At the 28th Conference of the Parties (COP28) to the United Nations Framework Convention on Climate Change, the Asian Development Bank (ADB), in collaboration with the Global Energy Alliance for People and Planet (GEAPP) and the Monetary Authority of Singapore (MAS), unveiled plans to establish a blended finance partnership aimed at accelerating energy transition initiatives across Asia.
Asia’s escalating energy demand, spurred by economic growth, demographic shifts, and urbanization, primarily relies on fossil fuels, constituting 85 percent of the region’s energy consumption. To meet development objectives while curbing emissions, a concerted effort to accelerate innovative financing solutions for the energy transition is imperative.
The tripartite Memorandum of Understanding (MoU) inked among ADB, GEAPP, and MAS marks a pivotal step towards mobilizing concessional capital from philanthropic and public sectors. This collaboration aims to de-risk projects and attract global private capital, specifically targeting energy transition projects in Asia. These projects encompass the premature phaseout of coal assets in favor of renewable energy sources and decarbonization initiatives in challenging-to-transition sectors.
The partnership’s strategic objectives include the cultivation of a robust pipeline of opportunities and the deployment of innovative and scalable financing structures to drive decarbonization efforts across Asia. Additionally, the alliance intends to explore the utilization of high-integrity transition carbon credits, enhancing the viability of replacing coal assets with renewable energy sources. Transactions will adhere to global best practices, referencing standards such as the Glasgow Financial Alliance for Net Zero (GFANZ) APAC guidelines, Singapore-Asia Taxonomy, and ASEAN taxonomy.
With an ambitious target of raising up to US$2 billion in concessional and commercial capital, the collaboration will leverage ADB’s extensive regional network for origination, transactions, and technical support. ADB’s broader Energy Transition Mechanism (ETM) initiative, supported by various governments and ETM Partnership Trust Fund contributions, will bolster this effort.
President Masatsugu Asakawa of ADB emphasized the urgency to combat climate change, hailing the partnership with MAS and GEAPP as a critical alliance in the regional fight against climate change.
Kitty Bu, GEAPP Asia VP, highlighted the alliance’s commitment to channeling funds towards nascent clean energy projects, ensuring the flow of capital to drive the energy transition forward.
Ravi Menon, Managing Director of MAS, underscored the significance of blended finance and carbon credits in fostering an equitable energy transition in Asia, inviting global stakeholders to join in this public-private partnership to bolster clean energy access and sustainability.