Pentagreen Capital to manage FAST-P’s Green Investments partnership, seeking to deploy US$1 billion for Asia’s sustainable infrastructure

Baku, November 12, 2024 - Pentagreen Capital ("Pentagreen"), the sustainable infrastructure debt financing company established by HSBC and Temasek, in its capacity as manager, today announced progress on the Green Investments partnership (the "Partnership"), an innovative blended finance programme set up to address climate finance gaps and increase the bankability of green and sustainable infrastructure in Asia. This follows the announcement at the 28th Conference of the Parties ("COP28") to the United Nations Framework Convention on Climate Change by MAS, Temasek, Allied Climate Partners ("ACP") and International Finance Corporation ("IFC") on the intent to collaborate towards developing bankable, climate-related projects and businesses in Asia.

The Partnership is seeking to deploy US$1 billion under Financing Asia's Transition Partnership ("FAST-P"), a blended finance initiative that aims to mobilise up to US$5 billion to finance the energy transition and marginally bankable green projects in Southeast Asia.

Developing Asia needs US$1.7 trillion annually in infrastructure investments until 2030 to maintain its growth momentum while responding to climate change.1 Many sustainable infrastructure projects in the region face difficulties in attracting commercial financing, and these gaps are more acute in the project development and construction phases. Blended finance can help unlock the flow of capital to such projects.

The Partnership seeks to bridge critical gaps in Southeast Asia's sustainable infrastructure financing needs through the deployment of blended finance, crowding in commercial and catalytic capital from public, private and philanthropic partners.

The Partnership will deploy capital to projects in sectors including renewable energy and storage, electric vehicle infrastructure, sustainable transport, and water and waste management, as well as those from other green infrastructure sectors. Over time, the Partnership will also increase the supply of bankable opportunities in the market.

HSBC and Temasek, as the founding shareholders of Pentagreen, will continue to commit capital. The Singapore Government will contribute concessional capital to the Green Investments partnership to match contributions from the other potential catalytic capital providers such as ACP. IFC is considering opportunities in providing appropriate financing that can in turn crowd in other capital providers. Capital deployment is expected to commence in 2025.

Marat Zapparov, Chief Executive Officer of Pentagreen Capital said: "We are honoured to progress the Green Investments partnership together with our partners. There is a clear and urgent need for more blended finance to scale up the available funding for sustainable infrastructure in Asia. No single financier can close Asia's infrastructure funding gap, but this diverse, international group of partners supporting the Green Investments partnership represents a step forward in our united ambition and effort to bridge the climate finance gaps in developing Asia."

Connie Chan, Head of Financial Services at Temasek said: "Developing Asia faces an acute gap in financing the green infrastructure the region requires for robust, sustainable growth in line with its decarbonisation goals. Addressing the bankability challenges such projects face is key, and through programmes like Green Investment partnership, we aim to crowd in more like-minded partners with the appropriate forms of capital to bridge the risk-reward disconnect inherent in these projects. Ultimately, we aim to contribute to change at the systems level, and unlock the necessary financial flows to accelerate the transition in Asia."

"The Green Investments partnership managed by Pentagreen Capital will enable us to support more sustainable projects and provide another model to accelerate the transition to a low carbon economy," said Greg Guyett, CEO of Global Banking and Markets at HSBC. "It is crucial that financing across the capital structure is accessible to a wider group of transition innovators, and we are convinced that blended finance is one way to do this. I believe that the strong commitment of our partners, regionally focused while globally connected, will significantly contribute to the success of the Green Investments partnership."

Leong Sing Chiong, Deputy Managing Director (Markets and Development) of the Monetary Authority of Singapore ("MAS") said: "We are encouraged by the progress made by Pentagreen and its partners on the Green Investments partnership, which uses blended finance to develop marginally bankable green projects to bankability. This is a significant step towards unlocking a broader public-private effort to mobilise finance for Asia's transition."

Ahmed Saeed, CEO of Allied Climate Partners ("ACP") said: "There is no path to net zero without a significant increase in the flow of climate finance to emerging economies. And that will not happen without well designed, innovative, and bold partnerships that leverage the best of the private, public, and philanthropic sectors. We applaud Pentagreen, its founding shareholders and Singapore's FAST-P for this promising initiative."

