Dubai, 3 December 2023—Allied Climate Partners (ACP), International Finance Corporation (IFC), the Monetary Authority of Singapore (MAS) and Temasek announced today the intent to establish a green investments partnership to address climate finance gaps and increase the bankability of green and sustainable projects in Asia, with an initial focus on Southeast Asia.
Developing Asia needs US$1.7 trillion annually in infrastructure investments till 2030 to maintain growth momentum while meeting its climate goals[1]. However, many green infrastructure projects are only marginally bankable, and unable to attract commercial financing on their own merits. These gaps are most acute in the project development and construction phases.
ACP, IFC, MAS and Temasek have signed a Memorandum of Understanding (MOU) to bridge gaps in the region's sustainable infrastructure financing needs through the deployment of blended finance, crowding in both concessional capital from the philanthropic and public sectors, as well as private capital towards such projects. The partnership aims to identify and develop a pipeline of investments in sectors including renewable energy and storage development, electric vehicle infrastructure, sustainable transport, water and waste management. The MOU was signed at the 28th Conference of the Parties (COP28) to the United Nations Framework Convention on Climate Change.
The parties are committed to delivering on environmental and social goals, which include meeting the region's carbon reduction targets, creating jobs, uplifting livelihoods, and building community resilience to mitigate the impact of climate change. Other critical components for bringing a project to bankability, including advisory and structuring support, technical assistance, and sustainability and impact management support, will also be provided as needed to help bring project to financial viability. The partnership will reference global best practice standards, including impact guidelines and safeguards.
ACP will provide origination and technical support, including through catalytic, early-stage financing in key countries across the region. IFC, the largest global development institution focused on the private sector in emerging markets and a member of the World Bank Group will support the initiative with pre-investment advisory and co-development expertise, industry knowledge, environmental and social best practices, transaction structuring expertise, cross-regional experience, and capital mobilization capabilities. MAS will convene its networks across Singapore's international financial center as well as Singapore's strong infrastructure and sustainable finance and professional services ecosystem, and build on ongoing industry work in green and transition taxonomies to support the partnership. Temasek will leverage its network of portfolio companies and partners across its ecosystem including Pentagreen Capital, a joint venture with HSBC, for origination and investment opportunities.
All parties will consider opportunities to provide appropriate financing that can in turn catalyze and crowd in other concessional and commercial capital providers. ACP, IFC, MAS and Temasek welcome the support of stakeholders across the public and private sectors to provide an enabling environment to support efforts to improve the bankability of green and sustainable investments in the region.
"Investors, developers, policymakers, business owners, and civil society leaders across emerging economies repeatedly emphasize the need for new and innovative financing mechanisms to support early-stage climate projects. Our singular goal is to grow that pipeline of projects. That is why ACP seeks to leverage the catalytic power of philanthropic capital to help accelerate collaboration amongst aligned actors. We're proud to be partnering with IFC, Temasek and MAS, to help deliver the needed solutions for this transition and meet our shared climate goals," said Ahmed Saeed, CEO, Allied Climate Partners.
"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," said Ajay Banga, President, World Bank Group.
"This green investments partnership exemplifies the kind of public-private partnership that is key to mobilising the capital necessary for Asia' transition. 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. This partnership will accelerate sustainable infrastructure development, giving communities in Asia access to cleaner energy, sanitation, and transport solutions," said Ravi Menon, Managing Director, MAS.
"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. Concessional capital providers play a crucial role here in unlocking the capital stack to attract commercial capital from investors like Temasek. We are glad to be working with ACP, IFC and MAS to enable the deployment of climate finance, and look forward to more collaborations across the public, private and developmental finance sector players to crowd in capital in innovative and complementary ways, so as to contribute towards a clean and inclusive transition for the region," said Dilhan Pillay, CEO of Temasek.
[1] ADB, Meeting Asia's Infrastructure Needs publication, February 2017
About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org
About ACP
Allied Climate Partners (ACP) is a philanthropic investment organization with a mission to accelerate the climate transition and improve livelihoods in emerging economies by increasing the flow of capital to bankable, climate-related projects and businesses. ACP selects regional investment managers in emerging economies and supports them with first-loss capital, expertise, and the mandate to address a critical financing gap at the early, risk-oriented stages of the development process for climate-related projects and asset-oriented businesses. Without this support, many projects and businesses struggle to attract the necessary capital to achieve their climate-related goals. By proving this model, ACP aims to induce commercially-oriented public and private sector investors to invest where they likely would not otherwise.
About MAS
MAS is the central bank of Singapore, with the mission to promote sustained non-inflationary economic growth, and a sound and progressive financial cener.The work on this green investments partnership is part of the Financing Asia's Transition Partnership ("FAST-P"), a Singapore blended finance initiative in collaboration with key public, private and philanthropic sector partners that aims to mobilize up to US$5 billion to de-risk and finance transition and marginally bankable green projects in Asia. FAST-P brings together stakeholders including multi-lateral development banks, sovereign partners, philanthropic organizations, and the financial sector to support Asia's decarbonization, narrow the financing gap through the mainstreaming of blended finance, and support economic growth and climate resilience in Asia.
About Temasek
Temasek is a global investment company with a net portfolio value of S$382 billion (US$287b, €264b, £232b, RMB1.98t) as at 31 March 2023. Its Purpose "So Every Generation Prospers" guides it to make a difference for today's and future generations. As an active investor, forward looking institution, and trusted steward, it is committed to deliver sustainable value over the long term. Temasek has overall corporate credit ratings of Aaa/AAA by rating agencies Moody's Investors Service and S&P Global Ratings respectively. Headquartered in Singapore, it has 13 offices in 9 countries around the world: Beijing, Hanoi, Mumbai, Shanghai, Shenzhen, and Singapore in Asia; and London, Brussels, Paris, New York, San Francisco, Washington DC, and Mexico City outside Asia.
