Republic pledges up to $669m to support decarbonisation in Asia

With climate finance weighing heavily at the UN Climate Change Conference (COP29) in Azerbaijan, Singapore announced on Nov 12 that it will commit up to US$500 million (S$669 million) to a national initiative to channel financing to decarbonise Asia.

- Shabana Begum

The US$500 million from the Government 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.

The US$500 million will be a major component of the national blended finance initiative, which aims to raise up to US$5 billion to finance green projects in Asia or reduce their risk. The Financing Asia's Transition Partnership (Fast-P) was launched by the Monetary Authority of Singapore (MAS) in 2023 at COP28 in Dubai.

The update to Fast-P was announced by Minister for Sustainability and the Environment Grace Fu in a pre-recorded speech at the Singapore Pavilion at COP29. The summit is scheduled to run until Nov 22.

"This combined pool of concessional capital will be used to crowd in commercial capital and other sources of finance to accelerate capital flows to support Asia's green transition," said Ms Fu.