Singapore climate initiative secures S$1 billion to finance green projects in Asia

 Investments in unbankable Asian green projects are set to increase as Singapore’s climate finance initiative secured another round of funding, growing its coffers to US$800 million (S$1.02 billion).

The green investments pillar of the three-year-old initiative – called Financing Asia’s Transition Partnership (FAST-P) – secured its second close after achieving US$510 million in late 2025.

This funding milestone was announced by Mr Chee Hong Tat, National Development Minister and deputy chairman of the Monetary Authority of Singapore (MAS), on 20 May at the Financing Asia’s Transition Conference.

The conference is part of Ecosperity – Temasek’s flagship sustainability summit – held at the Marina Bay Sands Expo and Convention Centre.

The US$800 million will fund a range of solar energy and battery storage projects, electric vehicles, green buildings, and water and waste management projects in Southeast Asia and other parts of Asia.

These also include a bio-energy project in several Southeast Asian countries that will use agricultural waste and feedstock instead of planet-warming fossil fuels to produce cleaner electricity.
 

About a quarter of the initial US$510 million has been committed to four sustainable infrastructure investments across Southeast Asia.

Two of the investments are to accelerate the roll-out of solar and battery storage projects in the Philippines and across Southeast Asia, respectively, Mr Ravi Menon, Singapore’s Ambassador for Climate Action and chair of FAST-P’s International Advisory Board, said at an Ecosperity side event on 20 May.
 

The third investment will scale up distributed bioenergy projects across Southeast Asia and India.

Mr Menon pointed out that bioenergy projects are often under-financed because of feedstock risks, smaller project sizes, and operational complexity.

The fourth investment is a loan to support the construction of small power plants in Indonesia using mini-hydro technology.

“Local banks were reluctant to take construction risk, and the portfolio was too nascent for international banks. (Green investment) funding made it possible,” said Mr Menon.

He added that higher fossil fuel subsidies in parts of Asia, coupled with limited fiscal buffers and high public debt, have also squeezed the government budgets needed to fund grid investment and green infrastructure financing.

The MAS-backed FAST-P initiative was formed in 2023 to channel financing in innovative ways towards green projects that tend to be less bankable and are not readily supported by the private sector.

The initiative aims to bring together public, private, and philanthropic capital to help finance Asia’s decarbonisation efforts, with a target of eventually raising up to US$5 billion.

In 2024, the Singapore Government pledged up to US$500 million to FAST-P in the form of concessional funding, such as grants and loans provided on more favourable terms and at below-market rates.

This innovative financing approach is called blended finance, which typically starts with capital from public or philanthropic sources as a catalyst. This will then spur the private sector – which holds most of the world’s wealth but is risk-averse – to invest in sustainable projects.

Mr Menon outlined how the US$800 million was raised for green investments.

The Singapore Government’s contribution of US$80 million was matched by other foreign government-linked finance institutions, such as British International Investment and Export Finance Australia, as well as philanthropies like Allied Climate Partners.

This base of US$160 million then attracted US$640 million from commercial players, such as Cathay United Bank, DBS Bank, and HSBC, he said.

In addition to the green investments pillar, FAST-P comprises two other pillars.

The second pillar focuses on energy transition, which will help countries phase out coal plants and replace them with renewables, battery storage, and upgraded grid infrastructure.

Acknowledging that phasing out young coal plants in the region will be tough, Mr Menon said FAST-P’s financing will have to be paired with carbon credit proceeds and enabling policies at the national level.
 

The third pillar seeks to help emissions-intensive sectors, such as cement and steel production, and aviation, decarbonise while supporting emerging technologies like carbon capture and hydrogen fuel.

In this regard, Mr Chee said these two pillars are progressing towards their first closes later in 2026.

He added: “Each new partner and every dollar committed sends a powerful signal that the world’s leading institutions are staying the course on climate action, and this is an important reassurance during this period of greater global uncertainty.

“Each commitment brings us closer to the scale of financing needed to support Asia’s energy transition.”

Mr Menon noted that FAST-P is a pilot initiative and needs to scale up with several more such financing solutions to make a mark in decarbonising Asia.
 

Source: The Straits Times © SPH Media Limited. Permission required for reproduction.