Allied Climate Partners (ACP), the International Finance Corporation (IFC), the Monetary Authority of Singapore (MAS), and Temasek announced today their commitment to establish a groundbreaking green investments partnership.

This ambitious initiative, unveiled at the 28th Conference of the Parties (COP28) to the United Nations Framework Convention on Climate Change, aims to address the critical climate finance gaps in Asia, particularly Southeast Asia.

Faced with a daunting requirement of $1.7 trillion annually in infrastructure investments until 2030 to sustain growth and meet climate objectives, developing Asia confronts a significant hurdle: many green infrastructure projects remain marginally bankable, struggling to attract commercial financing.

To overcome this challenge, ACP, IFC, MAS, and Temasek have signed a Memorandum of Understanding (MOU) to bridge these financing gaps through blended finance. This strategy will combine concessional capital from philanthropic and public sectors with private capital, targeting projects in renewable energy, electric vehicle infrastructure, sustainable transport, and waste management.

The partnership is committed to environmental and social objectives, including carbon reduction targets, job creation, and building resilience against climate change. Additionally, it will provide comprehensive support to enhance project bankability, such as advisory and structuring support, technical assistance, and sustainability management.

Each partner brings unique strengths to this collaboration. ACP will offer origination and technical support, including catalytic, early-stage financing. IFC, a member of the World Bank Group, will contribute with its extensive experience in pre-investment advisory, environmental and social best practices, and capital mobilization.

MAS plans to leverage Singapore’s financial and professional services ecosystem, along with its work in green and transition taxonomies. Temasek will utilize its network, including Pentagreen Capital, a joint venture with HSBC, for investment opportunities.

The partnership underscores the need for innovative financing mechanisms to support early-stage climate projects. Ahmed Saeed, CEO of ACP, emphasizes leveraging philanthropic capital to foster collaboration and accelerate climate solutions.

Ajay Banga, President of the World Bank Group, highlights the necessity of private sector resources and ingenuity, with blended finance as a key tool to accelerate green infrastructure. Ravi Menon, Managing Director of MAS, points out the role of public-private partnerships in mobilizing capital for Asia’s transition to sustainable infrastructure. Dilhan Pillay, CEO of Temasek, stresses the importance of blended finance in attracting commercial capital for green investments in Southeast Asia.

This partnership represents a significant step towards mobilizing diverse capital sources and expertise to improve the bankability of green and sustainable investments in Asia, marking a pivotal moment in the region’s journey towards sustainable development.