}

25 February 2021

Infrastructure Asia (“InfraAsia”), Singapore’s platform for connecting infrastructure supply and demand, has launched a core suite of partially standardised project finance loan documents to help accelerate infrastructure projects in Asia and close the investment gap. This was stated by Indranee Rajah, Minister in the Prime Minister’s Office, Second Minister for Finance and National Development (“Minister”) in her Note titled “Standardisation - A Bridge to Greater Infrastructure Investment”.

This project was led by InfraAsia, with document drafting co-led by Allen & Gledhill. The Asia Pacific Loan Market Association (APLMA) was a major partner in the project, with their Singapore law standard documents providing the base templates from which the core project finance documents were developed.

The Minister had announced in 2019 that InfraAsia decided to develop a core suite of standard project finance loan documents for stakeholder use. Under this initiative, 50% of the loan documentation, covering common clauses, is standardised, leaving the balance 50% for customisation according to individual project needs.

Completed and launched on 31 December 2020, these documents comprise the following (which are found on InfraAsia’s website www.infrastructureasia.org):

Using these documents will:

  • Expedite projects: Standardising 50% of the contract reduces time spent on contract negotiation and consequent costs. It also enhances transparency of loan processes.
  • Narrow the investment gap: By accelerating the deployment of financing, it will lead to greater infrastructure investment in Asia.
  • Pave the way for a secondary market in infrastructure debt: Standardised clauses result in a more homogenous market for project finance loans. This increases refinancing prospects and securitisation of these loans, and will help open the market to other pockets of liquidity such as bond investors, pension funds, mutual funds, and family offices.

Reference materials

The Minister’s Note is available on the APLMA News webpage stage.aplma.com/news/aplma-news