Index

AADB, clean energy financing challenges

high capital cost and maturity mismatch,284–285

high risks and low risk-adjusted return, 285lack of bankable projects, 285–286unfavourable regulatory frameworks for

clean energy investment, 286ADB’s clean energy investment See also

ADB’s clean energy investment,recommendations

clean energy finance, 280Clean Energy Financing Partnership

Facility (CEFPF), 282t, 284Climate Change Fund (CCF), 281tClimate Investment Funds (CIF), 281tFuture Carbon Fund (FCF), 282tGlobal Change Fund (GCF), 283tGlobal Environment Facility (GEF),

281tJapan Fund for the Joint Crediting

Mechanism, 282tclimate finance

and clean energy investment targets,278, 279f

by sector, 280f2011–2016, 280f

and its impact, 279–280ADB’s clean energy investment,

recommendationsdeveloping bankable project pipelines, 314exploring new mechanisms to address

fundamental issues of cost and risks,315

extended support to PPP projects

assessing performance of PPP projects,313–314

using diverse financial instruments tosupport PPP projects, 313

maximizing flexibility in utilizing publicfinancial instruments, 311growing green bond/climate bonds,

312–313increasing use of equity instrument, 311tailoring de-risk instruments and

maximizing flexibility, 312tailoring financing structure to needs of

projects, 310aggregation financing model for small

scale project, 311blending of different financing

mechanisms and instrument, 310using public finance as finance facilitating

tool, 308–309demonstrating additional effect of public

finance, 309–310establishing clean energy financing

platform, 309investing in public-private equity fund,

309ASEAN context, policy recommendations

suitable for, 207fglobal linkage of individual banks, 209leading role of governments, 208–209leapfrog by cutting-edge technologies,

209–210policy recommendations, 207recognition of ‘low-carbon’, 208

ASEAN Economic Community (AEC), 146,398

Note: Page numbers followed by b, f and t indicate boxes, figures and tables, respectively

© Springer Nature Singapore Pte Ltd. 2018V. Anbumozhi et al. (eds.), Financing for Low-carbon Energy Transition,https://doi.org/10.1007/978-981-10-8582-6

423

ASEAN Economic Community (AEC) (cont.)approved foreign investments by countries,178tcurrency exchange, 179–180economic and management tools to support

businessdemand outstrips financing, 176finviting source of fund from foreign

investment, 176international financial sources, 177investment cooperation and incentives, 179public-private dialogue, 181public-private partnership legislations, 178reduction of corporate income tax, 178–179seamless transportation systems and single

standards, 180training and capacity building, 181unbalance trade volume, 181understanding investment environment and

business culture, 180–181ASEAN integration, 362 See also Quality

infrastructure initiativequality infrastructure for, 362t

ASEAN member states (AMS), 115, 142ability to finance EE investments, 127, 128tand NDC targets, 122–123t

ASEAN Plan of Action for EnergyCooperation (APAEC), 420

investments in, 117Asian Bond Markets Initiative (ABMI), 229Asian Development Bank (ADB), 46, 70,

153–154ADB Institute (ADBI), 153clean energy (CE), 46financial instruments available, 287,

289–290co-financing for private sector, 290fto leverage private finance, 288–298tprivate financing by financial

instrument, 289ffinancing for private sector, 291–292

clean energy investment share byoperations, 292f

financing sources, 291finnovate use of traditional financial

instruments, 301employing PPP to boost private

participation, 304–305innovative use of credit enhancement

products for climate/green bonds,303, 304

investment in private equity and venturecapital fund dedicated to cleanenergy projects, 302–303

single loan for multiple projects,301–302

issues related to financing, 308practice on leveraging private finance, 290

Country Operations Business Plans(COBP), 291

Country Partnership Strategies (CPS),291

integrating clean energy and privateparticipation, 290–291

providing concessional resources, 295, 299effectiveness of concessional resource

for leveraging private finance, 301key trust funds, 296–298tprinciple of using concessional

resources for private projects,299–300

priority of concessional financialassistance by trust funds, 299

role in leveraging private financeclean energy financing challenges,

284–286 See also ADB, cleanenergy financing challenges

for clean energy investment, 286–287strengths in mobilizing private finance, 287support to create enabling conditions for

private clean energy investment, 306assisting in clean energy strategy

development and planning, 306–307developing knowledge products and

sharing of knowledge andexperience, 307

supporting capacity building for projectdevelopment, 307

supporting reform on critical issues ofclean energy sector, 306

transport infrastructure, South Asia andSoutheast Asia, 153–154

using concessional resources to leverage,292–293attracting private sector participation in

sovereign projects, 293direct sovereign financing for clean

energy project, 293–294sovereign financing for green financing

platform, 294Association of South East Asian Nations

(ASEAN), 146, 398carbon emission situation, 147–148existing problems, 146

freight transportation, 146transport route

Asian Development Bank (ADB),153–154

424 Index

Asian Infrastructure Investment Bank(AIIB), 154–155

Japan External Trade Organization(JETRO), 148, 152

Transport Strategic Plan for 2016–2025,147Kuala Lumpur Transport Strategic Plan,

147

BBangladesh, 56, 68

ADB assistance to boost public-privateinfrastructure in, 305306b

Banks and bond markets, in Asia, 6–8in China, 7

Agriculture Bank of China (ABC), 8in India, 7–8

Securities and Exchange Board of India(SEBI), 8

in Indonesia, 7in Japan, 7in Malaysia, 7

Green Technology Financing Scheme, 8size of assets, 7t

Bio jet fuel, 368, 369Bio-Carbon Fund (BCF), 331Biomass/bioenergy, 342

cleantech, 222–223energy investment in, 24f, 25

per sector, 27ftotal investments in, 27f

future investment needs, 20, 31net additional in-year capacity, 21

Bloomberg New Energy Finance, 46, 59asset finance, 60clean energy (CE), 46mergers and acquisitions (M&A), 60public markets, 60venture capital and private equity (VC/PE),