Riccardo Puliti, Regional Vice President for Asia Pacific at the International Finance Corporation ("IFC") said: "Climate change threatens environmental stability, economic growth, and human development in Asia. Improving access to finance for climate-smart, sustainable infrastructure projects in the region is critical not just to addressing this challenge, but also to creating markets, spurring growth, and creating jobs in the region's emerging and developing economies. This important initiative would help increase access to climate finance and the bankability of crucial green and sustainable infrastructure projects. IFC is proud to collaborate in this initiative with our unique global expertise and capital-mobilization capabilities."

Srini Nagarajan, MD and Head of Asia, British International Investment ("BII") said: "BII has been working alongside Pentagreen with HSBC and Temasek to develop this innovative blended finance programme and we're pleased that this important step towards its formation will help to mobilise more capital towards addressing the climate finance gap in Asia."

Peteris Ustubs, Director for the Middle East, Asia and Pacific at the European Commission's Directorate-General for International Partnerships said: "The European Commission is proud to support the Green Investments partnership, under the Financing Asia's Transition Partnership (FAST-P), as part of our Global Gateway strategy. This partnership reflects our commitment to promote sustainable, high-quality infrastructure and working closely with the private sector, all while supporting the goals and values we share with our partner countries."

Monika Beck, Member of the German Development Finance Institution ("DEG") Management Board said: "Investments into renewable energy are a central part of DEG's strategy with a focus on high-impact and climate friendly projects. Initiatives such as Pentagreen and the Green Investments partnership that target this crucial sector therefore offer a very interesting opportunity to achieve the positive climate impact we are striving for."

Huib-Jan de Ruijter, Co-Chief Investment Officer at FMO, the Dutch Entrepreneurial Development Bank said: "At FMO, we are committed to driving sustainable development through strategic partnerships that align with our focus on climate resilience and inclusive finance. Our foreseen collaboration with Pentagreen represents a significant step toward mobilising resources for impactful projects that address the climate finance gap in Asia. We look forward to working alongside many longstanding partners to make meaningful contributions to the region's green transition".

About Pentagreen Capital

Pentagreen Capital is a debt financing company dedicated to catalysing sustainable infrastructure projects, with an initial focus on Southeast Asia. Based in Singapore, it seeks to remove barriers that prevent marginally bankable and innovative sustainable infrastructure projects from accessing capital, through a combination of technical assistance and blended finance at scale. Pentagreen will support initiatives in the renewable energy and storage, water and waste treatment, and sustainable transportation sectors, as it helps to build resilience to offset the global impact of climate change. For more information, please visit www.pentagreen.com.

About Temasek

Temasek is a global investment company headquartered in Singapore, with a net portfolio value of S$389 billion (US$288b, €267b, £228b, RMB2.08t) as at 31 March 2024. Marking its unlisted assets to market would provide S$31 billion (US$23b, €21b, £18b, RMB166b) of value uplift and bring its mark to market net portfolio value to S$420 billion (US$311b, €289b, £247b, RMB2.25t). Temasek's Purpose "So Every Generation Prospers" guides it to make a difference for today's and future generations. Operating on commercial principles, Temasek seeks to deliver sustainable returns over the long term. It has 13 offices in 9 countries around the world: Beijing, Hanoi, Mumbai, Shanghai, Shenzhen, and Singapore in Asia; and Brussels, London, Mexico City, New York, Paris, San Francisco, and Washington, DC outside Asia.

For more information on Temasek, please visit www.temasek.com.sg

For Temasek Review 2024, please visit www.temasekreview.com.sg

For Sustainability Report 2024, please visit www.temasek.com.sg/SR2024

About HSBC

HSBC Holdings plc, the parent company of HSBC, is headquartered in London. With assets of $3.1tn at 30 September 2024, HSBC is one of the world's largest banking and financial services organisations.

About MAS

The Monetary Authority of Singapore (MAS) is Singapore's central bank and integrated financial regulator. As a central bank, MAS promotes sustained, non-inflationary economic growth through the conduct of monetary policy and close macroeconomic surveillance and analysis. It manages Singapore's exchange rate, official foreign reserves, and liquidity in the banking sector. As an integrated financial supervisor, MAS fosters a sound financial services sector through its prudential oversight of all financial institutions in Singapore - banks, insurers, capital market intermediaries, financial advisors and financial market infrastructure. It is also responsible for well-functioning financial markets, sound conduct, and investor education. MAS also works with the financial industry to promote Singapore as a dynamic international financial centre. It facilitates the development of infrastructures, adoption of technology, and upgrading of skills in the financial industry.

