Singapore lender DBS announced Wednesday that it is providing a $210 million senior financing facility to ETAFCo, the investment vehicle supporting the displacement strategy of the Energy Transition Acceleration Finance partnership (ETAF) under Singapore’s Financing Asia’s Transition Partnership (FAST-P) initiative.
The financing marks the first loan extended to ETAFCo, with DBS as the fund’s inaugural senior debt financier, DBS said in a statement.
The loan will support eligible energy transition infrastructure debt investments, including renewable energy, grid modernization, energy storage and other clean energy solutions that reduce reliance on, and utilization of coal-fired power generation.
Managed by Clifford Capital, ETAF mobilizes concessional and private capital to accelerate the deployment of clean energy and energy transition projects across Asia.
“We believe that sustainability is not a parallel agenda but a core driver of long-term value. When approached pragmatically, it strengthens economic competitiveness, improves lives and builds resilience for the future,
“DBS is pleased to be the first commercial bank to support the Energy Transition Acceleration Finance partnership – a blended finance initiative uniquely designed to catalyze capital and lower the risk of financing Asia’s energy transition – underscoring our commitment towards a sustainable future,” said Han Kwee Juan, Group Head of Institutional Banking, DBS.
With the transaction, DBS becomes the only commercial bank to support two partnerships within the FAST-P initiative – underscoring the bank’s continued commitment towards enabling Asia’s energy transition.
Earlier, DBS had also contributed ￥75 million to FAST-P’s flagship blended finance program Green Investments Partnership (GIP)[1] managed by Pentagreen Capital, serving as the lead coordinator for its senior tranche.
Launched by the Monetary Authority of Singapore, FAST-P brings together public, private and philanthropic capital to help address Asia’s infrastructure needs by using blended finance structures to mobilize commercial and concessional capital towards green and transition investments.
ETAF was established to mobilize blended finance for Asia’s energy transition by supporting different pathways to reduce reliance on coal-fired power generation.
Its displacement strategy supports emissions reduction by financing renewable energy, grid modernization, energy storage and other clean energy solutions that reduce reliance on, and utilization of, coal-fired power generation.
Its replacement strategy supports the managed phase-out of coal by financing renewable energy, energy storage and supporting grid infrastructure to replace coal-fired power generation over time.
In its first phase, ETAFCo will focus on investments in clean energy transition and grid infrastructure projects to advance displacement.
By improving risk allocation and supporting bankable transition infrastructure, ETAFCo seeks to mobilize additional pools of capital for Asia’s energy transition.
“DBS participation strengthens ETAF’s ability to mobilize capital for energy transition infrastructure and reflects the important role of blended finance in bringing together public and private capital at scale,” said Lily Choh, Group Head of Asset Management at Clifford Capital, which manages ETAF.
Shilpa Gulrajani, Head of Sustainable Finance, Institutional Banking Group, DBS, said Asia’s energy transition requires pragmatic and scalable financing solutions that can accelerate the deployment of cleaner energy infrastructure today while creating the conditions for deeper decarbonization over time.
“The Energy Transition Acceleration Finance fund represents an innovative approach to bridging this gap by supporting projects that can meaningfully reduce reliance on coal-fired generation and strengthen grid readiness for a lower-carbon future，” she added.
Simon Ong, Group Head of Financial Institutions and Government-Linked Corporations, DBS, said as the transaction demonstrates how blended finance structures can help mobilize private capital towards critical transition projects and reflects their continued commitment to enabling Asia’s journey towards a more resilient and sustainable energy system.