Latest news with #Fast-P
Straits Times
07-05-2025
- Business
- Straits Times
S'pore will soon start deploying funds for clean energy infrastructure in Asia: MAS
S'pore will soon start deploying funds for clean energy infrastructure in Asia: MAS SINGAPORE - The Republic will in the coming months be ready to deploy part of the US$500 million (S$646 million) it had set aside as initial funding for green projects in the region, with the set up of a new office to advance a scheme first announced in 2023. This update to Fast-P — or Financing Asia's Transition Partnership — was announced by Monetary Authority of Singapore (MAS) managing director Chia Der Jiun on May 7 at the Ecosperity Week sustainability conference. 'I am also glad to share that a Fast-P office, with a dedicated management team, will soon be set up to facilitate the deployment of up to US$500 million of concessional capital from the Singapore Government into Fast-P, alongside capital from other partners,' he said. The new office by the MAS will help to fund marginally bankable clean energy infrastructure in Asia, that can be deemed too risky or unprofitable for investors. The goal of Fast-P, an initiative launched by MAS in 2023, is to use an initial injection of funds by the Singapore Government to increase funding from other sources. The US$500 million will come in the form of concessional funding, such as grants and loans provided at more favourable terms and below market rates. This funding will match, dollar for dollar, concessional capital from other partners, including other governments, multilateral development banks and philanthropic institutions. The aim is to raise a total of US$5 billion with the help of other commercial and philanthropic partners. The funds will go to three pillars – accelerating the energy transition away from fossil fuels to clean energy, ramping up green investments, and decarbonising emissions-intensive sectors like cement and steel production. It is the second pillar on green investments that will be the first to receive some capital in the coming months from the initial US$500 million. Mr Chia did not specify the types of clean energy infrastructure projects that will receive the funding. But this pillar focuses on renewable energy plants and storage, electric vehicles, transport, and water and waste management projects, said a 2024 MAS media release. Mr Chia noted that Asia's demand for electricity is projected to rise at an annual rate of 4 per cent until 2035. The International Energy Agency expects renewable energy to supply more than half of Asia's increased electricity demand. 'Global corporate investment may also turn more cautious amid heightened trade and economic uncertainty,' he added, underscoring the need for financing methods like Fast-P. Mr Chia noted that the insurance industry plays a key role in finding solutions to reduce the risk of renewables and decarbonisation projects for commercial investors. At Ecosperity's Financing Asia's Transition Conference on May 7, Malaysia's Natural Resources and Environmental Sustainability Minister Nik Nazmi Nik Ahmad shared Mr Chia's views. 'While our ambitions are high, we need the financial infrastructure to match,' said Mr Nik Nazmi in a recorded speech. Mr Chia also outlined the other ways that Singapore's financial sector is pressing ahead with climate efforts, even as climate action elsewhere falters . For instance, steps have been taken to shore up banks' resilience to climate and nature risks, such as damage to assets and infrastructure from extreme weather, and disruptions to supply chains. Revenue may come under threat, or companies may have to incur additional costs from new regulations or increased consumer scrutiny. As such, financial institutions here have integrated such risks into their internal credit risk models, asset valuation and due diligence processes, Mr Chia said. 'Doing so will enable them to better anticipate and manage financial loss, minimise stranded assets, and uncover new financing and investment opportunities,' he added. Other than factoring in climate risks in financial assessments, financial institutions here are also increasingly aware of the impacts of nature loss on operations. The Singapore Sustainable Finance Association had highlighted in a report that the degradation of nature represents a risk to companies' activities and to financial portfolios. Nature gets stressed from economic activities that cause pollution and deplete natural resources. The association's white paper listed practical steps for financial institutions to incorporate nature into their business activity. The paper – titled Financing our Natural Capital – highlighted that plans to reverse negative impacts and restore nature can unlock US$4.3 trillion and 232 million jobs in Asia. 'Ultimately, financial institutions can respond on two fronts: by managing exposure to growing climate and nature-related risks, and by innovating to finance and de-risk adaptation, resilience, and nature-positive solutions,' said Mr Chia. And in a further boost to climate finance, a global accelerator that aims to bridge the investment and capacity gap in developing countries was launched at Ecosperity on May 7. Spearheaded by the Global Capacity Building Coalition – a grouping of climate finance organisations – the initiative is open to applicants who can showcase their efforts to develop climate finance to ramp up efforts in the energy transition. The coalition said in a statement that to increase climate finance to sustainable development in emerging economies, it is important to first strengthen the capacity of local financial institutions. This is something that the accelerator hopes to do, by highlighting and supporting capacity building initiatives. Recipients will, among other things, be provided with access to and advice from experts and marketing and communication support. Join ST's WhatsApp Channel and get the latest news and must-reads.