The Green Investments partnership is part of the Financing Asia's Transition Partnership ("FAST-P"), a Singapore blended finance initiative in collaboration with key public, private and philanthropic sector partners that aims to mobilise up to US$5 billion to de-risk and finance transition and marginally bankable green projects in Asia. FAST-P brings together stakeholders including multi-lateral development banks, sovereign partners, philanthropic organisations, and the financial sector to support Asia's decarbonisation, narrow the financing gap through the mainstreaming of blended finance, and support economic growth and climate resilience in Asia.

About ACP

Allied Climate Partners (ACP) is a philanthropic investment organization with a mission to accelerate the climate transition and improve livelihoods in emerging economies by increasing the flow of capital to bankable, climate-related projects and businesses. ACP selects regional investment managers in emerging economies and supports them with first-loss capital, expertise, and the mandate to address a critical financing gap at the early, risk-oriented stages of the development process for climate-related projects and asset-oriented businesses. Without this support, many projects and businesses struggle to attract the necessary capital to achieve their climate-related goals. By proving this model, ACP aims to induce commercially-oriented public and private sector investors to invest where they likely would not otherwise.

About British International Investment

British International Investment is the UK's development finance institution and impact investor. As a trusted investment partner to businesses in Africa, Asia and the Caribbean, BII invests to create productive, sustainable and inclusive economies in our markets. Between 2022-2026, at least 30 per cent of BII's total new commitments by value will be in climate finance. BII is also a founding member of the 2X Challenge which has raised over $33.6 billion to empower women's economic development. The company has investments in over 1,580 businesses across 65 countries and total net assets of £8.5 billion. For more information, visit: www.bii.co.uk| watch here. Follow British International Investment on LinkedIn and X.

About the European Union

The European Union (EU) is the economic and political union of 27 Member States. Together, the EU has built a zone of stability, democracy and sustainable development while maintaining cultural diversity, tolerance and individual freedom. In 2012, the EU was awarded the Nobel Peace Prize for advancing the goals of peace, reconciliation, democracy and human rights in Europe. The EU is the world's largest trading bloc, and the world's largest source and destination of foreign direct investment. Collectively, the EU and its Member States are the largest donors of Official Development Assistance (ODA). The 27 Member States of the EU (in protocol order) are: Belgium, Bulgaria, Czech Republic, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland and Sweden.

About Global Gateway

Global Gateway is the EU's positive offer to reduce the worldwide investment disparity and boost smart, clean and secure connections in digital, energy and transport sectors, and to strengthen health, education and research systems. The Global Gateway strategy embodies a Team Europe approach that brings together the European Union, EU Member States, and European development finance institutions. Together, we aim to mobilise up to €300 billion in public and private investments from 2021 to 2027, creating essential links rather than dependencies, and closing the global investment gap.

About German Development Finance Institution (DEG)

For more than 60 years, DEG has been financing and advising private enterprises operating in developing and emerging-market countries. With a portfolio of around EUR 10.3 billion we're one of the largest private-sector development financiers. As an impact and climate investor we accompany companies that are addressing transformation and aiming to seize their opportunities. Our customers not only receive financing and advisory solutions tailored to their needs: they can build on our market knowledge, our impact and climate expertise and our international network. In this way, DEG, a subsidiary of KfW, contributes to creating more skilled jobs and local income and to improving value creation on the ground in line with the SDGs. Learn more: www.deginvest.de

About FMO

FMO is the Dutch entrepreneurial development bank. As a leading impact investor, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes that a strong private sector leads to economic and social development and has a 50+ year proven track-record in empowering entrepreneurs to make local economies more inclusive, productive, resilient and sustainable. FMO focuses on three sectors that have high development impact: Agribusiness, Food & Water, Energy, and Financial Institutions. With a total committed portfolio of EUR ~13 billion spanning over 85 countries, FMO is one of the larger bilateral private sector development banks globally. For more information: please visit www.fmo.nl.

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