by LYDIA NATHAN / graphic by MZUKRI MOHAMAD

THE plans for transitioning infrastructure to net zero is being viewed more importantly, today, as companies are becoming more aware of meeting targets.

Asian Infrastructure Investment Bank (AIIB) senior economist Dr Thia Jang Ping said all infrastructure investments need to be consistent with net-zero transition despite the fact the infrastructure market saw a sharp decline last year.

“In 2020, several sectors including transport, conventional power and renewables saw a large drop in projects, and it was a difficult year for energy. This has crossed over to 2021 for the projects in the pipeline,” he said during the virtual ASEAN Infrastructure: Realigning Priorities briefing yesterday.

According to Thia, there is a risk of stranded assets if net-zero transition is not taken into account as investors and regulators are demanding greater Environmental, Social, and Corporate Governance (ESG).

“For stranded assets, there are tools one can use like in the energy field. Calculating the carbon intensity will enable one to see which is the most carbon pollutive. So before people make investments, all this can be recorded with not much margin for error, even for fossil fuel assets,” he said.

Thia said digitalisation has accelerated due to the Covid-19 pandemic, as the demand for digital infrastructure assets is robust.

“For example, data centre funds are in demand, while greenfield infrastructure remains important to prevent digital divides,” he said.

Thia added global financial markets are liquid and spillovers have helped emerging economies cope with the fallout of the pandemic. So while financial conditions have tightened, it is not as much as feared, he explained.