Fostering Public-Private Partnerships to Finance the Green Transition in 3 Crucial Areas

Two keynotes and four panellists from Australia, China, Indonesia, Japan and Singapore debate the role of the financial sector for green financing towards net zero and identify important areas to help move the needle. Rebecca Lee and Niu Yihao report.

At Session 3 of the SIEW Summit, ‘Securing Green Financing for a Net Zero Future’, four panellists discussed how collaboration between public and private sector stakeholders in green financing is essential for the clean energy transition in Asia Pacific. This took place at SIEW 2023 on 23 October.

The session opened with keynotes delivered by Rachmat Kaimuddin, Deputy Minister for Infrastructure and Transportation Coordination, Coordinating Ministry of Maritime Affairs and Investment, Republic of Indonesia and Li Rui, Chief Executive Officer, Guangzhou Power Supply Bureau.

These led the way to the panel discussion, of whom were in attendance:

• Gillian Tan, Chief Sustainability Officer and Assistant Managing Director, Monetary Authority of Singapore (MAS)
• Justin Oliver, Board Member, Australian Energy Regulator
• Yuki Yasui, Managing Director, APAC, The Glasgow Financial Alliance for Net Zero (GFANZ)
• Tatsushi Amano, Managing Executive Officer, Global Head of Energy and Natural Resources Finance Group, Japan Bank for International Cooperation (JBIC)

In this panel discussion, the collective shared their views on three crucial areas in which green financing was sorely needed to accelerate this journey towards net zero:

Enhancements to transmission infrastructure

Indonesia’s Deputy Minister for Infrastructure and Transportation Coordination, Rachmat Kaimuddin, said in his keynote that it is crucial to invest in the transmission system beyond just investing into renewable generation sources itself. This is especially important for countries such as Indonesia where demand is projected to grow in areas further away from traditional demand centers like Java.  

Justin Oliver, Board Member of the Australian Energy Regulator, shared that while there are significant costs and financing concerns associated with transmission infrastructure investments, there are ways for regulators to exercise flexibility in modifying the regulatory regime to support such investments.

Accelerating the retirement of coal-fired plants

Gillian Tan of the Monetary Authority of Singapore (MAS) highlighted that accelerating the retirement of coal-fired plants is a key needle-mover in energy transition, especially in the Asia Pacific region. The economics of phasing out coal is challenging due to long-term contracts and the relatively young age of coal plants in Asia. However, she believed that blended finance which combines commercial and concessional capital will be crucial to close the economic gap. In addition, carbon credits, or “transition credits” – as MAS calls it – could be used as an additional source of financing to phase out of coal. Ms Tan highlighted how collaboration is crucial, and close partnership with financiers, philanthropists and methodology developers would be needed.

Yuki Yasui, Managing Director, APAC, of the Glasgow Global Alliance for Net Zero also acknowledged that beyond investing into renewables, there was a need to take a systematic approach to support the phasing out of fossil fuels. This would include credible transition plans, financial viability, and just transition that accounts for the socio-economic impact on local communities. Collaboration will be needed across regulators to ensure a credible and well-managed phasing-out process in the region.

Accelerating investment into renewables

Tatsushi Amano, Managing Executive Officer, Global Head of Energy and Natural Resources Finance Group, Japan Bank for International Cooperation (JBIC) raised the importance of financing new technologies. JBIC’s role is to manage risks associated with emerging technologies. In this regard, he highlighted the government’s key role in providing policy guidance to raise investor confidence in capital investments. For example, the Japanese Diet approved constitution amendments in April to enable JBIC to invest in innovative technologies and take on more risks associated with emerging technologies, such as hydrogen.

Li Rui, Chief Executive Officer, Guangzhou Power Supply Bureau, shared that China Southern Power Grid itself has developed 35 green financial products in financial leasing, green funds, carbon asset management and green insurance since 2021.

As panellists highlighted the need for market design that will incentivise private capital investment into renewables and spoke about the need for a managed phase-out of coal-fired plants, emphasis was also placed on the importance of collaboration among public and private stakeholders to address challenges, and for a just and successful clean energy transition.