Australia approves $50m for clean energy transition in Southeast Asia

The Australian government has approved a $50m investment into the Green Investments partnership (GIP) under Singapore’s Financing Asia’s Transition Partnership (FAST-P) initiative. The Monetary Authority of Singapore (MAS) said that the investment will support clean energy transition and sustainable infrastructure development across Southeast Asia. FAST-P was launched by MAS at the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28) in 2023. Australia’s investment is administered by Export Finance Australia (EFA). It said that it will help facilitate investment opportunities in clean energy and sustainable infrastructure projects across Southeast Asia and create commercial opportunities for Australian exporters and financial institutions. This is the first investment under the Australian government’s A$2bn Southeast Asia Investment Financing Facility (SEAIFF) — a key recommendation of Invested: Australia’s Southeast Asia Economic Strategy to 2040. This highlights Australia’s commitment to practical action and reinforces its role as a committed and reliable partner for the region, said MAS. FAST-P is a blended finance initiative that brings together like-minded international public, private and philanthropic partners to support Asia’s decarbonisation and climate resilience. The Singapore government will pledge up to $500m as concessional capital to match, dollar-for-dollar, concessional capital from other partners, including other governments, multilateral development finance institutions and philanthropies. This combined pool of concessional capital will be used to crowd in commercial capital and other sources of finance to support Asia’s green energy transition. Australia will invest in the GIP under FAST-P. Australia’s investment, administered by EFA, will join the consortium of partners mentioned in the recent GIP announcement by Pentagreen Capital, the sustainable infrastructure debt financing company established by HSBC and Temasek, the Singapore Sovereign wealth fund. Pentagreen Capital will manage FAST-P’s GIP and deploy capital to projects in sectors including renewable energy and storage, electric vehicle infrastructure, sustainable transport, and water and waste management, as well as those from other green infrastructure sectors. John Hopkins, CEO and managing director, EFA said: “Our support for projects in Southeast Asia reflects Australia’s commitment to supporting the clean energy transition and infrastructure development in the region, as well as fostering economic partnerships that benefit both the region and Australia. Through initiatives like FAST-P, we are not just financing projects – we are building a foundation for long-term, mutually beneficial relationships in the region, including with the Singapore government. At Export Finance Australia, we see significant potential in Southeast Asia’s energy transition and connecting Australian investors and businesses with opportunities in the region.” Leong Sing Chiong, deputy managing director (markets and development), MAS said: “MAS welcomes Export Finance Australia as the latest partner to join our FAST-P initiative. This latest partnership is a testament to the strong alignment of interest among Singapore, Australia and other like-minded partners on the FAST-P platform to mobilise capital to support the region’s decarbonisation efforts.” Marat Zapparov, chief executive officer, Pentagreen Capital said: “Multilateral efforts can significantly accelerate climate infrastructure investment in Southeast Asia, as like-minded partners across public, private and philanthropic sectors come together to scale our commitment. We are delighted the Australian government is joining the Green Investments partnership to advance our shared objective of catalysing high-quality infrastructure development in our region. Pentagreen Capital is looking forward to drawing on the deep expertise in the infrastructure sector offered by Australia to unlock capital flows for the benefit of our clients, partners and neighbours in the region.”

Australia approves $50m for clean energy transition in Southeast Asia

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