The US$500 million from Singapore 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. Funding from these bodies can help to soften investors’ risks in financing green projects, which can often be deemed too risky or unprofitable.
Speaking at the pavilion on Nov 12, Singapore’s Ambassador for Climate Action, Mr Ravi Menon, said Asia faces significant challenges in attracting private capital for decarbonisation. Projects that can be financed under Fast-P include the early phase-out of coal power plants, the upgrading of electricity grid infrastructure and industrial decarbonisation efforts that are only marginally bankable.Under this New Collective Quantified Goal on Climate Finance, developed countries are required to contribute financial resources to developing countries to help them meet their climate targets and adapt to climate change impacts.
Fast-P’s initial partners include the Asian Development Bank, Global Energy Alliance for People and Planet, and Singapore’s Temasek. Now, the initiative has expanded its network of partners to prepare for capital raising and deployment in 2025, said MAS.Multi-nation teamwork key to reducing environmental conflicts: Vivian and Green Group ministers
The second Green Investments partnership will focus on renewable energy plants and storage, electric vehicles, transport, and water and waste management projects. These are projects that are not readily supported by commercial lenders due to low investor familiarity, for instance, said Mr Menon.The third pillar, the Industrial Transformation programme, will focus on hard-to-abate sectors like cement and steel, and decarbonisation technology like carbon removal.