This marks the beginning of new growth in project finance in Asia, the firm claims, and justifies its pressure on that market.

The recent Dealogic Project Finance Review for 2004 reveals that over the past year, Allens Arthur Robinson was credited with 27 deals and was apportioned deal credit of US$5.2 ($6.84) billion. This gave the firm a 28.9 per cent market share in Australasia and an 11.9 per cent market share in the Asia Pacific.

Accepting that its strength is in Australasia, the firm now sees Asia as a region for potential growth in project finance. The firm’s push, according to executive partner, Asia Pacific and banking and finance, Jim Dunstan, “is now very much focused on Asia”.

“To win Asia Pacific as well this year gives us a boost as we grow our Asian office network and strengthen our resources in the region,” he added.

Asian project finance is taking off, Dunstan claimed — “It is a growing market”. He agreed, however, that “looking at the figures, Australia still leads”.

Allens is making some strategic moves to enhance its position in the region. The “major development”, Dunstan said, is that one of its leading project finance partners, Steve Pemberton, has moved to Singapore this week. Having made his reputation on Melbourne City Link financing and having recently acted on the Western Sydney Orbital deal, Pemberton is in Singapore to focus on the region.

“[Allens] sense[s] that the Asian project finance market will pick up quite sharply and we want to be there from the beginning. We’ve been there 25 years so we are on the ground and are picking up the message that things are about to grow,” Dunstan said.

“We feel there are opportunities in this part of the world and [Pemberton] will look at various countries. China is an exploding market, but most of the project finance deals we have done to date have been in South East Asia — Korea, Thailand and others,” he said.

“Following recent announcements of infrastructure projects, we also anticipate upcoming opportunities in Indonesia,” he added, referring to the Indonesian Government’s last week flagging a large number of upcoming infrastructure deals. Offering 37 projects valued at about 100 trillion rupiah ($14.1 billion) to both local and foreign investors this year, the government hopes to boost economic growth and reduce unemployment there, according to Bloomberg.

Many of these Indonesian projects would be using the project financing model we use here, according to AAR’s Dunstan.

Partner Bruce Johnston has been based permanently in Jakarta, in association with Indonesian firm Wiriadinata & Widyawan, since the New Year.

While Allens moves into South East Asia and strengthens its position there, a number of the UK’s top four or five firms are reducing in size, Dunstan said. They are leaving because Asia, particularly over the last five or six years, has become immensely competitive, he said. “You put an expat in Asia and their hourly [fees] are at a rate where locals won’t pay.” The firms, he suggested, were prepared to do this when things were “terrific” in the US and UK, “but now things are tougher so they are trimming the offices down to be more competitive”.

This change gives Allens access to more opportunities, because of its basic pricing structure. “To put it bluntly, our partners don’t earn as much as theirs do,” said Dunstan.

Additionally, the cost structures of the European and US-based firms are higher than the Asia Pacific firms, he said, suggesting it was therefore easier for Australian firms to set up there.

Australasia saw the largest regional volume increase over the past year, where volume rose 89 per cent to US$18 ($23.68) billion from US$9.5 ($12.5) billion.