60

CCalifornia Public Employees’ Pension Fund

(CalPERS), 47clean energy (CE), 47

Capital market and energy transitionAsia’s capital market situation, 225–227

capital markets development index, 226tmajor sources of capital, 225tsizes of local-currency bond markets to

GDP, 227tAsian Bond Markets Initiative (ABMI), 229green investment situation in, 227–229

Asian market for green bond, 228f

finance, 227global renewable energy sector bonds

by region, 228fmarket capitalisation, 229

international financial support, 236–237Carbon Partnership Facility (CPF), 236Global Environment Facility

(GEF) projects, 236International Finance Corporation

(IFC), 236Strategic Climate Fund (SCF), 236

main barriers to increase financingcore technical risk, 231expertise within investment industry,

232insufficient market infrastructure,

229–230lack of ESG (environmental, social and

governance) capability, 232lack of right pricing signal, 230–231regulatory barriers, 230weak investor capability, 231–232

sustainable investment market in Asia, 230tCapital market and energy transition,

recommendationsbuilding blocks for sustaining long-term

capital market growth, 232–234, 233fencouraging financial products and services

innovations, 234improved ASEAN equity markets

collaboration, 236promoting market transparency, 234–235setting up “guarantee mechanism”,

235–236Carbon capture and storage

(CCS) technologies, 90, 360CO2

capture technologies, 95tgeological storage of, 91–92, 93fglobal storage portfolio assessment, 96tocean storage, 92–93recovery approach, 93–94, 94trecovery of, 90–91transportation of, 91

challenges for, 105diverse barriers for CCSTs deployment,

105–107commercialisation programme, 112countermeasures to address higher

operational costs, 102critical financial support, 99–102current status and future possibilities,

97–98Green Climate Fund (GCF), 113

Index 425

Carbon capture and storage (CCS) technologies(cont.)international recognition of, 94tlarge-scale projects, limited investment for,

99lesson learnt, 107–108

increase of social acceptability, 109technical barriers for project

development and implementations,110

trends of investment towards CCSprojects, 110

trends of mobilization and distributionon CCSTs, 108–109

understanding advantages of, 109–110policy and regulatory framework for,

102–103CCS-targeted policy incentives, 104climate-based legislations, 103–104

project approachesbottom-up approach, 95, 97top-down approach, 95

strategies for, 111demonstration of large scale CCS

technologies, 111funding/financing schemes, 112–113institutional development, 111social acceptance, 112

support forfluctuating policy and financial

supports, 97policy certainty and management, 97

Carbon Club, 381–382aim of, 381expected benefit of, 382potential clubs, 383tSWOT analysis, 382f

Carbon dioxide (CO2)CCS technologies

capture technologies, 95tgeological storage of, 91–92, 93fglobal storage portfolio assessment, 96tocean storage, 92–93recovery approach, 93–94, 94trecovery of, 90–91transportation of, 91

economic damage from temperatureincrease, 89f, 90

global CO2 emissions by industry and fuel,86t

large stationary sources of CO2 emissions,86t

types and challenges of innovativetechnologies for reduction, 87t

Carbon finance, 192 See also Low-carbonfinance of bank

Carbon Fund for Europe (CFE), 331Carbon Initiatives for Development (Ci-Dev),

331Carbon leakage, 252–525

cost of meeting environmental objectives,253

economy-wide models, 253“integrated” measures of assistance, 254leakage assessment studies, 254fpartial equilibrium studies, 253

Carbon Partnership Facility (CPF), 331Carbon price mechanism

adoption of, 393encouraging shadow price, 394financial initiatives, 393market base approach to support R&D, 394MRV

simplified MRV, 395SWOT of, 394f

reform of incentive mechanisms, 393Carbon pricing

in Asia-Pacific region, 260–261carbon pricing policies, 261–262

costs and benefits estimates, 263Australian Carbon Tax, 265–267Singapore Carbon Tax, 267–270TIAM-Grantham Model, 263–265

costs and benefits of, 250–251global model estimates of abatement

costs and benefits, 251–252issues of carbon leakage, 252–255

existing schemes, 248–250carbon allowance, 249growing engagement by private sector,

250Market Stability Reserve

(MSR) scheme, 249recent developments, 248

price ranges in initiatives, 249tCarbon pricing policies, 261–262

in Australia, 261in China, 261in Japan, 261–262in New Zealand, 262in Republic of Korea, 262in Singapore, 262

Carbon tax, 244, 375–377 See alsoMarket-based instruments (MBIs)

versus cap-and-trade, 246tin development of RE projects, 351–353and ex-post evaluation of incentives, 376tand financial flexibility, 247

426 Index

international cooperation, 257–260border carbon adjustment

(BCA) policies, 258carbon emission trading hubs, 270International Emissions Trading

(IET) system, 259Kyoto Protocol, 258leveraging private finance, 258measuring, reporting and verification

