Singapore-IRENA Forum: Strategies to Mobilise Clean Energy Investments

Significant investments are required if we are to make the rapid switch to renewables. The Singapore-IRENA High-Level Forum discussed what’s needed to mobilise financing. Joyce Ng reports

Singapore-IRENA Forum Key Strategies to Mobilise Clean Energy Investments 1

The theme for the Singapore-IRENA High-Level Forum centred on "Investing in an Inclusive and Just Clean Energy Transition". With that in mind, speakers shared their perspectives on the financing challenges, opportunities and strategies to attain this goal.

Global challenges and opportunities in clean energy

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Keynote speaker H.E. Dato Lim Jock Hoi, Secretary-General of ASEAN, started by providing an overview of developments in the ASEAN region—highlighting that as a diverse developing region, clean energy transition is “not an easy task” for member countries that are traditionally dependent on fossil fuel. The roadmap towards cleaner energy would, thus, require relatively higher costs compared to other parts of the world.

Notwithstanding the present challenges, H.E. Dato Lim was heartened to share that ASEAN has chartered a long-term regional target, and highlighted two major needs to propel the region towards lower emission energy systems:

  1. The need to improve the investment environment for energy transition in ASEAN, as “the financing cost in the developing world is seven times more expensive”.
  2. The need to expand beyond existing sources of finance. The ASEAN region is estimated to require US$367 billion to achieve its 2035 renewable energy share, which is only a fraction of the region’s requirement in the next five years.

H.E. Dato Lim elaborated that a combined effort from key enabling sectors or policy areas is critical for investment in clean energy transition. An example is the ongoing efforts between ASEAN and the Central Bank to create a common language for financing green and sustainable initiatives to the ASEAN taxonomy for sustainable financing.

Efforts are underway to enhance carbon pricing instruments in the region, build public policy support and develop partnerships with the private sector to ramp up sustainable energy investment needs.

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In her keynote address, H.E. Kadri Simson, Commissioner for Energy of the European Union (EU), echoed the same sentiments that public financing alone is not enough. She said that overall annual energy investments from 2021 to 2030 would need to increase by almost €400 million in the EU. To facilitate private investments, the EU has introduced a taxonomy that puts in place six criteria to protect private investors and help shift investments by encouraging companies to become more climate-friendly.

Government support—a first step to enabling financing

The right regulatory frameworks and government incentives have to be put in place to attract sizeable energy investments.

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Keynote speaker H.E. Arifin Tasrif, Minister of Energy and Mineral Resources, Republic of Indonesia, said that the Indonesian Government is prepared to increase investment. With the prospective domestic market for renewable energy and abundant manpower resources in Indonesia, well-designed government frameworks could also aid in attracting investments, including:

  • Introducing fiscal and non-fiscal incentives;
  • Expanding and exploring new forms of financial instruments; and
  • Introducing regulations on renewable energy tariff and carbon pricing tariff.

H.E. Dr João Saldanha de Azevedo Galamba, Deputy Minister and Secretary of State for Energy of the Portuguese Republic, shared how the Portuguese government has introduced feed-in tariffs, which provide blended finance, and launched incentives for private sectors to facilitate the country’s move towards decarbonisation.

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Gauri Singh, Deputy Director-General of International Renewable Energy Agency (IRENA), opined that “getting the cost of finance lowered is the way forward”. In addition, she also shared her views on how funding from institutional investors on renewables was lacking, and that governments should attract such investors through green bonds or capital market regulations.

Ulrich Benterbusch, Deputy Director-General at the Federal Ministry for Economic Affairs and Energy of Germany, highlighted that governments should focus on introducing the right framework for investment; garnering support from the whole society; and enhancing international cooperation to enable investments in green energy.

Speeding up the green transition with private-public collaboration

Expert speakers rounded up the discussion by highlighting the strategic collaboration needed to unlock opportunities for private-sector participation. This would be essential to scaling up green energy investments, particularly for the region.

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Kaveh Zahedi, Deputy Executive Secretary of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), highlighted that regional and cross-border connectivity is a key factor, although investment is insufficient in Asia. He shared insights on how third-party financing, joint ventures, and public-private partnerships can act as accelerators to attract financiers.

Eugene Cheng, Group Chief Financial Officer of Sembcorp Industries, shared from the industry lens on the importance of concerted efforts by the government and corporate sectors to articulate clear goals—in order to provide clarity to institutional investors, thereby enabling green financing.

Seth Tan, Executive Director of Infrastructure Asia, added that Multilateral Development Banks (MDBs) play a pivotal role in bridging the gap between the public and private sectors for climate projects. There are huge investment interests in green financing and energy transitions, and MDBs can act as a catalyst to creating bankable climate projects to facilitate investment.

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