Southeast Asia’s Cities Need New Money Moves — OECD Report Points to Blended Finance, Local Credit Reform and a Bigger Role for Private Capital
An OECD report released this spring warns that rapidly growing cities across Southeast Asia face a funding gap for green, resilient and inclusive urban development unless governments diversify financing instruments, strengthen subnational creditworthiness and crowd in private investment through targeted risk-sharing tools and project pipelines. The report, Financing Sustainable Cities in Southeast Asia: Diversifying Instruments and Leveraging Private Investment, focuses on the ASEAN‑5 — Indonesia, Malaysia, the Philippines, Thailand and Viet Nam — and argues that existing public budgets and traditional bank lending will not be enough to deliver mass transit, flood defences, clean water, affordable housing and low‑carbon energy at the speed cities need. The analysis, issued by the OECD and presented at regional events in April–May 2025, lays out practical steps for national and local policymakers to mobilise a broader mix of instruments — municipal bonds, green and sustainability bonds, blended finance facilities, public‑private partnerships with stronger safeguards, and value‑capture tools — while improving governance and transparency to make urban projects bankable for institutional investors (OECD report).