portal to explore the infrastructure opportunities in Asia.
However, as responsible global citizens at the forefront of infrastructure development in Asia, we still have a long road ahead in establishing an enabling environment for sustainable infrastructure projects. Fostering greater awareness and understanding of the long-term benefits of sustainable practices among stakeholders, coupled with continued innovation in financing models, remain crucial aspects of our mandate.
Last year, we also participated in over 15 speaking engagements to raise more awareness of our work and promote sustainable infrastructure development across the region. We also launched the ASIA Panel Report, a collaborative effort with our partners to offer perspectives on the key enablers that unlock and scale sustainable infrastructure in Asia. This year, we will start off strong with the Growing Infrastructure Course in February, focusing on water and waste management.
Fresh perspective ignites new possibilities
With 92% of the UN's Sustainable Development Goals (SDGs) relying on infrastructure, its development has become more complex than ever before.
Climate change has pushed sustainability to the forefront, but we need more than just new technologies — we need a shift in perspective. This does not necessarily mean over-engineering infrastructure projects with new ideas or technologies or delivering benefits which are not well harnessed at the expense of cost. It can also mean seeing new opportunities in existing tools and models.
For example, the ASIA Panel Report outlines a systems-thinking approach to pave the way for a circular economy and future-proof urban planning. Using the water-waste-energy nexus approach, the Tuas Nexus project in Singapore is a great illustration of this system, applying technology to regenerate materials and waste, and create closed-loop cycles for energy and water in the plant. Infrastructure should not be developed in isolation and could be co-located for complementary benefits.
Sustainable infrastructure is the key to a low-carbon future, and energy efficiency stands as a critical building block to achieve this goal. Globally, the built environment accounts for 79% of greenhouse gas emissions. Here in Asia-Pacific, we account for more than half of global energy consumption, with 85% coming from fossil fuels. But transitioning from fossil fuels requires a fundamental shift in energy production, and this requires us to turn to technological innovation, among other aspects, as a strategy in building the right energy infrastructure. While the technologies required to achieve deep cuts in global emissions by 2030 are already available, and the policies to support their adoption have been proven, the International Energy Authority (IEA) stated that achieving net zero emissions by 2050 requires two key components: widespread adoption of emerging technologies not yet on the market, and the continued rapid deployment of existing proven technologies.
We have proven technologies ready for scaling clean energy deployment. Solar photovoltaics (PV) is becoming a clear choice among industry players to meet energy needs, while investments in energy storage solutions such as Battery Energy Storage Systems (ESS) mitigate the intermittency of renewable energy. The current cost of battery ESS is 75% lower than it was ten years ago. By the end of the decade, battery ESS cost is projected to fall further to less than half of today’s price.
Proven technologies present exciting growth opportunities to accelerate the region’s transition to sustainable practices. Stemming from well-established best practices and learnings, they offer a reliable foundation that encourages more improvements to shape sustainable infrastructure in Asia.
Bringing a future-ready mindset, embracing fresh thinking styles, and leveraging existing technologies, we can unlock new possibilities for sustainable infrastructure.
Advancing sustainable infrastructure in Asia
Asia is forecasted to invest US$3.3 trillion in power generation over the next 10 years, supporting the COP28 goal of tripling renewable energy capacity to 11,000 gigawatts by 2030.
Energy transition and decarbonisation will continue to be key trends driving sustainable infrastructure in 2024. These trends, along with the integration of circular economy principles, will enhance the overall economic viability of infrastructure projects, fostering greater innovation, and long-term economic growth for the markets.
I foresee the need to approach these trends from two sides — hardware and software. While we are making great strides in building solar panels, wind farms, and energy plants, we must also address the uneven energy distribution happening across Asia. This calls for smart systems combining software and hardware to control energy transmission, identify areas of inefficiency, and simplify processes so that distribution can be allocated where needed. We are already seeing this, from Singapore’s Intelligent Energy System (IES) testbed project to the National Smart Grid Mission (NSGM) in India. But more of such systems are needed to enhance efficiency and resilience in sustainable infrastructure.
In addition, cross-border grids, like the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP), have the capability to improve interconnectivity and energy security in the markets by leveraging low-carbon and renewable energy sources. Infrastructure Asia is looking forward to work on such interconnector projects.
The Asia Infrastructure Forum (AIF), our flagship event happening on 4–5 June 2024 will discuss transforming our approach to sustainable development in Asia. Aptly themed Sustainable Infrastructure: Transforming Asia’s Journey, AIF 2024 will explore the unique challenges and opportunities in the region that require us to adopt fresh thinking and strategies to support each market’s specific needs. As infrastructure continues to evolve, you will find us at the forefront of change, ensuring the infrastructure is the right fit for the people that it serves. Working hand in hand with our partners, we have no doubt that we can advance the sustainable infrastructure agenda.
