Southeast Asian countries need to invest $184 billion per year in infrastructure for the next eight years to sustain economic growth, reduce poverty, and respond to climate change, the Asian Development Bank (ADB) said. Woochong Um, ADB managing director general, said narrowing the infrastructure financing gap will be critical for economies to meet their economic and social goals, as well as bounce back from the Covid-19 pandemic. In the Philippines, the Marcos administration is targeting to spend equivalent to five percent of its economy, or gross domestic product, on infrastructure projects annually. Southeast Asia’s public sector has traditionally been responsible for virtually all public and social infrastructure development in the subregion, up to 92 percent, but it has been unable to bridge the widening deficit between funding needs and actual capital spending. Tight government finances due to increased energy costs and reallocation of funds to social protection and food security programs amid the pandemic and geopolitical risks have further limited public spending on infrastructure. For this reason, Um said private sector participation is key, citing that there are more than $200 trillion of private capital invested in global capital markets. “Innovative financing mechanisms are needed to attract private and institutional capital—along with public funds—to fund critical infrastructure that will create jobs and generate revenue for local economies,” Um said. “A conducive policy and regulatory framework must be built to reduce risk, offer credit enhancements and de-risking facilities, and provide investment opportunities for all stakeholders to collaborate” he added. Infrastructure financing requirements are extremely large and limited public funds stand in the way of sustained large-scale investments. Another impediment to infrastructure development is the perception that its funding is a government responsibility, which kept private investors at bay as few participation opportunities are made available to them. In addition, political instability, weak governance, inadequate regulatory capacity, and the absence of a solid pipeline of viable investment-ready projects also contribute to underinvestment in infrastructure. These projects often involve high up-front capital cost, long gestation periods, risk of uncertain return, and a social benefit that may not meet the financial risk–return appetite of private investors. These obstacles and perceptions have prevented the mobilization of vital funds resulting in stalled investment decisions.