(MRV) systems, 258, 259Paris Agreement, 258

“Lange-Hayek” debates, 244monitoring, reporting, and verification

(MRV) systems, 245price volatility, 245, 246raising revenue, 245revenue-neutral carbon taxes, 255–257

“double dividend”, 256pre-existing energy-related regulations,

257social cost of carbon (SCC), 256

Carbon Trust, 19analysis, 27f, 28f, 30f, 31f, 32f, 34f, 35f,

38f, 40f, 41ffactors that made energy sectors, 217

ChinaAgriculture Bank of China (ABC), 8coal fired power, 49installer of solar photovoltaics, 47investments

in energy efficiency, 26ffuture flows of, 26–27per sector, 27f

renewable energy and energy efficiency, 22,23, 27f, 186private potential, 57trends, 32–33

Shanghai Stock Exchange (SSE), 7share of investments

in energy efficiency, 25fin renewable energy, 24f

supplier of CDM credits, 379Clean coal storage technologies, 87 See also

Carbon capture and storage(CCS) technologies

comment by IEA, 88, 90commercialisation programme in UK, 112b

Clean Coal Technologies (CCTs), 88, 91, 112Clean energy (CE), 46

Clean Energy Program, 50imbalances in private investment in, 49–50

high efficiency low emission (HELE)plants, 49

Clean energy investment

clean energy finance, ADB, 280Clean Energy Financing Partnership

Facility (CEFPF), 282t, 284Climate Change Fund (CCF), 281tClimate Investment Funds (CIF), 281tFuture Carbon Fund (FCF), 282tGlobal Change Fund (GCF), 283tGlobal Environment Facility (GEF),

281tJapan Fund for the Joint Crediting

Mechanism, 282tand its impact, 279–280

Clean Technology Fund (CTF), 332Cleaner coal technology, 46

in China, 49Cleantech, 215, 222–223Climate Change Master Plan, Thailand,

169–170efficiency improvement in passenger and

freight transport, 170high efficiency and low-carbon transport

infrastructure development, 170travel demand management, 170

Climate finance, 113, 237, 257 See also ADB’sclean energy investment

and clean energy investment targets, 278,279f

critical goal of, 215by sector, 280f2011–2016, 280f

Climate Fund, 113bCoal-fired power generation

current and future use of, 85–88Blue Map Scenario, 87CCS technologies, 87Energy Technology Perspectives 2012,

87global CO2 emissions by industry and

fuel, 86tlarge stationary sources of CO2

emissions, 86timportance of coal in economic

development, 84power plants, vintage and types of, 370t

Combined cycle gas turbines (CCGT), 241Current climate finance, 320, 322

Climate Policy Initiative, 320global climate finance landscape, 321f

DDanish Carbon Fund (DCF), 331Defensive banking, 200De-risking tools

guarantees, 73–74

Index 427

De-risking tools (cont.)hedging, 74insurance, 73–74multilateral development banks (MDBs),

74for private investment, 410–412

De-risking, carbon financingattractive de-risking tools for private

investment, 410–412Green Climate Fund (GCF), 411Japan Bank for International

Cooperation (JBIC), 412Multilateral Insurance Guarantee

Agency (MIGA), 411de-risking policy instruments, 410fsolutions to challenges, 420

close coordination, 420enhancing public governance, 421improving financial market policy, 420

Dynamic Integrated Climate-Economy (DICE)model, 251–252

EEast Asia Summit (EAS) countries, 398Emission trading, 377–378

Carbon Club, 381–382 See also CarbonClub

emerging carbon markets, 379–380, 380tJCM (joint credit mechanism) for, 381t

Paris AgreementArticle 6, 378–379market provision of, 379t

Emission trading scheme (ETS), 239End-use energy efficiency (EE), 46

policies in Asia, 49Energy demand, in Asia, 338–339

fossil fuelcoal, 339–340, 340tnatural gas, 340–341nuclear energy, 340oil, 340

renewable energy resources, 341bioenergy, 342geothermal energy, 341hydropower, 341regional consumption, 343fsolar energy, 341–342wind energy, 342

Energy efficiency (EE), 19breakdown of, 31–32carbon price in the world, 375tcarbon regulation options, 374tcarbon tax, 375–377for China, 22

costs, 22current flows of investment in, 20, 25–26digital technology for, 369–370

barriers, 370emission trading, 377–378future flows of investment in, 21–22for India, 22versus renewable energy, 29–30retirement of old facilities, 370savings, 22

Energy efficiency (EE) investments, 116ability of AMS to finance, 127, 128tin ASEAN, 125–126barriers to, 128–129

overcoming barriers and acceleratinginvestments, 129–130

channelling investments to industry, 129economic complexity index, 126telements for funding, 126–127financing institutions, 130tfunding approach, 130tinvestment potential for industrial energy

savings, 125tloan amount, 130tservicing sectors, 130t

Energy investment situation, existing, 212–216capital intensity, 213fcumulative global energy investment

by end-use sector, 214tby type, 214t

financing sources, 213fand main sources of financing, 215t

in different stages of technologydevelopment, 216f

global secondary market acquisitiontransactions, 216f

shares of total global average annualinvestment, 213f

technology risk, 213fEnergy investment

current flows in, 22–23energy efficiency, 25–26

by country, 27frenewable energy, 23–25

by country, 27fEnergy policy/policy support

capital expenditure (CAPEX) subsidies,390

feed in tariff (FiT), 24, 70, 75, 102, 257,285, 286, 312, 390, 410t

gasoline taxes, 257Global Energy Transfer Feed-in Tariff

(GET FiT), 330Green Certificate, 390

428 Index

policy incentives for CCS, 104trenewable portfolio schemes (RPS), 257,

390, 410Ttax credit program, 104t, 410ttax incentives, 390

Energy transition and capital marketAsia’s capital market situation, 225–227

capital markets development index, 226tmajor sources of capital, 225tsizes of local-currency bond markets to

