SINGAPORE Trends and Developments Contributed by: Susan Wong, Christy Lim, Bernadette Tan and Clarence Kang, WongPartnership LLP
Public and private capital potentially co-funding sustainable development While several notable projects for sustainable and green infrastructure have been implemented, a sig- nificant portion of sustainable infrastructure projects in Southeast Asia are still perceived as “unbankable” and generally less attractive to commercial inves- tors. Blended finance could present a solution to this issue by combining public and private capital to fund sustainable development initiatives, thereby reducing risks and improving returns for private inves- tors. Recent developments also suggest a potential rise in blended finance activity in the near future. In August 2024, a memorandum of understanding was signed among Keppel, the Asian Development Bank, and Enterprise Singapore to explore USD800 million (SGD1.05 billion) worth of energy transition and envi- ronmental sustainability projects in the Asia-Pacific. In November 2024, BlackRock, the MAS, Interna- tional Finance Corporation, Mitsubishi UFJ Financial Group, Nippon Export and Investment Insurance and AIA Group signed a Statement of Intention to collabo- rate on a blended finance initiative, with the aim of unlocking investment opportunities in decarbonisation projects across Southeast Asia. Fast-P Singapore has been committed to facilitating Asia’s transition to a low-carbon economy. In 2024, green, social, sustainable and sustainability-linked loans originating from Singapore reached a new high at over SGD48 billion. MAS’s Financing Asia’s Transition Partnership (“FAST-P”) is a prominent initiative that demonstrates this commitment. Fast-P is a blended- finance initiative where the Singapore Government’s funding will match, dollar for dollar, concessional capital from other governments, development banks and philanthropic institutions, mobilising up to USD5 billion to fund marginally bankable green and sustain- able infrastructure in Asia. Notably, in May 2025, the MAS announced the set-up of a new Fast-P office to facilitate the deployment of up to USD500 million of concessional capital, which will come in the form of grants and loans provided at favourable terms and below market rates.
In 2024, Temasek Trust launched Co-Axis, a digi- tal catalytic capital marketplace, aiming to connect funders to startups, social enterprises, non-profits, and impact projects, and provide funding through financial instruments such as donations, recover- able grants, and embedded instruments. This ini- tiative is expected to spur growth in impact financ- ing. For example, through a partnership with digital wealth platform Arta Finance, USD30 million has been secured for funding projects that align with the United Nations’ Sustainable Development Goals over a two- year period. Furthermore, the Singapore Centre for Social Enterprise (raISE) committed SGD2.2 million to support social enterprises in Singapore. This was through its raiSE Impact Finance (RIF+) programme, which provided financing to social enterprises primar- ily through convertible loans. In the past year, Singapore-based banks and private equity firms have also played a role in driving inter- national impact financing transactions. For exam- ple, DBS Bank had in August 2024 issued a SGD92 million green loan facility to Chinese MNC, Envision Energy, to develop a 100-megawatt wind turbine farm in Henan, China and in November 2024, Temasek Trust-linked ABC Impact had invested USD50 million in Japan-based Tekoma Energy, with a focus on plans to develop and operate projects for clean and reliable energy. Rising energy needs In Southeast Asia, increasing energy demands and urgent sustainability goals have created a significant decarbonisation financing gap in the region, high- lighting an immediate need for transition finance. It is estimated that USD3 trillion per year by 2030 will be required to support the global transition to a net-zero economy by 2050, with more than half of this amount needed in the Asia Pacific. In this regard, Singapore has reaffirmed its commitment to transition financ- ing through international cooperation, including the July 2025 partnership with the UK to promote sus- tainable infrastructure in Southeast Asia and strength- ened collaboration with China’s central bank via the Singapore-China Green Finance Taskforce to advance green and transition finance initiatives, efforts which may lead to increased cross-border transactions in the ESG space.
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