Singapore's state investment company, Temasek, has announced a commitment of S$100m towards climate action as part of its 50th-anniversary celebrations.
Temasek’s chair Lim Boon Heng, revealed the new Concessional Capital for Climate Action (CCCA) initiative during a speech at the anniversary dinner last week.
Concessional capital, a form of financing which provides loans at favourable terms, for example through lower interest rates or longer repayment periods is often deployed by development banks to accelerate climate finance, it is relatively less common for institutional investors to lend on such terms.
The CCCA aims favourable financing to support climate initiatives, particularly in emerging markets like Southeast Asia. The region, home to more than half the world's population and responsible for over 50% of global carbon emissions, faces structural challenges in decarbonising while simultaneously growing its industries. By offering concessional capital, Temasek hopes to bridge the gap in climate financing, addressing risks and high costs that hinder private investment in green projects.
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"Climate change is the defining crisis of our time," said Mr Lim. "Through the Concessional Capital for Climate Action, we hope our community gift can contribute to concessional capital emerging as an asset class, mobilising the varied forms of capital necessary to bridge the climate financing gap."
The S$100m commitment is funded by Temasek’s community gifts, which have been set aside since 2003 to drive intergenerational impact. These gifts, derived from Temasek’s net positive returns, focus on connecting people, uplifting communities, protecting the planet, and advancing capabilities.
Overall, Temasek says it has has committed some S$44bn to climate finance and energy transition investments among others through strategic partnerships with BlackRock and Brookfield.
