Global Financial Leaders Sign $5 Billion Blended Finance Debt Initiative to Drive Decarbonisation in Southeast Asia

IFC’s Regional Vice President for Asia Pacific, Riccardo Puliti, underlined the pressing need for sustainable financing in Southeast Asia, which is facing the compounded risks of climate change.

At COP29, financial giants BlackRock, Monetary Authority of Singapore (MAS), International Finance Corporation (IFC), Mitsubishi UFJ Financial Group (MUFG), Nippon Export and Investment Insurance (NEXI), and AIA signed a Statement of Intent (SOI) to explore a large-scale, blended finance debt initiative targeting the decarbonisation of Southeast Asia. This strategic partnership aligns with the MAS-led Financing Asia’s Transition Partnership (FAST-P), a pioneering program introduced by Singapore at COP28, aiming to mobilize $5 billion in financing for sustainable industrial transformation across Asia.

Addressing a Decarbonisation Gap in Southeast Asia

Southeast Asia faces an urgent financing gap in sustainable energy, with projected clean energy investments needing to soar from $30 billion in 2022 to nearly $240 billion annually by the early 2030s, as per the International Energy Agency and IFC. FAST-P’s Industrial Transformation infrastructure debt program is designed to bridge this gap, offering capital for private sector-led projects in high-emission sectors, low-carbon technology solutions, and industrial transformation. The program’s objective is to leverage both concessional and commercial capital, making it easier for private investors to support sustainable initiatives.

Strategic Contributions and Insights from Global Leaders

BlackRock, which oversees $170 billion in infrastructure assets, will contribute its expertise in blended finance and sustainable infrastructure investments to help emerging markets in Southeast Asia overcome financing barriers to decarbonisation. Mark Wiedman, Head of Global Client Business at BlackRock, noted that the initiative not only benefits clients but also addresses critical sustainability goals in the communities they invest in.

Leong Sing Chiong, Deputy Managing Director of MAS, emphasized that Southeast Asia’s transition to net zero requires a phased approach to decarbonising energy-intensive sectors, necessitating financial support for businesses adopting cleaner practices. He praised the coalition's collaboration as an important milestone in accelerating Asia’s sustainable economic transition.

IFC’s Regional Vice President for Asia Pacific, Riccardo Puliti, underlined the pressing need for sustainable financing in Southeast Asia, which is facing the compounded risks of climate change. The initiative will enable investors to fund essential projects for advancing low-carbon and resilient economic growth, especially in vulnerable and developing regions.

MUFG’s Chief Executive, Fumitaka Nakahama, expressed enthusiasm about contributing to FAST-P as a significant platform for promoting energy transition within Asia. Likewise, Dr. Mark Konyn, Group Chief Investment Officer at AIA, highlighted AIA’s commitment to decarbonisation, pointing to their Science Based Targets initiative (SBTi)-validated emissions reduction goals. The partnership, Konyn added, reflects AIA’s dedication to fostering transition opportunities in alignment with SBTi targets.

Looking Ahead: Mobilizing Blended Finance for Sustainable Growth

The consortium’s focus will include enhancing access to funding for businesses in hard-to-abate sectors, promoting the deployment of low-carbon technology, and supporting regional industrial projects that align with both environmental and economic goals. By catalyzing additional investments, the FAST-P Industrial Transformation program aims to create new opportunities for sustainable development in Asia, enabling countries and corporations alike to achieve ambitious decarbonisation targets while driving economic resilience. This commitment represents a landmark step towards a sustainable future for Southeast Asia.