GDP, 227tAsian Bond Markets Initiative (ABMI), 229green investment situation in, 227–229

Asian market for green bond, 228ffinance, 227global renewable energy sector bonds

by region, 228fmarket capitalisation, 229

international financial support, 236–237Carbon Partnership Facility (CPF), 236Global Environment Facility

(GEF) projects, 236International Finance Corporation

(IFC), 236Strategic Climate Fund (SCF), 236

main barriers to increase financingcore technical risk, 231expertise within the investment

industry, 232insufficient market infrastructure,

229–230lack of ESG (environmental, social and

governance) capability, 232lack of right pricing signal, 230–231regulatory barriers, 230weak investor capability, 231–232

sustainable investment market in Asia, 230tEnergy transition and capital market,

recommendationsbuilding blocks for sustaining long-term

capital market growth, 232–234, 233fencouraging financial products and services

innovations, 234improved ASEAN equity markets

collaboration, 236promoting market transparency, 234–235setting up “guarantee mechanism”,

235–236Environment risk management, 194–195

banks, levels for, 196asset level, 196client level, 196portfolio level, 197

environmental management system ofbanks, 195elements, 196f

green banking target, 196steps in, 197

categorization management underequator principles, 197–198

client level environmental impactassessment, 197

escalations, 198high-level screen, 197track and review, 198

FFeed-in tariffs (FITs), 257Financial markets

financing barriers for projectshigh and uncertain project development

costs, 71–72lack of equity finance, 72lack of long-term financing, 70–71lack of project financing, 71small scale of projects, 72

financing renewable energy investments,German, 74creating market for renewable energy,

75financing renewable investments from

public and private sources, 76–77lessons learnt, 77reforming high-cost approach, 75–76Renewable Energy Sources Act, 75

financing renewable energy investments,Indonesia, 77–78financial barriers to investments, 78–79non-financial barriers to investments, 79outlook for, 79–80

funding sources for projectscommercial sources, 69–70public financial instruments, 67–69stages of public financing mechanisms,

69fpolicy conclusions

key role of domestic financial sector,80–81

stable policy framework, 80standardization of projects, 81

risks of projects, 73mitigating risks and mobilizing private

capital, 73–74Financial technology (fintech), 200–201

attributes to be implemented, 200–201basic features of, 200innovative fintech, 201

Index 429

Financing barriers, for CCSTs deployment, 105economic aspect, 105–107legal aspect, 105social aspect, 107

Forest Carbon Partnership Facility (FCPF), 331Forest Investment Program (FIP), 332Fossil fuel

CO2 emission of, 369tCCS for, 366–367coal, 339

top coal producers, 340tenergy efficiency of, 373fossil fuel investments, 337MRV and fossil fuel use, 384–385natural gas, 340–341nuclear energy, 340oil, 340

“Fossil-fuel civilization”, 240Fossil-fuel focused businesses, 50Fuel sources

power generation by, 89fprimary energy demands, 89f

GGeothermal energy, 341

energy investment in, 24f, 25per sector, 27ftotal investments in, 27f

future investment needs, 20, 31net additional in-year capacity, 21

German, financing renewable energyinvestments, 74

creating market for renewable energy, 75Renewable Energy Sources Act, 75

financing renewable investments frompublic and private sources, 76–77

lessons learnt, 77reforming high-cost approach, 75–76

Government funding programmes, designing,100b

external budget pressures, 102ffocus on full-chain projects, 101bfuture infrastructure costs, 101–102black of flexibility in project milestones,

101blimited or no operational support, 101b

Green capital market See also Low-carbonenergy transitions

public equity market and low-carbonenergy transition, 218–219clean energy index, 221global secondary market acquisition

transactions, 219master limited partnerships, 220

over-the-counter (OTC), 219public markets investment by sector,

219tsecuritization, 220Yieldcos, 220–221

Green certification in Republic of Korea,193–194 See also Public privatepartnership

financing for green firms, 194fpositive impact investment, 198–199

principles for, 199sustainable development goals (SDGs),

199Green Climate Fund (GCF), 411Green energy projects, spill over effects,

343–344of electricity supply, 344f

Green finance, 191 See also Low-carbonfinance of bank

model for green finance of banks, 202fprivate financing to, 193

“Green Revolution”, 59Greenhouse gas (GHG) emissions, 2, 18, 65,

147–148, 317, 336carbon dioxide (CO2), 18climate change and, 190coal consumption, 339“command-and-control” regulations, 336emission reductions, 46global CO2 emissions by regions, 47f“greenhouse effect”, 336Paris Agreement on, 65pricing, 273sources of, 317

G20 Green Finance Study, 420

HHokkaido Green Fund, 345Hometown investment trust (HIT) funds,

345–347, 346fcons of, 349in development of RE projects, 351–353Financial Instruments and Exchange Act

(FIEA), 346Financial Services Agency (FSA), 346financing risky capital, 355fostering, 354Hokkaido Green Fund, 345pros of, 347–349

constrains for GTFS in Malaysia, 348revitalization of old hydropower plant, 346tax revenues to, 356theoretical model for implementation of,

