[EVENT] Key takeaways from the paper presentations during the "Blended Finance – De-risking or Concessionality?" session at the 14th SKBI Annual Conference on Transition Finance. Dr Raúl C. Rosales, PhD (Imperial College London) presented his study “Mobilizing finance for net zero energy systems” and highlighted blended finance's potential for financial innovation to enhance transition funding solutions. He brought up the need to scale commercial bank lending to meet the capital requirements for decarbonisation and adaptation projects. Referencing Multilateral Development Banks (MDBs), he higlighted that they should play a larger role in providing catalytic or concessional financing support that strengthens blended finance structures and makes them more appealing to investors. To find out more, download Dr Raul's presentation slides here >> https://lnkd.in/gtNiCmNe Professor Hao Liang (Singapore Management University) addressed the complexities of decarbonization in Asia, highlighting the region's significant energy consumption. Sharing from his paper, “Greening the Brown Sectors with Transition Finance: International and Chinese Evidence”, he emphasized that the rationale for green businesses must encompass both green and brown sectors, underscoring the need for transition finance for brown firms. He discussed financial instruments like transition bonds, providing an example of a coal-dependent firm in Indonesia that used transition bonds to shift to cleaner energy. His empirical findings indicated that increased debt costs lead to worse environmental performance in brown businesses, while lower capital costs allow them to improve their green ratios. These findings can be extended to international sample. Professor Hao concluded by emphasizing the role of blended finance in mitigating risks associated with renewable energy adoption, thereby facilitating de-risked investments. To find out more, download Professor Hao's presentation slides here >> https://lnkd.in/gHx3YzXK
Sim Kee Boon Institute for Financial Economics at SMU (SKBI)’s Post
More Relevant Posts
-
The report “Unlocking Transition Finance in Asia” by the Asia Transition Finance Study Group (ATF SG) explores strategies to expand #transitionfinance in #Asia to support its shift to a #lowcarboneconomy. It highlights the importance of public and private collaboration to overcome barriers and manage risks. 1. Defining Transition Finance: Transition finance refers to financial flows directed at companies and industries in high-carbon sectors to help them reduce emissions while aligning with #climategoals. This finance is essential for sectors that are harder to decarbonize but are crucial for Asia’s economic landscape, such as energy, manufacturing, and heavy industries. 2. Risk Management and Feasibility: The report emphasizes the need to manage risks associated with transition finance to ensure project feasibility and bankability. Effective #riskmanagement strategies include public-private partnerships, guarantees, and blended finance solutions, which combine #publicfunds with #privateinvestment to de-risk projects. 3. Collaboration Between Public and Private Sectors: Public entities can play a critical role by providing policy frameworks, regulatory support, and financial incentives that encourage private sector investment in transition finance. Private sector involvement is key to scaling up the necessary capital and fostering innovation in #greentechnologies. 4. Market Challenges: The report outlines several challenges faced by transition finance in Asia, including policy uncertainty, a lack of clear transition pathways for high-emission sectors, and insufficient financial products tailored for transition projects. Addressing these challenges requires coordinated efforts between policymakers, #financialinstitutions, and #industryleaders. 5. Recommendations for Scaling Transition Finance: To unlock transition finance in Asia, the report proposes several key actions: • Develop clearer definitions and standards for what constitutes transition activities and finance. • Foster greater collaboration between financial institutions, governments, and businesses to structure and support transition projects. • Implement targeted financial instruments, such as #greenbonds and sustainability-linked loans, tailored to transition projects. • Encourage transparency and reporting to track progress towards emissions reductions and compliance with climate goals. 6. Case Studies and Best Practices: The report includes examples of successful transition #financeinitiatives in Asia, illustrating how both public and private actors have collaborated to finance and de-risk projects in high-emitting sectors. These case studies offer valuable insights into practical solutions for scaling up transition finance. In conclusion, the report emphasizes that scaling up transition finance is essential for Asia’s decarbonization. Public-private partnerships and #financialinstruments are key to accelerating the transition while ensuring economic growth and stability.
