Pentagreen Capital Announces Progress on Green Investments Partnership to Address Climate Finance Gaps in Asia

Pentagreen Capital, the sustainable infrastructure debt financing company established by HSBC and Temasek, has announced significant progress on its Green Investments partnership, aimed at addressing climate finance gaps and enhancing the bankability of green infrastructure in Asia. The Partnership, which was first introduced at the 28th Conference of the Parties (COP28), is set to develop bankable climate-related projects and businesses across the region.

The Green Investments partnership is focused on deploying US$1 billion under the Financing Asia’s Transition Partnership (FAST-P), a blended finance initiative designed to mobilize up to US$5 billion to finance Southeast Asia’s energy transition and other marginally bankable green projects.

Asia requires US$1.7 trillion annually in infrastructure investments until 2030 to maintain its growth while responding to climate change. However, many sustainable infrastructure projects in the region struggle to secure commercial financing, especially during the project development and construction phases. The Green Investments partnership aims to close these gaps by leveraging blended finance to attract commercial, public, and philanthropic capital.

The Partnership will focus on funding projects in renewable energy, electric vehicle infrastructure, sustainable transport, and water and waste management, among other green infrastructure sectors. Over time, the initiative aims to increase the supply of bankable opportunities in the region.

Pentagreen’s founding shareholders, HSBC and Temasek, will continue to commit capital to the partnership. The Singapore Government will contribute concessional capital, matching contributions from other catalytic capital providers such as Allied Climate Partners (ACP). The International Finance Corporation (IFC) is also exploring opportunities to provide appropriate financing and attract additional capital providers. Capital deployment is expected to begin in 2025.

Marat Zapparov, CEO of Pentagreen Capital, highlighted the importance of blended finance in scaling up funding for sustainable infrastructure. “No single financier can close Asia’s infrastructure funding gap,” Zapparov said. “This diverse group of partners represents a significant step forward in bridging the climate finance gap in developing Asia.”

Temasek’s Head of Financial Services, Connie Chan, emphasized the importance of addressing the bankability challenges of green infrastructure projects in the region. “Through the Green Investments partnership, we aim to bring in more like-minded partners to help bridge the risk-reward disconnect in these projects and accelerate Asia’s transition to a low-carbon economy,” Chan said.

Greg Guyett, CEO of Global Banking and Markets at HSBC, noted that blended finance is a key model to mobilize capital for sustainable projects. “This partnership will support more sustainable projects and contribute to the transition to a low-carbon economy,” Guyett said.

Leong Sing Chiong, Deputy Managing Director of Markets and Development at the Monetary Authority of Singapore, expressed his support for the initiative. “This is a significant step towards mobilizing finance for Asia’s transition through a broader public-private partnership,” he said.

The Green Investments partnership has received widespread backing from various stakeholders, including ACP, the IFC, the British International Investment (BII), the European Commission’s Directorate-General for International Partnerships, the German Development Finance Institution (DEG), and FMO, the Dutch Entrepreneurial Development Bank.

The initiative represents a major effort to address the climate finance gap in Asia, facilitating the growth of green infrastructure and accelerating the region’s transition to a sustainable future.