Of the world’s 37 megacities with more than 10 million inhabitants, 22 are in Asia. These cities continue to grow rapidly as more and more people move in to take part in the region’s fast-paced economic development. By 2030, 550 million more Asians will be living in cities compared to today – with the fastest growth in Southeast Asia.

This rapid urbanisation puts immense pressure on existing infrastructure such as roads, public transport, electricity grids and wastewater systems. Bridging the gap will require investments of USD 26 trillion, according to the Asian Development Bank.

Birgitta Lindström Kruk, Head of Export Finance at SEK (Swedish Export Credit Corporation), sees strong potential for Swedish companies:

“Volvo and Scania are developing electric and biofuel-powered buses that contribute to cleaner air in major cities, while construction equipment from Volvo CE is being used for road building and other infrastructure projects,” she says.

Major shortcomings in Indonesia’s public transport

Johan Fredriksson, Country Risk Analyst at the Swedish Export Credit Agency (EKN), points out that rapidly growing cities urgently need to invest in housing, water purification, and transportation systems.

“Anyone who’s taken the bus in Manila knows there’s plenty of room for improvement in public transport – and that opens the door for Swedish companies working with everything from vehicles and software systems to traffic signals and transport planning,” he says, adding: 

“Similarly, investments being made in ports, airports, roads and digital infrastructure will drive demand for relevant hardware, software and services.” 

Manila’s traffic congestion is currently ranked among the worst in the world and is estimated to cost the local economy USD 22 billion annually, according to Business Sweden – the equivalent of 4.5% of the Philippines’ GDP in 2024. 

In the vast and geographically fragmented country of Indonesia, poor infrastructure holds back development, driving up costs for businesses and limiting people’s access to work and education. Logistics and transportation account for 17% of business costs in Indonesia – compared to under 10% in comparable countries.

Build relationships with EPC companies

Many large infrastructure and urban development projects are driven by EPC companies (Engineering, Procurement, Construction), which often engage subcontractors from different countries and bring together financing from various lenders. One effective way for Swedish companies to get involved in these projects is to build relationships with EPC firms, says Birgitta Lindström Kruk:

“SEK and EKN work with many international EPC companies and help make financing more attractive when Sweden-based suppliers are involved. This increases the incentive for large international EPC contractors to buy equipment and services from Swedish subcontractors.”

Many of Sweden’s largest companies are already well established across Asia and collaborate with EPC companies. For subcontractors, getting into these companies’ value chains can be a strong entry point to the market – and can open the door to EPC contracts. Business Sweden’s advisors can also help connect your company with potential partners. 

Want to know more about how we support companies expanding into Asia? Read more here.