SINGAPORE: On Sunday, Dec 3, MAS shared its collaboration with ACP, IFC, and Temasek on a partnership for green investments in Asia. The collaboration, with a primary focus on Southeast Asia, aims to tackle the financing challenges hindering sustainable infrastructure development in the region.

Developing Asia faces the pressing need for an annual investment of US$1.7 trillion or around S$2.2 trillion until 2030 to sustain growth while aligning with climate goals. However, numerous green infrastructure projects struggle to secure commercial financing, especially during the critical project development and construction phases.

To bridge these financing gaps, ACP, IFC, MAS, and Temasek have formally signed a Memorandum of Understanding (MOU). The partnership seeks to leverage blended finance, combining concessional capital from philanthropic and public sectors with private capital, to make green projects more financially viable. The sectors of focus include renewable energy and storage development, electric vehicle infrastructure, sustainable transport, water, and waste management.

The MOU, signed at the 28th Conference of the Parties (COP28) to the United Nations Framework Convention on Climate Change, underlined the parties’ commitment to addressing environmental and social goals. These goals include meeting carbon reduction targets, generating employment, improving livelihoods, and enhancing community resilience against the impacts of climate change.

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The collaboration will extend beyond financial support, offering advisory and structuring assistance, technical guidance, and sustainability and impact management support to ensure the success of projects. The partners will adhere to global best practice standards, including impact guidelines and safeguards.

ACP will play a crucial role by providing origination and technical support and catalytic early-stage financing in key countries across the region. IFC, the largest global development institution focused on the private sector in emerging markets, will contribute to pre-investment advisory services, co-development expertise, industry knowledge, and capital mobilisation capabilities.

MAS will leverage its networks within Singapore’s international financial centre, tapping into the country’s robust infrastructure and sustainable finance ecosystem, including the ongoing green and transition taxonomies. Additionally, Temasek will utilise its extensive network of portfolio companies and partners to identify and invest in opportunities, including a joint venture with HSBC and Pentagreen Capital.

The collaboration welcomes the participation of other stakeholders from the public and private sectors to create an enabling environment supporting the bankability of green and sustainable investments in the region.

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Commenting on the partnership, Mr Ahmed Saeed, CEO of Allied Climate Partners, highlighted the need for innovative financing mechanisms to accelerate collaboration among stakeholders. He said, “ That is why ACP seeks to leverage the catalytic power of philanthropic capital to help accelerate collaboration amongst aligned actors.” He expressed pride in collaborating with IFC, Temasek, and MAS to deliver solutions for the transition towards shared climate goals.

Acknowledging the scale of the challenge, Mr Ajay Banga, President of the World Bank Group, emphasised the importance of private sector involvement; he stated, “Nearly all estimates make clear adequate progress requires trillions annually; far more than what governments, philanthropy, and development banks can provide on their own. We need the resources and ingenuity of the private sector; we need all shoulders to the wheel. This partnership embodies that cooperation. With the help of knowledge and tools like blended finance to accelerate green infrastructure, we have the opportunity to deliver meaningful impact.”

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Mr Ravi Menon, Managing Director of MAS, highlighted the significance of public-private partnerships in mobilizing capital for Asia’s transition. He noted, “By using blended finance and targeted de-risking at the early stage of project preparation and construction, it will help to strengthen project bankability and crowd in private investment at scale.”

Temasek’s CEO, Mr Dilhan Pillay, stressed the role of blended finance in attracting commercial capital for green investments, stating,” The climate crisis cannot be tackled by any single entity. Blended finance is key to accelerating green investments in emerging markets and developing economies in Southeast Asia.”/TISG