DUBAI, UNITED ARAB EMIRATES (5 December 2023) — The Asian Development Bank (ADB), Global Energy Alliance for People and Planet (GEAPP), and the Monetary Authority of Singapore (MAS) today announced their intent to set up a blended finance partnership to expedite the energy transition at scale in Asia.
Economic growth, demographic expansion, and increased urbanization have increased the demand for energy in Asia. 85% of Asia’s energy consumption is from fossil fuels. To reduce emissions while achieving its development goals, Asia needs to expedite and scale up innovative financing solutions for its energy transition.
ADB, GEAPP, and MAS have signed a memorandum of understanding (MOU) to set up an energy transition acceleration finance partnership to activate concessional capital from the philanthropic and public sectors, de-risk projects, and crowd-in private capital from around the globe to finance energy transition projects in Asia. Such projects include the early phaseout of coal assets to be replaced with renewable energy, and decarbonization projects in hard-to-abate sectors. The MOU was signed at COP28.
Through the collaboration, the partners will progress a pipeline of opportunities, and deploy innovative and scalable financing structures to drive decarbonization in Asia. The partnership will also examine using high-integrity transition carbon credits to better the commercial viability and sustainability of retiring and replacing coal assets with renewable energy, and streamline the mainstreaming of such transactions. The transactions will reference global best practice standards, including the Glasgow Financial Alliance for Net Zero (GFANZ) APAC guidelines, Singapore–Asia Taxonomy, and ASEAN taxonomy.
The partnership aims to raise up to $2 billion in concessional and commercial capital from other appreciate-minded partners. ADB will supply origination, transaction and technical uphold through its presence and network in countries across the region. The partnership will benefit from ADB’s broader Energy Transition Mechanism (ETM) initiative including policy uphold for a just energy transition, contributions from the governments of Japan, Germany, and other countries under the ETM Partnership Trust Fund, and a pipeline of investable projects. GEAPP will contribute philanthropic capital, its go through in the energy transition, and a coalition of committed partners. MAS will activate key stakeholders in Singapore’s financing ecosystem, including infrastructure finance platforms such as Clifford Capital. MAS will also enable policy uphold for the collaboration, including through its transition planning guidance to financial institutions, transition focused taxonomy, and work in developing high-integrity transition carbon credits via the Transition Credits Coalition (TRACTION). All three partners intend to activate and contribute catalytic capital to crowd in other concessional and commercial capital providers and appreciate-minded partners.
“Time is running out to make a meaningful impact on climate change, and it is clear that not enough is being done to curtail the most polluting sources of greenhouse gas emissions,” said ADB President Masatsugu Asakawa. “This financing partnership with MAS and GEAPP—two leading, appreciate-minded partners—is a significant step towards attracting the requisite capital to phase out coal assets more quickly and replacing these with cleaner energy. This partnership forms a critical alliance in our region’s battle against climate change.”
“GEAPP, as a robust alliance with access to catalytic capital, is in a unique risk-tolerant position to enable allocation of funds and resources towards climate solutions.” said GEAPP Asia Vice-President Kitty Bu. “By bringing in diverse partners, GEAPP aims to create avenues to streamline capital flow using blended finance. This bridges the gap for early-stage projects that have long-term potential but may not attract investment at the nascent stages. We are confident that the energy transition acceleration finance partnership with ADB and MAS will be pivotal in mobilizing necessary capital to create new markets and reinforce the existing clean energy ecosystem.”
“Blended finance and carbon credits are key success factors for an effective and just energy transition in Asia,” said MAS Managing Director Ravi Menon. “MAS is pleased that this energy transition acceleration finance partnership with ADB and GEAPP has both of these key components. We inspire global philanthropies, development finance institutions, long-term investors, banks and other financiers to combine us in this public–private partnership to extend Asia’s access to clean energy, reduce greenhouse emissions and contribute to a more sustainable planet.”
About ADB
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.
The partnership announced today is part of ADB’s ETM program to deliver on the objective of scaling energy transition, both the early retirement of coal-fired power plants and the acceleration of replacement clean energy, through a replicable market-based model. This partnership will bring together concessional capital from donor partners, such as the governments of Japan, Germany, and other countries, and leverage on private sector capital to bring a just energy transition as a key weapon in the fight against climate change.
About GEAPP
The GEAPP is an alliance of philanthropy, governments, technology, policy, and financing partners. Our common mission is to enable emerging and developed economies to shift to a clean energy, pro-growth model that accelerates universal energy access and inclusive economic growth while supporting the global community to face critical climate goals during the next decade. As an Alliance, we aim to reduce 4 gigatons of future carbon emissions, extend clean energy access to one billion people, and enable 150 million new jobs. With philanthropic partners the IKEA Foundation, The Rockefeller Foundation and Bezos Earth Fund, GEAPP works to build the enabling environment, capacity, and market conditions for private sector solutions, catalyze new business models through innovation and entrepreneurship, and deploy high-risk capital to inspire private sector solutions and assist just transition solutions.
For more information, please visit www.energyalliance.org and follow us on Twitter at @EnergyAlliance.
About Monetary Authority of Singapore
MAS is the central bank of Singapore, with the mission to advocate sustained non-inflationary economic growth, and a sound and progressive financial centre.
The work on this energy transition acceleration finance 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 activate up to $5 billion to de-risk and finance transition and marginally bankable green projects in Asia. FAST-P brings together stakeholders including multilateral development banks, sovereign partners, philanthropic organizations and the financial sector to uphold Asia’s decarbonization, narrow the financing gap through the mainstreaming of blended finance, and uphold economic growth and climate resilience in Asia.
