ADB, GEAPP, and MAS Join Forces to Create Energy Transition Acceleration Finance Alliance in Asia

In a groundbreaking development, the Asian Development Bank (ADB), the Global Energy Alliance for People and Planet (GEAPP), and the Monetary Authority of Singapore (MAS) have unveiled plans to establish a blended finance partnership. The primary goal of this alliance is to expedite the energy transition across Asia on a significant scale.

With the exponential rise in economic growth, demographic expansion, and urbanization in the region, the demand for energy has surged. A staggering 85% of Asia’s energy consumption currently stems from fossil fuels, emphasizing the urgent need to curtail emissions while advancing developmental objectives.

Under a recently signed memorandum of understanding (MOU), the collaborative effort aims to mobilize concessional capital from philanthropic and public sectors. This initiative seeks to mitigate project risks and attract private capital from global sources to finance pivotal energy transition projects in Asia. Among these projects are the early retirement of coal assets, to be replaced with renewable energy, and initiatives focused on decarbonizing challenging sectors.

Signed during the COP28 summit, the MOU sets the stage for an alliance that promises to develop a robust project pipeline while implementing innovative financing structures to drive decarbonization efforts across Asia. Notably, the partnership intends to explore the use of high-integrity transition carbon credits, enhancing the viability and sustainability of replacing coal assets with renewable energy sources. Furthermore, the transactions will adhere to globally recognized standards, including those set by the Glasgow Financial Alliance for Net Zero (GFANZ) APAC guidelines, the Singapore–Asia Taxonomy, and ASEAN taxonomy.

In a bid to raise up to $2 billion in concessional and commercial capital, the partnership will leverage ADB’s extensive network and expertise in the region. ADB will contribute origination, transactional support, and technical assistance, drawing on its broader Energy Transition Mechanism (ETM) initiative and a portfolio of investable projects. GEAPP will bring philanthropic capital, expertise in energy transition, and a coalition of committed partners to the table. MAS, on its part, will mobilize stakeholders within Singapore’s financing ecosystem and provide policy support. MAS’s contributions will include transition planning guidance, transition-focused taxonomy, and initiatives like the Transition Credits Coalition (TRACTION) for high-integrity transition carbon credits.

Masatsugu Asakawa, President of ADB, highlighted the urgency of climate action and praised the partnership as a critical step in combating climate change. Kitty Bu, GEAPP Asia Vice-President, expressed confidence that the partnership would mobilize essential capital to fortify clean energy ecosystems. Ravi Menon, Managing Director of MAS, emphasized the significance of blended finance and carbon credits in facilitating an equitable and effective energy transition across Asia.

The collaboration encourages global philanthropies, development finance institutions, long-term investors, banks, and financiers to join forces in this public–private partnership. The overarching goal remains to expand access to clean energy in Asia, reduce greenhouse emissions, and contribute to a sustainable planet.