Singapore’s climate tech startups ride government’s green energy ambitions

When Conor Madigan was debating where to establish his startup that converts waste carbon feedstocks into sustainable aviation and marine fuels, he had a meeting that focused his thinking.

It was with Phil Inagaki of Xora Innovation, an early-stage venture capital company based in Singapore backed by Temasek, the city-state’s sovereign wealth fund. The prospect of working with an investor willing to take a patient, long-term view made the Southeast Asian nation more attractive to Madigan.

“I certainly could have focused on just the Silicon Valley investor network,” he told Nikkei Asia. “But I was persuaded, and I decided, yes, let’s do this together,” he said, adding that the city-state’s concentration of talent and support for pilot projects were also key factors. “It has become a great place to develop and demonstrate innovative new tech.”

Aether Fuels secured seed funding from Xora Innovation and raised $34 million from a syndicate of global investors in a series A financing round in 2024. Then, in December 2025, the company raised an additional $15 million for its first commercial-scale sustainable aviation fuel (SAF) plant. Construction is expected to begin this year and commercial operations are targeted for 2028.

Its development is just one example of how Singapore is attracting climate-related startups as it pursues its ambition to become a leading green economy.

The government has set a target of requiring a 1% SAF blend for flights departing from Singapore’s airports from 2027, with the goal of increasing the proportion to between 3% and 5% by 2030. Other goals include installing at least 2 gigawatts of solar power by 2030, enough to supply electricity to about 350,000 households each year, and to roll out 60,000 electric vehicle charging points nationwide by the end of the decade to support the shift to cleaner transportation.

The nation has attracted $1.3 billion in climate tech funding since 2020, accounting for about 80% of the total raised in Southeast Asia, according to Tracxn, a Bengaluru-based market intelligence provider. Indonesia ranked second with $166 million, followed by Vietnam with $54 million.

Neha Singh, Tracxn’s chair and managing director, said climate tech funding in Southeast Asia has stabilized at between $200 million and $250 million annually after peaking at more than $400 million in 2022. The decline mirrors a broader global trend in climate tech investment.

The prolonged slowdown in Southeast Asian startup investment, driven largely by higher interest rates, is showing signs of easing. According to research by DealStreet Asia and Kickstart Ventures, venture-backed companies raised $7.25 billion in equity funding in the first half of the year, the highest total since 2022. While this was skewed by one large capital raise -- $4.5 billion by DayOne Data Centers -- the total without this deal was still 40% higher than the same period of 2025.

Singh said government initiatives continue to underpin investor interest in climate tech.

“Obviously, it is going to be supported by demand,” she said, adding that energy security concerns arising from the Iran-U.S. conflict, combined with the falling cost of alternative technologies, are also stimulating regional climate tech investment.

The five most-funded climate tech subsectors in the region are energy efficiency, air pollution management, solid waste management, smart grids and renewable energy, according to Tracxn.

Among the government agencies and state-linked institutions pushing climate tech investment is GIC, the state’s other major sovereign wealth fund. Like Temasek, it views climate, energy and related infrastructure as attractive long-term investment opportunities.

Bryan Yeo, GIC’s chief investment officer, told Nikkei Asia that the fund plans to continue increasing its venture capital investments, particularly in climate, energy and infrastructure. GIC has technology investment teams based in San Francisco and across Asia that seek opportunities in emerging growth companies.

“Many countries today are looking to either upgrade existing infrastructure or build new infrastructure because of energy security, energy resilience and the growing demand for energy from AI,” he said. “This can be power transmission, power grids or utility-type infrastructure.”

He added that such assets can generate returns well above inflation while benefiting from long-term demand driven by the energy transition and the rapid expansion of artificial intelligence.

In July, Loh Boon Chye, chief executive officer of the Singapore Exchange (SGX), announced plans to enhance the capabilities of the bourse’s digital disclosure portal, as part of broader efforts to strengthen transparency and attract investment into sustainability and climate-related businesses.