349–351

430 Index

Hydropower, 23, 42, 341China’s investment in, 33energy investment in, 24f

per sector, 27ftotal investments in, 27f

future investment needs, 20, 30net additional in-year capacity, 21

IIndia

in clinker production, 126green bond by YES Bank, 7investments in energy efficiency, 26fpolicy direction, 140renewable energy and energy efficiency, 22,

186investment per sector, 27ftotal investments in, 27ftrends, 30, 32

share of investmentsin energy efficiency, 25fin renewable energy, 24f

Indonesiacoal for electricity production, 77–78,

79–80energy policy

Feed in Tariff (FiT), 24geothermal opportunities, 26Indonesian Stock Exchange (IDX), 7KEHATI, 7renewable energy and energy efficiency

investment per sector, 27ftotal investments in, 27ftrends, 46

Indonesia Muara Laboh Geothermal Power,300b

Indonesia, financing renewable energyinvestments, 77–78

financial barriers to investments, 78–79non-financial barriers to investments, 79outlook for, 79–80

Industrial energy efficiency, 115 See alsoEnergy efficiency (EE) investments

best available technologies (EE-BAT),116–117

current policies driving EE, 130, 132–135issues, 135–136

defining, 116–117estimating EE potential, 117

industrial energy savings potential, 124trisks to assumptions, 124–125in various industrial sectors, 118–121t

governmental factors, 136industrial factors, 136

LED versus incandescent bulb, 136–137Haitz’s law, 136

policy interventions, 138–139capacity building policies for promoting

low-carbon transition, 141–142cross-country policy lessons, 143policy approaches for attracting

investment, 140–141regional cooperation mechanisms, 143regional policies, 142regulatory approaches to drive

low-carbon technologies, 139–140Thailand Energy Conservation Fund

(ENCON), 137–138InfrastructureSee also Sustainable

infrastructure developmenthigh efficiency and low-carbon transport

infrastructure development, 170infrastructure projects involving private

sector participation, 149–151ttransport infrastructure, South Asia and

Southeast Asia, 153–154Integrated Assessment Models (IAMs), 251

costs and benefits of, 252Intergovernmental Panel on Climate Change

(IPCC), 85, 92, 252CCS deployment and, 97internationally accepted system, MRV, 371

International Bank for Reconstruction (IBRD),322, 326, 329, 333

International Energy Agency (IEA), 18, 22, 33,49, 66, 85

International Finance Corporation (IFC), 236,322, 326, 333

International financial institutions (IFIs), 318,326

leveraging instruments for climate financedirect leveraging instruments, 326, 327t,

329–331indirect leveraging instruments,

327–328t, 331–332specific financial instruments, 328t

International Monetary Fund (IMF), 286, 318,332

estimating investment needs, 398–399conceptual framework, 399fSocially Responsible Investing (SRI),

399Investment

clean energy finance, ADB, 280Clean Energy Financing Partnership

Facility (CEFPF), 282t, 284Climate Change Fund (CCF), 281tClimate Investment Funds (CIF), 281t

Index 431

Future Carbon Fund (FCF), 282tGlobal Change Fund (GCF), 283tGlobal Environment Facility (GEF),

281tand its impact, 279–280Japan Fund for the Joint Crediting

Mechanism, 282tinvestment required for, 402ftypes of investment needs and, 400

estimated infrastructure investment,401t

Italian Carbon Fund (ICF), 331

JJapan Bank for International Cooperation

(JBIC), 412Japan External Trade Organization (JETRO),

148–149infrastructure projects involving private

sector participation, 149–151tpriority routes of logistic and transportation,

152–153, 152f

KKorea, case study, 202–203

different attitude of banks under differentpresidents, 203–205green financial products in Kookmin

Bank, 204tinconsistency of government policies,

205fvision and strategy of green growth

committee, 203finterview with a green finance expert, 205

attitude of top-management, 206changes in green growth policy, 207differences in performance between

corporations and banks, 205environmental risks from businesses,

206experience in green finance, 207fintech and banks, 206about positive impact finance, 206role of Korean government, 206

Kuala Lumpur Transport Strategic Plan(KLTSP), 147

strategic goals of, 148tKyoto Protocol, 331

LLeveraging instruments, 327t

IFI leveraging instruments, 327tdirect leveraging instruments, 326, 327t,

329–331

indirect leveraging instruments,327–328t, 331–332

specific financial instruments, 328tLong List, 361, 362Low-carbon economic development, 317

key challenges, 318sustainable development goals (SDGs), 318

Low-carbon energy productionrole of capital market for, 216–218

energy security, 217environmental pressures, 217new markets, 217regulatory drivers, 217technology readiness, 217

share of different energy sector inclimate-aligned bond market, 218f

Low-carbon energy system (LCES), 46, 52, 59transition into, 47

Low-carbon energy transition, investmentflows needed for

estimating investment needs, 398–399conceptual framework, 399fSocially Responsible Investing (SRI),

399investment required for, 402fprivate capital flows and investment trends,

402–404foreign direct investment (FDI) flows,

403, 403fprivate capital inflows, 404fprivate capital outflows, 405f

types of investment needs and, 400estimated infrastructure investment,

401tLow-carbon energy transitions See also Green

capital marketcatalysing regional solutions, 412–413

best regional regulations for, 416–417,417t

extent of fossil fuel subsidies, 414fhigh quality infrastructure program,

417–418, 419fregional financial performance warranty

program, 414–416regional low-carbon transition fund,

413–414climate or green bond market and, 221–222

share of different energy productiontechnology, 222f

financial products in banks, 191–192institutional investors and the international

capital markets, 224–225main channels of private financing of,

408–409

432 Index

need for, 190overcoming barriers to investment in,

406–407financing for development, 407key issues, 407sustainable development goals (SDG),

