Location: Australian Pavilion, Blue Zone
Organizers: DFAT & Convergence
Panelists:
- Joan Larrea, CEO, Convergence, moderator.
- Lori Kerr, CEO, FinDev Canada
- Dana Barsky, Global Head of Sustainability Strategy and Net Zero, Standard Chartered Bank
- Kitty Bu, Vice President, Asia, Global Energy Alliance for People and Planet (GEAPP)
- Mason Wallick, SEACEF
Event type: This event will include one panel discussion. Following this discussion, the audience attendees will be invited to join the conversation, adding their own perspectives, experiences, and questions.
Background:
The economies of the Indo-Pacific and SEA regions are highly indebted, and climate vulnerable. Traditional climate finance flows are nowhere near the levels they need to be to reach climate targets. While blended finance is a proven tool for channeling private capital to places where it typically doesn’t flow, Convergence finds that climate blended finance flows have been declining; climate blended finance deal volume decreased by 55% in 2022 compared to 2021, and institutional investors are yet to take a strategic approach to blended finance. Blended finance will be an essential tool in reaching regional targets for net zero and supporting the region’s energy transition. Coal plants in Asia and the Pacific account for one-fifth of global emissions and the dependency on the commodity is expected to continue. Against this backdrop, the cost of the transition is estimated at over $9 trillion annually through 2050 in ASEAN countries alone. Already in the region, blended finance is being deployed mainly towards energy transactions: the energy sector accounts for the largest percentage of ASEAN deals in the Convergence database, while renewable energy is currently the largest sub-sector by deal volume (33%). Likewise, blended finance has shown promise in supporting the energy sector in South Asia, with energy transactions accounting for over 25% of blended finance transactions. Blended finance also has demonstrated significant application towards the early retirement of coal using Energy Transmission Mechanisms (ETMs). This panel discussion provides a venue to explore the factors behind these trends, to better understand experiences on both the supply (investors) and demand (recipients) side of capital.
Convergence observes few investors engage in climate blended finance on a consistent basis; according to Convergence’s State of Blended Finance 2023 report, 64% of investors have made less than three investments into climate blended structures. In part, this is because official donor agencies of most countries do not have a front door that prospective blended finance sponsors can walk through to discuss partnering on transactions. Additionally, we see that climate rhetoric is yet to translate into serious climate investment among institutional investors.
Objectives:
- How to utilize blended finance to mobilize capital for climate finance - including transition finance in the Indo-pacific and Southeast Asia
- What are the primary barriers to more consistent and scaled climate finance investment from institutional investors in these regions?
- What are successful examples of innovative climate blended finance structures and instruments deployed to mitigate risks and mobilize private investments in these regions and how can they be scaled or replicated?