The Monetary Authority of Singapore (MAS) has injected seed capital into a S$5 million Asia Climate Solutions Design Grant which aims to help fund innovations in blended finance. The grant, hosted by blended finance global network Convergence, will provide early-stage funding for proof of concept and feasibility studies on innovative and scalable blended finance solutions to fund sustainability projects. It will also seek solutions to help mobilise capital into high impact sectors that are significantly under-capitalised in Asia such as early-stage climate adaptation and mitigation technology, as well as access to clean energy. The region’s blended finance programmes are too few and too small according to MAS managing director Ravi Menon, who said: “We need a more systematic and coordinated approach to mainstream blended finance”. To promote blended finance, Menon said there needs to be a “pipeline of shovel-ready transition projects” appealing to the private sector. Menon also said the financial ecosystem also needs to work more synergistically. “Banks play a key role as lead managers for financing sustainability projects. However, with limited balance sheets and regulatory capital and liquidity requirements, banks need to offload these loans to institutional investors who have more absorptive capacity,” he said.
— Regulation Asia (@RegulationAsia) October 5, 2022