407public equity market and, 218–219role of banks for, 190–191

green growth, 190role of PPP to support banks’ green loans,

192–193role of society, 190understanding economic and financial

integration, 405–406Regional Economic Cooperation

Partnership (RCEP), 406Transatlantic Trade and Investment

Partnership (TTIP), 406Trans-Pacific Partnership (TPP), 406

VC/PE and, 222–223new investment and growth in

renewable energy, 224tnew investment in renewable energy by

sector, 223fLow-carbon finance of bank, 190–191

ASEAN context, policy recommendationssuitable for, 207fglobal linkage of individual banks, 209leading role of governments, 208–209leapfrog by cutting-edge technologies,

209–210policy recommendations, 207recognition of ‘low-carbon’, 208

attractive de-risking tools for privateinvestment, 410–412Green Climate Fund (GCF), 411Japan Bank for International

Cooperation (JBIC), 412Multilateral Insurance Guarantee

Agency (MIGA), 411de-risking policy instruments, 410ffinancial products in banks, 191–192risks associated with, 409–410solutions to challenges, 420

close coordination, 420enhancing public governance, 421improving financial market policy, 420

Low-carbon financing, dynamics ofin Asia, 3–6

investment sources, 5fsector wide investments, 4t

limitations to scaling up private finance,8–9

capital-intensive business model, 9downward pressure, 8finance subsidies, 9

mapping risks and solutions, 9–11financing barriers, 9–10innovative financing solutions, 11

“Low-carbon jet fuel”, 369Low-carbon technology, 8

deployment, 399, 416formulation of finance warranty program,

11Malaysian financial institutions, 347market challenges, 413, 415swings in commodity prices, 9

Low-carbon transition, financing needsin Asia, 2–3

ASEAN Economic Community(AEC) Blue Print, 2

Nationally Determined Contributions(NDCs), 2

Paris agreement and NDC targets, 3tsize of assets, 7t

role of Asian banks and bonds in, 6–8Equator Principles Financial

Institutions, 6finance innovations, 7sustainable stock exchanges (SSE), 6

mapping risks and solutions, 9–11financing barriers, 9–10innovative financing solutions, 11

Low-carbon transition, infrastructure forCO2 budget, 360fgame change in carbon constrained world,

359–360indirect reduction effect, 373mass transit, 373and MRV, 371–372

combined with carbon pricing, 374types of infrastructure, 372, 373t

Low-carbon transitions, characterizing,240–242

de-carbonization of large economies, 242“fossil-fuel civilization”, 240Paris Agreement, 241water, wind and solar (WWS), 242

MMalaysia

Green Technology Financing Scheme, 8renewable energy and energy efficiency

investment per sector, 27ftotal investments in, 27ftrends, 40–41

Marine energy, 46

Index 433

future investment needs, 31Market-based instruments (MBIs), 239, 240

cap-and-trade system, 244–247, 246tcarbon tax, 244–247, 246tversus discretionary instruments, 242–247

versus command and controlinstruments, 243f

government regulation, 243using market signals, 244

Measurement, Reporting and Verification(MRV)

combined with carbon pricing, 374low-carbon infrastructure and, 371–372

types of, 372, 373tprivate finance and, 386

disclosure of carbon exposure andscenario analysis, 388

Green Bond and, 387–388, 387frisk management, 389f

and public finance, 383–384fossil fuel use, 384–385JBIC (Japan Bank for International

Cooperation)’s finance and, 386tJ-MRV guideline, 384tmass transit, 385

research and development, 391–392simplified MRV, 395

Multi-lateral development banks (MDBs), 318,319t

climate finance of, 322, 323fdistribution of, 323fleveraging instruments, 326 See also

Leveraging instrumentsdirect leveraging instruments, 326, 327t,

329–331indirect leveraging instruments,

327–328t, 331–332specific financial instruments, 328t

leveraging of climate finance bycurrent status of leveraging, 324–326leveraged climate finance (or

co-finance) of, 325fmix of leveraged climate finance of,

325fleveraging private finance, 319shares in total climate finance, 324f

Multilateral Investment Guarantee Agency(MIGA), 329, 333, 411

Myanmarrenewable energy and energy efficiency,

154investment per sector, 27ftotal investments in, 27f

NNationally Determined Contributions (NDCs),

2, 5, 8, 18, 22, 32, 39, 278, 363, 398See also Low-carbon finance of bank

adopted by selected Asian economies, 3temission gap between 2 °C target and NDC

target, 364ffuture flows of investment, 26

Nationally Determined Contribution(NDC) targets, 115 See also China

for ASEAN member states, 115for energy savings potential, 117methodology, 116potential for regional financing, 127

and energy savings, efficiency and intensityreduction target, 122–123t

industrial energy savings potential, 124tInternational Emissions Trading

(IET) system, 259perform—achieve—trade (PAT) analysis,

134TIAM-Grantham assessment, 263in US, 50

Netherlands CDM Facility (N-CDM), 331Netherlands European Carbon Facility

(NECF), 331New Climate Economy, 318Non-OECD countries, 88, 248

Asian countries, 46CO2 emissions by regions, 47fTIAM-Grantham model, 257

mitigation projects in, 257

OOffensive banking, 200

PParis Agreement, 3t, 65, 250, 277, 332, 359,

398Business As Usual (BAU) investments, 399“fuel cost savings”, 251Nationally Determined Contributions

