Pentagreen Capital, the sustainable infrastructure debt financing company established by HSBC and Temasek, has announced that it will manage the Financing Asia’s Transition Partnership’s (Fast-P) Green Investments partnership.
The Green Investments partnership is seeking to deploy US$1 billion ($1.34 billion) for Asia’s sustainable infrastructure, says Pentagreen Capital in a Nov 12 announcement.
The Green Investment partnership is one of three blended finance programmes under Fast-P, launched by the Monetary Authority of Singapore (MAS) last year to address climate finance gaps in developing Asia.
Developing Asia needs US$1.7 trillion annually in infrastructure investments until 2030 to maintain its growth momentum while responding to climate change, says Pentagreen Capital.
The Green Investment partnership seeks to bridge gaps in Southeast Asia’s sustainable infrastructure financing needs by deploying blended finance, crowding in commercial and catalytic capital from public, private and philanthropic partners.
The partnership will deploy capital to projects in sectors including renewable energy and storage, electric vehicle infrastructure, sustainable transport, and water and waste management, alongside other green infrastructure sectors.
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Capital deployment is expected to begin in 2025.
The European Commission, Dutch Entrepreneurial Development Bank (FMO), German Development Finance Institution (DEG) and HSBC are among new partners that are considering joining the Green Investment partnership.
MAS, Temasek, Allied Climate Partners (ACP) and International Finance Corporation (IFC) had announced their intent to collaborate at COP28. According to Pentagreen Capital, IFC is “considering opportunities” in providing the appropriate financing that can in turn crowd in other capital providers.
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According to Pentagreen Capital, the Singapore government will contribute concessional capital to the Green Investments partnership to match contributions from the other potential catalytic capital providers, such as ACP.
The Singapore government has committed up to US$500 million in concessional funding to support Fast-P, announced Minister for Sustainability and the Environment Grace Fu at COP29 in Azerbaijan. Singapore will match, dollar-for-dollar, concessional capital from other partners, including other governments, multilateral development finance institutions and philanthropies, says Fu.
Connie Chan, head of financial services at Temasek, recognises the challenges that green infrastructure projects in the region face, noting that through programmes such as the Green Investment partnership, Temasek aims to “crowd more like-minded partners” with appropriate forms of capital to bridge the risk-reward disconnect.
“Ultimately, we aim to contribute to change at the systems level, and unlock the necessary financial flows to accelerate the transition in Asia,” Chan adds.
