ACE and ESI@NUS Leads Discussion on Financing Decarbonisation at SIEW 2023

by User Not Found Oct 27, 2023, 10:45 AM

Pioneering Dialogue on ASEAN's Path to Carbon Neutrality Amidst Singapore International Energy Week 2023. Rinda Rufaidah, Aldilla Noor Rakhiemah, Sita Rahmani and Nur Azha Putra report.

In a world confronted by the imperative of carbon neutrality, ASEAN stands as a significant global contributor to the shift towards a sustainable, decarbonised energy landscape. Achieving the audacious target of a 23% renewable energy share in the total primary energy supply (TPES) by 2025 necessitates substantial investments. To address this challenge, the ASEAN Centre for Energy (ACE) through ASEAN Climate Change and Energy Project Phase 2 (ACCEPT II) and the Energy Studies Institute at the National University of Singapore (ESI@NUS) recently co-hosted a transformative roundtable, "Financing ASEAN Decarbonisation Roadmap towards Carbon Neutrality," during Singapore International Energy Week (SIEW) 2023.

Beni Suryadi, Manager of ACE, highlighted the need for proactive adaptation to the complex energy landscape in the region. He said, “Robust policies, sustainable investments, and regional cooperation are pivotal in achieving renewable energy targets. A collaborative regional approach is essential for advancing the ASEAN Strategy on Carbon Neutrality.”

Following up on that, Associate Prof. Lee Poh Seng, Executive Director of ESI, emphasised the need for a well-balanced approach to the energy transition. He said, “This approach must encompass sound policies, effective collaboration between the public and private sectors, and technological advancements to shape the narrative of this transition. The synergy between green financing and technology plays a pivotal role in fostering innovation and the development of eco-friendly technologies.”

Moving to the scene setting presentation, Dr Kim Jeong Won, Senior Research Fellow of ESI, presented a join presentation of ESI and ACE. Dr Kim elaborated the required amount of investment and various sources of funding to achieve the ASEAN Decarbonisation. Southeast Asia Energy Outlook 2022 by International Energy Agency (IEA) mentioned energy investment in Southeast Asia needs to reach an annual average of US$130 billion by 2030.

“Decarbonisation projects in ASEAN could utilise source of financing from bilateral/multilateral agreement, such as Official Development Assistance (ODA), domestic finance such as green bonds, and private investment. The data shows that clean energy investments in Southeast Asia have relied heavily on public sources of finance” said Dr Kim Jeong Won.

The first panel discussion, titled "Financing from a Policy Perspective," was moderated by Dr Yao Lixia, Senior Research Fellow at the Energy Studies Institute (ESI). The panel featured three experts, including Jennifer Tay, Infrastructure Leader at PwC. Architrandi Priambodo, Senior Energy Specialist at the Asian Development Bank (ADB), and Dr Kim Jeong Won, Senior Research Fellow at Energy Studies Institute (ESI).

The discussion explored trends in private sector financing and its focus on OECD countries, the significance of carbon financing, and the role of ODA in financing green projects. It underscored the importance of ODA as the initial foundation for financing green projects, with the recipient country's government capacity being a key factor.

"Our discussions have highlighted the critical need for strategic financing to enable the transition to a more sustainable energy landscape in ASEAN. Through well-structured policies and innovative financial tools, we can accelerate the adoption of renewable energy,” said Jennifer Tay, Infrastructure Leader, PwC.

Moving on to the second panel discussion, titled "Financing from a Technology Perspective," was moderated by Aldilla Noor Rakhiemah, Senior Research Analyst at the ACE. The panel featured three experts, including Xiang Long Koh, Head of Corporate Finance at EDPR, King Lee, Head of Policy and Industry Engagement at the World Nuclear Association, and Lawrence Chen, Managing Director of Asia-Pacific Huawei Sales Financing at Huawei International.

The second panel delved into the financing of renewable energy projects, the role of nuclear technology in achieving carbon neutrality, and the prolonged commercialization periods of green projects. It stressed the need for cost-sharing among financial institutions to enhance financing capacity.

King Lee, Head of Policy and Industry Engagement, World Nuclear Association shared his perspective, "Our deliberations have emphasised the need for innovative financing strategies that facilitate the transition to a sustainable energy landscape. By harnessing technology and making strategic investments, we can drive the clean energy revolution in ASEAN and address carbon neutrality effectively.”

The roundtable emphasised the critical need for a collaborative regional approach to address the financing challenges associated with ASEAN's journey towards decarbonisation and carbon neutrality. During the discussions, the existing Clean Energy Financing mechanisms were examined, and barriers hindering investments in clean energy were identified. Furthermore, the digital transformation has given rise to new business models, attracting non-traditional energy enterprises, including digital technology companies, into the energy sector. This influx of non-traditional players presents the potential to create new funding pools for financing ASEAN's decarbonisation efforts, marking a significant shift in the industry.

This roundtable highlighted the critical need for a collaborative regional approach to secure investments for decarbonisation, accentuating the role of both public and private capital investments in achieving renewable energy targets. It aims to contribute to ASEAN's ambitious decarbonisation objectives, providing a platform for knowledge sharing and collaboration to meet the region's set targets, aligning with SIEW 2023's theme, "Energy Transition Towards a Net Zero World."