(NDC), 398, 399cost of meeting targets, 402f

Partnership for Market Readiness (PMR), 331Philippines, 141

renewable energy and energy efficiencyinvestment per sector, 27ftotal investments in, 27ftrends, 36–37

Pilot Auction Facility for Methane (PAF), 331Pilot Program for Climate Resilience (PPCR),

332

434 Index

Preventive banking, 200Private capital, 6

ADB funding, 287, 293, 301, 302approaches to mobilize, 73–74domestic private capital market, 176“first loss” position, 74in free market, 244investment trends, 402–405

inflows, 404foutflows, 405f

leveraging, 308, 309, 310, 311, 312, 314to mobilize, 234, 278, 416rationale for allocation, 10fsolutions for challenges, 420

Private capital, and investment trends, 402–404foreign direct investment (FDI) flows, 403,

403fprivate capital inflows, 404fprivate capital outflows, 405f

Private finance, Asian Development Bank(ADB)

financial instruments available, 287,289–290co-financing for private sector, 290fto leverage private finance, 288–298tprivate financing by financial

instrument, 289ffinancing for private sector, 291–292

clean energy investment share byoperations, 292f

financing sources, 291fpractice on leveraging private finance, 290

Country Operations Business Plans(COBP), 291

Country Partnership Strategies (CPS),291

integrating clean energy and privateparticipation, 290–291

role in leveraging private financeclean energy financing challenges,

284–286 See also ADB, cleanenergy financing challenges

for clean energy investment, 286–287strengths in mobilizing private finance, 287

Prototype Carbon Fund (PCF), 331Public economics

business for the second-generation biofuels,186

developing energy efficient transportsystems, 183–184

development of aviation biofuels, 185implementation of multimodal transport,

182–183

integration of green logistic strategies andservices in transport, 184–185

market openings, 187modernization of air traffic management,

185reducing energy and carbon intensity of

transport, 183supporting development of electrical and

energy efficient vehicles, 185–186sustainable energy source and technologies,

related to transport, 182green transport and logistics, 182low-carbon electricity generation, 182smart cities and liveable city, 182

systematic tool, 186–187geographic information system (GIS),

186intelligent transport system program

(ITS), 186Public financial instruments, and ADB

developing bankable project pipelines, 314exploring new mechanisms to address

fundamental issues of cost and risks,315

extended support to PPP projectsassessing performance of PPP projects,

313–314using diverse financial instruments to

support PPP projects, 313maximizing flexibility in utilizing public

financial instruments, 311growing green bond/climate bonds,

312–313increasing use of equity instrument, 311tailoring de-risk instruments and

maximizing flexibility, 312tailoring financing structure to needs of

projects, 310aggregation financing model for small

scale project, 311blending of different financing

mechanisms and instrument, 310using public finance as finance facilitating

tool, 308–309demonstrating additional effect of public

finance, 309–310establishing clean energy financing

platform, 309investing in public-private equity fund,

309Public private partnership

green certification, 193–194functions of, 194f

to support banks’ green loans, 192–193

Index 435

QQuality infrastructure initiative, 360–361

energy sector, 361in Japan, 361tLong List, 362Performance Base Incentive, 363sustainable growth of ASEAN, 362technology innovation see Technology

innovation, quality initiativetransport sector, 361Ultra Super Critical (USC) Coal-Fired

Thermal Power Generation, 363

RRegional cooperation, 10f, 59, 416

network for CCS value chain, 367policy frameworks, 143

Renewable energy (RE)estimation of currents flows, 19

breakdown of, 30–31current flows of investment in, 20,

23–25future flows of investment in, 20–21versus energy efficiency, 29–30

reform of incentive for, 390fossil fuel, 390–391general, 390

Renewable energy (RE), development ofBasel capital requirements, 338carbon tax in, 351–353energy self-sufficiency, 336fossil fuel investments, 337HITs in, 351–353for mitigating climate warming issues,

354–355raising energy self-sufficiency and energy

security, 355resources, 341

bioenergy, 342geothermal energy, 341hydropower, 341regional consumption, 343fsolar energy, 341–342wind energy, 342

stable supply of risk capital to, 353–354Renewable energy (RE), imbalances in

within CE system, 48in electricity generation, 50investments, variations in, 48foffshore wind, 52policy support from governments, 59private investment in developed countries,

51RE potential and China, 57–58

through ‘blended finance’, 58venture capital (VC) and private equity

(PE) investment, 50Renewable energy private investment,

determinants of, 52–53data, 56econometric approach and estimation

results, 56–57maximum likelihood estimates, 57tregion-wise realized RE potential, 57tsoftware FRONTIER 4.1, 56

empirical modelling, 54–55profit, 53risks

low-carbon market risks, 54political and macroeconomic risks, 54

Renewable energy (RE), investments, 65financing barriers for projects

high and uncertain project developmentcosts, 71–72

lack of equity finance, 72lack of long-term financing, 70–71lack of project financing, 71small scale of projects, 72

funding sources for projectscommercial sources, 69–70public financial instruments, 67–69stages of public financing mechanisms,

