DESPITE the disruption and havoc caused by Covid-19, most of Asia-Pacific based infrastructure companies have low exposure to the pandemic, that’s according to analysis from Moody’s Investor Service (Moody’s) which did a study of close to 200 infrastructure companies in the region.

According to the firm, sectors that provided essential goods and services are generally protected from volume risk such as water and gas companies.

“Of the nearly 200 infrastructure companies that we rate, 68% have limited direct exposure to the coronavirus-related disruptions either due to the essential nature of their goods and services, such as regulated utilities, or the absence of volume risk, such as project finance or public private partnership structures,” explains Ralph Ng, assistant vice president and analyst at Moody’s.

“That said, these sectors are not completely immune from the disruption,” adds Ng. “For example, power utilities will likely see demand drop as business and industrial activity declines, while some of the regulated utilities may see returns drop due to low interest rates.”

Nevertheless, 9% of infrastructure issuers rated by Moody’s have high exposure to Covid-19. They include companies in the transport sector such as airports, who have experienced the brunt of international calls for social distancing and the suspension of non-essential travel.

“Unlike during previous negative shocks, such as the 9/11 terror attacks and the 2008 financial crisis, governments may choose to maintain the restrictions on people’s movements even as the crisis abates, making the duration and extent of the airports’ recovery uncertain,” states a recent Moody’s research note.

Issuers such as Australia Pacific Airports Melbourne and Delhi Airport International are on negative outlook and review for a downgrade, respectively, from Moody’s.

Other affected infrastructures include toll roads, in particular toll operators in China which are currently facing significant operating losses as a result of the Ministry of Transport’s toll-free policy to support economic recovery in the country from Covid-19.