Straits Times
05-05-2025
- Business
- Straits Times
Asia remains underfunded in climate finance but philanthropic funding can help plug gaps: Ravi Menon
Singapore's ambassador for climate action Ravi Menon speaking at the Philanthropy Asia Summit on May 5. ST PHOTO: CHONG JUN LIANG Asia remains underfunded in climate finance but philanthropic funding can help plug gaps: Ravi Menon SINGAPORE - Asia is where the climate change fight will be won or lost, yet the region remains severely underfunded in terms of cutting emissions and building resilience, said Singapore's ambassador for climate action Ravi Menon on May 5. Speaking at the Philanthropy Asia Summit convened by Temasek Trust's Philanthropy Asia Alliance , Mr Menon said philanthropic funding can help to plug these gaps. Asia accounts for half of the global emissions, he said, adding that some 90 per cent of the world's future growth in energy demand will come from Asia. Yet, globally, less than two per cent of philanthropic giving goes towards preventing climate change. Of this, only 12 per cent goes to Asia, he said. 'Without decarbonising Asia, the world will not reach net zero,' he added. 'This is a time for philanthropy to play a larger role in driving climate action in Asia. Public funding is willing but insufficient while private funding is ample but unwilling to commit due to high risks, said the former chief of Singapore's central bank. Philanthropic funding can help to de-risk projects so private sector capital can be crowded in, he added. Mr Menon noted that decarbonisation projects are often capital-intensive and require large investments. Philanthropic capital is considered 'catalytic' as it is willing to accept lower returns, even losses, and can thus help to reduce risk borne by commercial entities. For philanthropies, tapping funding instruments such as blended finance schemes can also maximise the impact of their contributions, compared with giving grants, Mr Menon added. Blended finance refers to using public and philanthropic funding support to make it easier for private funding to come on board. An example of blended finance initiative is the Financing Asia's Transition Partnership (Fast-P) launched by Singapore in 2023 to raise up to US$5 billion (S$6.45 billion) to address the financing gap in green projects in Asia. This could include the early phase-out of coal power plants and the upgrading of electricity grid infrastructure. Fast-P involves the Monetary Authority of Singapore, multilateral development banks and philanthropic organisations, among others. With many parts of South-east Asia lacking sufficient climate data - which hinders efforts to cut emissions or prepare for climate impacts - philanthropies can also fund data collection, enhance access and build local capacity in data analysis, said Mr Menon. And given that the transition to a lower-carbon economy will disrupt communities and livelihoods, philanthropies can also help communities by reskilling workers and empowering communities. 'Amid the growing risks to lives and livelihoods from the climate crisis, we need philanthropy to help communities adapt and thrive,' he added. Decarbonisation activities entails changes in long-standing economic activities, and could involve changing agricultural practices or phasing out fossil fuels in power generation. In a separate dialogue at the event with Gates Foundation chairman Bill Gates, President Tharman Shanmugaratnam said philanthropy can also help boost innovation. For example, it can help to revolutionise food systems. Mr Shanmugaratnam said food demand will continue to go up. But supply would be constrained given agriculture's impacts on climate change. 'We have reached the limits of our produced food… both by ordinary, small farmers as well as industrial agriculture. We reached the limits because it is too large a source of greenhouse gas emissions. We can't keep encroaching into natural forests and other natural ecosystems,' he said. Gates Foundation chairman Bill Gates (left) and President Tharman Shanmugaratnam participating in a dialogue at the Philanthropy Asia Summit on May 5. ST PHOTO: CHONG JUN LIANG One example he noted is an initiative by Temasek Life Sciences Laboratory to reduce methane emissions, conserve water and increase yields in rice production, so that this staple can be grown more sustainably. Methane is a powerful greenhouse gas with greater warming potential than carbon dioxide. The role of philanthropies in helping to narrow the funding gap for many pressing issues – such as climate change and public health – is gaining traction amid growing recognition that governmental funding alone will not be able to address these issues. During the dialogue, Mr Gates said his Foundation is setting up an office in Singapore, to access the science and research being done here, and to partner with the philanthropic community. 'Both (Gates Foundation and Breakthrough Energy) are very excited about what's going on in Singapore,' he said. Breakthrough Energy is an umbrella group for energy and environmental efforts founded by Mr Gates. It aims to accelerate innovation in sustainable energy and in other technologies to reduce greenhouse gas emissions. The Economic Development Board said in a separate statement that the establishment of a Singapore presence reflects the Gates Foundation's broader commitment to working alongside countries and partners to help more people live healthy and productive lives, and to accelerate progress toward achieving the Sustainable Development Goals. Join ST's WhatsApp Channel and get the latest news and must-reads.