69fglobal developments, 66–67global new investments, 67fInternational Energy Agency (IEA), 66policy conclusions

key role of domestic financial sector,80–81

stable policy framework, 80standardization of projects, 81

risks of projects, 73mitigating risks and mobilizing private

capital, 73–74Renewable portfolio schemes (RPS), 257

SScaling Up Renewable Energy Program

(SERP), 332Shaanxi Clean Energy Financing Platform

(SCEFP), 294–295bSocially Responsible Investing (SRI), 399Solar energy, 76, 223, 341–342

China’s investment in, 33cleantech, 222–223commercial primary energy, 240, 241energy investment in, 24f

per sector, 27f

436 Index

total investments in, 27ffuture investment needs, 20, 30net additional in-year capacity, 21

Southeast Asia, 22, 24investments in energy efficiency, 26f

per sector, 27ftotal investments in, 27f

share of investmentsin energy efficiency, 25fin renewable energy, 24f

Spanish Carbon Fund (SCF), 331Specific energy consumption (SEC), 116, 117

industrial energy savings potential, 124tpotential for energy savings, 117

in various industrial sectors, 118–121tSustainability investment strategies, 6 See also

Banks and bond markets, in Asiasize of assets, 7t

Sustainable banking, 200Sustainable Banking Network, 420Sustainable development See also Low-carbon

finance of bankand banking, 199–200

defensive banking, 200offensive banking, 200preventive banking, 200sustainable banking, 200

Sustainable infrastructure developmentbusiness for the second-generation biofuels,

186developing energy efficient transport

systems, 183–184development of aviation biofuels, 185implementation of multimodal transport,

182–183integration of green logistic strategies and

services in transport, 184–185market openings, 187modernization of air traffic management,

185reducing energy and carbon intensity of

transport, 183supporting development of electrical and

energy efficient vehicles, 185–186sustainable energy source and technologies,

related to transport, 182green transport and logistics, 182low-carbon electricity generation, 182smart cities and liveable city, 182

systematic tool, 186–187geographic information system (GIS),

186

intelligent transport system program(ITS), 186

Sustainable Stock Initiative, 420

TTechnology innovation, quality initiative

CCS for fossil fuel, 366–367energy storage for renewable energy,

364–365carbon emission factor of power grid,

366tcompression of technology option, 365t

gap from 2 °C target, 363–364and NDC target, 364f

low-carbon transport fuel, 368bio jet fuel, 369ground transport, cargo, 368ground transport, passenger, 368“low-carbon jet fuel”, 369maritime and aviation, 368options of, 368t

ThailandENCON fund, 129Energy Regulatory Commission (ERC), 40renewable energy and energy efficiency, 68

average annual investment need, 28finvestment per sector, 27ftotal investments in, 27ftrends, 39–40

situation of foreign investment in, 177Thailand Energy Conservation Fund

(ENCON), 137–138details of scheme, 138t

Thailand’s Integrated Energy Blueprint(TIEB), 39

Yellow and Pink monorail, 179Thailand, case study, 155

existing and situation of transportation, 155,156taverage freight cost, 157tpublic transport network by electric

trains, 158tratio of vehicle according to euro

standard, 158tvehicles stock registered in, 157t

Indonesia-Malaysia-Thailand GrowthTriangle, 155

opportunity for GHG reduction in transportsector, 174–175

policy and plan related to transportationdevelopmentcompletion target of rail systems, 163t

Index 437

Eleventh National Economic and SocialDevelopment Plan (2012–2016),158–159

National Transport Master Plan (2011–2020) and Investment Strategies(2015–2022), 160–164

public transport network, 163tregional connectivity, 159ftargets and benefits by 2020, 160Urgent Transport Action Plan (2016),

164Progress of Master Plan for Transport

(2015–2022), 164–165airports, 168budget of urgent transport action plan,

164tfreight transport, 168land transport, 165–166progress of infrastructure projects, 165tprojects planned, 166–167tSino-Thai Relations Under the Belt and

Road Initiative, 167–168Thailand-Japan railway cooperation,

168, 168ttransport related to energy and climate

changeClimate Change Master Plan, 169–170

See also Climate Change MasterPlan, Thailand

energy consumption in transport sector,173

Environmentally Sustainable TransportSystem Plan, 170, 171t

GHG emission from transport sector,173–174

related to climate change policy, 169related to energy policy, 172–173

See also Transport related energypolicy, Thailand

related to organization framework, 169Times Integrated Assessment Model

(TIAM-Grantham), 263–265

Tiwi and MakBan Geothermal Power GreenBonds Project, 303–304b

Transport related energy policy, Thailand, 172New 20-year Energy Efficiency

Development Plan, 17320-year Energy Efficiency Development

Plan (EEDP), 172–173

UUmbrella Carbon Facility (UCF), 331UNEP Finance initiative, 420United Nations Framework Convention on

Climate Change (UNFCCC), 169Thailand’s Nationally Appropriate

Mitigation Actions (NAMAs), 169

VVenture capital and private equity (VC/PE), 50,

53, 60, 216f, 223, 328tVietnam

in clean energy, 49renewable energy and energy efficiency

investment per sector, 27ftotal investments in, 27ftrends, 37–39

WWind energy, 342

China’s investment in, 33cleantech, 222–223commercial primary energy, 240, 241energy investment in, 24f

per sector, 27ftotal investments in, 27f

feed in tariff (FiT), 24in Germany, 74, 76, 77increase in US, 50

World Bank’s Carbon finance, 331

YYieldcos, 220–221

438 Index