THE Singapore government will commit $500 million in concessional capital to support a blended finance initiative launched by its central bank last year, Minister for Sustainability and Environment Grace Fu has said , Tuesday November 12.

The government will match dollar for dollar – up to $500 million – of concessional capital raised by other partners involved in the blended finance initiative, known as Financing Asia’s Transition Partnership (Fast-P). Blended finance programs involve a combination of grants, concessional loans and commercial capital designed to reduce the cost of capital.

“This combined pool of concessional capital will be used to attract commercial capital and other sources of financing to accelerate capital flows to support Asia’s green transition,” said Fu, who spoke virtually at of the launch of the Singapore pavilion at the annual COP29 climate conference. summit.

The Fast-P initiative – which was first launched at COP28 last year in Dubai, United Arab Emirates – aims to mobilize up to US$5 billion to reduce risks and finance projects energy transition and unbankable greens in Asia by bringing together the international public. , private and philanthropic partners. The Singapore government then announced that it would provide concessional capital to support the partnership, although the amount was not yet known.

MAS also announced the launch of an Infrastructure Debt Program for Industrial Transformation – the third fund of the Fast-P initiative.

The first is a green investment partnership with MAS, state investor Temasek, Allied Climate Partners and the World Bank’s International Finance Corporation, while the second involved a partnership with the Asian Development Bank and the Global Energy Alliance for People and Planet (GEAPP). ) to finance the energy transition in Asia.

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In addition to these partners being the first to join, MAS also said that the network has expanded since then, to prepare for capital raising and deployment in 2025.

Other investors who have started discussions for a possible collaboration with Fast-P are AIA Group, British International Investment, HSBC, Mitsubishi UFJ Financial Group (MUFG), Nippon Export and Investment Insurance (NEXI), as well as the Commission European Union and development banks. from Germany and the Netherlands.

MAS also said in its Tuesday statement that it has already engaged asset managers to implement these three programs under Fast-P.

Debt financing platform Pentagreen Capital will manage investments under the Green Investment Partnership. Temasek and HSBC, as founding shareholders of Pentagreen, will commit capital to support this fund.

The European Commission and the development banks of Germany and the Netherlands are in discussions to join the green investment partnership. This fund will focus on managing and deploying capital in low-bankable green and sustainable infrastructure in Asia, such as renewable energy and storage, electric vehicles, transportation, as well as water management sectors and waste.

MAS is in discussions with debt financing solutions provider Clifford Capital to manage the second fund focused on energy transition projects, which include early retirement of coal assets, renewable energy and grid modernization and development .

MAS noted that the governments of Germany, Japan and New Zealand welcomed Fast-P’s progress, including the creation of this partnership, at the COP29 conference taking place in Baku, Azerbaijan.

As for the recently launched third fund on industrial transformation, MAS said AIA, BlackRock, IFC, MUFG and NEXI have signed an agreement indicating their intention to collaborate.

This third partnership will explore opportunities to provide debt financing to private sector borrowers seeking to decarbonize their businesses, including projects in hard-to-abate sectors, technology solutions for low-carbon transformation, and industrial opportunities. The MAS said it was encouraged by the strong support from multilateral development banks, sovereign and development financial institutions, as well as philanthropic organizations, which agreed to partner with the central bank under the FAST initiative -P.

“MAS is pleased to collaborate with like-minded international partners to forge a collective public-private partnership that seeks to mobilize capital for Asia’s transition,” the statement read.