September 25, 2024
The “Future of Transition Finance Initiative” and Industry Consultation Report Launch to Accelerate Asia’s Coal to Clean Energy Transition
The “Future of Transition Finance Initiative” and Industry Consultation Report Launch to Accelerate Asia’s Coal to Clean Energy Transition
Lawrence Ang, Managing Partner
Farzana Hoque, Senior Advisor
Lawrence Ang, Managing Partner
Farzana Hoque, Senior Advisor
September 25, 2024 – Climate Smart Ventures (CSV) is pleased to announce the launch of a new report and initiative focused on scaling transition finance to accelerate Asia’s shift from coal to clean energy. The report, titled The Future of Transition Finance in Asia: Addressing the Risk-Return Dilemma & Unlocking Capital for the Coal to Clean Energy Transition, is designed as an industry consultation paper.
The report addresses a critical challenge in the region’s energy transition: the “risk-return dilemma” faced when retiring coal-fired power plants (CFPPs) before the end of their technical lifespan. It delves into how this dilemma unfolds and demonstrates how transition finance can act as a powerful value driver, capable of bridging the risk-return dilemma when a CFPP owner might otherwise not be incentivized to retire a plant earlier than originally planned.
The report includes the following sections:
- CFPP phase out in Asia and the risk-return dilemma
- The role of concessional funding in supporting transition finance
- Case studies – a review of different approaches with and without concessional finance
- Existing and potential transition finance strategies and instruments to unlock a coal to clean energy transition
- Field questions on the future of transition finance
CSV extends its sincere gratitude to the external reviewers, including representatives from financial institutions, nonprofit organizations, industry associations, government, a development bank, and other subject matter experts across Asia, for their invaluable feedback and insights on this topic and report.
Download the report here.
To further drive momentum for financing Asia’s shift from coal to clean energy, CSV is launching a year-long “Future of Transition Finance Initiative” (FTFI). The initiative comprises four phases, the first of which is the publication of this consultation paper:
- Release consultation paper with background information and field questions to facilitate industry discussions and collaboration on pressing challenges (September 2024)
- Engage key stakeholders, such as power companies, financial institutions, government agencies, and regional climate leaders, to gather input and foster solutions (October – December 2024)
- Mobilize first movers and facilitate real transactions that accelerate the closure of CFPPs (January 2025 onwards)
- Share follow up insights to contribute to industry learning and adaptation (January – June 2025)
For inquiries about the report, participation in upcoming events, or collaboration opportunities related to the FTFI, please contact Farzana Hoque at farzana@climatesmartventures.com.
**About Climate Smart Ventures**
Climate Smart Ventures specializes in capital market-driven solutions to accelerate the shift from conventional to renewable energy to deliver a just and managed transition suited for Asia’s growth. Our expertise and projects span utility-level coal-to-clean energy transition, industrial decarbonization, grid transformation, transition finance, carbon finance and project development, and government-level policy engagements. Ecosystem building and collaboration are key pillars of our firm, and we partner closely with the region’s leading corporates and power portfolio owners, investors, off-takers, and others to innovate and execute solutions.