The upgrades will pave the way for the phased introduction of AI-powered capabilities to support companies in preparing disclosures, assessing climate-related risks and opportunities, and developing climate targets and transition plans.

“Recent geopolitical developments have clearly moved the needle” on climate discussions and corporate disclosures, Loh said, adding that similar shocks are likely to emerge to test companies.

Singapore’s climate tech ecosystem has also attracted entrepreneurs from elsewhere in the region.

Alterno, which develops sand batteries that store solar and wind energy as high-temperature heat, was established in Vietnam, and its main research and development center and production facility are still in the country. But it is now headquartered in Singapore. Its technology can reduce upfront costs compared with traditional lithium-ion batteries while lowering fire risks.

Cofounder Hai Ho said the two locations play complementary roles, with Vietnam providing engineering talent, lower operating costs, manufacturing capability and direct access to industrial customers, while Singapore serves as a regional base for fundraising, cross-border expansion and partnerships with institutions like the National University of Singapore.

"Vietnam is where we build; Singapore is where the world can verify what we built," he said.

The company has received funding from UntroD Capital Asia, a Southeast Asia-focused Japanese investor, with participation from ADB Ventures, the venture arm of the Asian Development Bank.

As concerns over energy costs and energy security grow, Alterno is providing its battery systems as a zero-emission heating alternative for factories, including those operated by food and beverage giant PepsiCo.

With Chinese competitors expanding rapidly and competing aggressively on price, maintaining a cost-efficient base in Vietnam has become an essential part of Alterno’s strategy.

Other overseas-founded climate tech companies are also raising capital through Singapore, leveraging the city-state’s position as a financial hub and its government-backed innovation and startup ecosystem.

RWDC Industries has raised a total of $263 million from investors including Temasek, according to Tracxn. The biotechnology startup scaled up its operations in the U.S. before establishing production in Singapore for biodegradable biopolymer materials used in consumer packaged goods.

Amperesand, which has engineering and manufacturing hubs in the U.S., raised $80 million in 2025 in a funding round co-led by Temasek.

The company develops next-generation power infrastructure for AI data centers and other industrial applications. It has carried out pilot tests at the Port of Singapore, supporting a charging pilot with PSA International, a Singapore-based port operator and logistics services provider.

Singaporean startups are also earning recognition overseas. Last week, businesses from the city-state won two of the three categories at Climate Impact Innovations Challenge 2026, in Indonesia, a competition organized by Indonesia-based East Ventures, Temasek Foundation and Tencent.

CRecTech triumphed in the energy transition track and Blueyou came first in the food and energy solutions section. Each won 5 billion rupiah ($280,000), and CRecTech was also selected to receive $1 million in carbon credits from Tencent and $50,000 in funding from Sinarmas, an Indonesian company.

“With this prize money, we have a lot of responsibility to execute,” Lim Kang Hui, CRecTech co-founder and CEO, told Nikkei Asia, “to actually make a meaningful, positive impact, especially to Indonesia’s economy.”

CRecTech was spun out of the National University of Singapore, where Lim studied. He explained that during his research he recognized the potential of agricultural waste in Indonesia, which became the starting point for the company’s technology to convert gas derived from wastewater generated at palm oil mills into liquid biomethanol, which is easier to transport.

“For us, [green tech] is about making a positive impact where we want to slash that green grimness down to zero -- so essentially creating a value from waste that does not require people to pay more,” Lim said.

Heng Li Lang, one of the competition judges and head of climate and livability at Temasek Foundation, said funding is “just one aspect” of what Singapore could offer.

“What is important for the whole is the ecosystem coming together,” she said. “Those with the innovation -- those who are willing to test it.”

Companies such as [Indonesian state oil company] Pertamina or Sinarmas also play important roles as carbon offtakers, she said. “So it’s the whole value chain of people that must come together for a project to be successful.”

Additional reporting by Natsumi Kawasaki in Jakarta

A version of this article was first published by Nikkei Asia on Oct 13 2026.
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