-
Related Content | Navigating Transition Finance: An Action List Mak’s Research and Policy Center report draws attention to the pivotal role transition finance can play in decarbonizing high carbon-emitting sectors. The objectives of this report are to enhance comprehension of transition finance, pinpoint obstacles to widespread implementation, and explore potential collaborations. https://ow.ly/mA5p50TYHOk
Navigating Transition Finance: An Action List
rpc.cfainstitute.org
-
ESG & Sustainability | Strategy Formulation & Execution | Corporate Governance | Digital Transformation | Sustainable Finance & Investment | Risk Management | Project Management | Portfolio Management
In my recent piece with Arab News , I argue that transition finance is a key driver of economic transformation, helping countries move from high-carbon economies to more sustainable ones. Capital markets now feature transition bonds and debt securities aimed at helping high-carbon industries adopt greener practices. These bonds allow investors to support sustainable transformation while earning returns. Policymakers and financial organizations are actively promoting transition finance through various policies and incentives. Thus, transition finance ideas like blended finance — public-private partnership finance solutions — are expected to expand and enhance the potential of transition finance. https://lnkd.in/ddGMv9cm
Transition finance as a catalyst for economic transformation
arabnews.com
-
Related Content | Navigating Transition Finance: An Action List Mak’s Research and Policy Center report draws attention to the pivotal role transition finance can play in decarbonizing high carbon-emitting sectors. The objectives of this report are to enhance comprehension of transition finance, pinpoint obstacles to widespread implementation, and explore potential collaborations. https://ow.ly/mA5p50TYHOk
Navigating Transition Finance: An Action List
rpc.cfainstitute.org
-
Related Content | Navigating Transition Finance: An Action List Mak’s Research and Policy Center report draws attention to the pivotal role transition finance can play in decarbonizing high carbon-emitting sectors. The objectives of this report are to enhance comprehension of transition finance, pinpoint obstacles to widespread implementation, and explore potential collaborations. https://ow.ly/mA5p50TYHOk
Navigating Transition Finance: An Action List
rpc.cfainstitute.org
-
Related Content | Navigating Transition Finance: An Action List Mak’s Research and Policy Center report draws attention to the pivotal role transition finance can play in decarbonizing high carbon-emitting sectors. The objectives of this report are to enhance comprehension of transition finance, pinpoint obstacles to widespread implementation, and explore potential collaborations. https://ow.ly/mA5p50TYHOk
Navigating Transition Finance: An Action List
rpc.cfainstitute.org
-
Related Content | Navigating Transition Finance: An Action List Mak’s Research and Policy Center report draws attention to the pivotal role transition finance can play in decarbonizing high carbon-emitting sectors. The objectives of this report are to enhance comprehension of transition finance, pinpoint obstacles to widespread implementation, and explore potential collaborations. https://ow.ly/7J8U50TYHOl
Navigating Transition Finance: An Action List
rpc.cfainstitute.org
-
Related Content | Navigating Transition Finance: An Action List Mak’s Research and Policy Center report draws attention to the pivotal role transition finance can play in decarbonizing high carbon-emitting sectors. The objectives of this report are to enhance comprehension of transition finance, pinpoint obstacles to widespread implementation, and explore potential collaborations. https://ow.ly/7J8U50TYHOl
Navigating Transition Finance: An Action List
rpc.cfainstitute.org
-
Related Content | Navigating Transition Finance: An Action List Mak’s Research and Policy Center report draws attention to the pivotal role transition finance can play in decarbonizing high carbon-emitting sectors. The objectives of this report are to enhance comprehension of transition finance, pinpoint obstacles to widespread implementation, and explore potential collaborations. https://ow.ly/7J8U50TYHOl
Navigating Transition Finance: An Action List
rpc.cfainstitute.org
