As traditional asset classes face heightened market volatility, investors are increasingly turning to infrastructure for its stability and long-term returns. With private capital filling critical gaps, Asia's infrastructure boom offers opportunities for resilient and impactful investments amid global uncertainties.

In an interview with The Asset, Adrian Mucalov, head of long-life Infrastructure at Actis, highlights this shift: “Absolutely, we are seeing an increasing interest from Asian investors in infrastructure. This is largely driven by investors seeking resilient, long-term contracted cash flows as well as diversification.”

In May 2025, Actis announced it had completed fundraising for its second Actis Long Life Infrastructure Fund ( ALLIF2 ), with US$1.7 billion in commitments.

The Actis long-life infrastructure strategy invests in brownfield infrastructure assets across growth markets in Asia, Latin America, Central and Eastern Europe, the Middle East, and Africa, focusing on operational enhancements rather than heavy capital expenditure. This enables investors to benefit from predictable, long-term income with moderate leverage. Core sectors include renewable energy, electricity transmission and distribution networks, district cooling, toll roads, and digital infrastructure.

 “Asia, in particular, is experiencing a rapid rise of energy and digitalization demands due to strong population growth and industrialization, creating a scale opportunity for private sector investment,” Mucalov says.

Aligned with global trends

This trend has fuelled interest in sustainable projects, aligning with global diversification trends as capital shifts from developed economies like the United States to emerging markets.

In Asia, the infrastructure financing gap is staggering, with a multi-trillion-dollar shortfall projected over the next two decades amid surging demand for energy and digital services. Governments, facing fiscal pressures, are relying on private capital to bridge the gulf.

“Asian LPs ( limited partners ) also often have a dual mandate, which is balancing their financial returns with strategic national goals, such as digital sustainable growth, energy security, and domestic development. This focus on sectors like renewable energy and transport differentiates Asia, where investment ecosystems are evolving rapidly despite starting from a lower base,” Mucalov says.

"Asian LPs" refers to investors from Asia, such as sovereign wealth funds, pension funds, or other institutional investors, who invest in infrastructure funds like those managed by Actis. The mention of their "dual mandate" indicates that these investors often aim to achieve both financial returns and strategic objectives, such as supporting national priorities like digital infrastructure, energy security, or sustainable development.

In India, for example, renewable energy capacity has reached 200 gigawatts, with ambitions to hit 500GW by 2030. “The key is in the due diligence of the assets,” Mucalov says. “Investors with local presence and specialist skills are at an advantage here.”

Sectors that are in demand include digital infrastructure and renewables, where overcrowding risks exist but are mitigated by vast unmet needs. Data centres in hyperscale hubs are booming, yet penetration lags behind amid soaring digital demand. Renewables face similar shortages across Asia.

Focus on decarbonization

“Beyond these well-known sectors, Asia also offers real opportunities in other infrastructure areas such as cooling systems and transport,” Mucalov says. “Decarbonization is a key priority for the region.

“Asia’s economies have a much higher energy demand growth compared to the West, and this forces faster adoption of renewable or sustainable infrastructure. Asia is accelerating its energy transition faster than the West, propelled by explosive energy demand and decarbonization pledges.”

In the Philippines, Actis has invested in the MTerra Solar Project, which aims to power 2.4 million households. The project, with 3,500 megawatts of peak capacity complemented by a battery energy storage system with a capacity for 4,500 megawatt-hours, marks the largest foreign direct investment for a greenfield infrastructure project in the country.  

Looking ahead, Asia is poised to become the world's infrastructure growth engine, already comprising 40% of global GDP. Markets like Vietnam, the Philippines, and Malaysia will lead in renewables and digital expansion.

Clean energy and digital infrastructure are sectors that will be growing rapidly in the next decade in terms of infrastructure investments. “I think clean energy is in such demand it will remain a key driver, and digital infrastructure is certainly a sector ripe for tremendous growth, with an emphasis on sustainable, energy-efficient data centres,” Mucalov says.