Singapore has a long track record of turning ambition into capital. As the region accelerates its energy transition, that role has never been more vital. From hydropower in Lao PDR to offshore wind in Vietnam, Asia’s clean-energy potential is immense. But without sufficient private investment, much of it will remain untapped.
While the energy transition cannot wait, the financing architecture to deliver it remains underbuilt. Catalytic capital, such as Asian philanthropic capital, is still largely untapped, and scalable platforms remain to be seen. Public balance sheets are still strained after the pandemic, limiting public spending capacity and highlighting why private capital must now move from aspiration to execution.
The scale of the challenge is clear. Estimates from the Asian Development Bank suggest Asia requires up to USD1.7 trillion a year in sustainable infrastructure investment through to 2030. Global capital is abundant but often favors developed markets where risk and return feel more predictable, regulation and contract enforcement are well established, and local-currency volatility is lower. Many Asian projects remain underfunded because regulatory frameworks are fragmented, policy signals are uncertain, and scalable instruments that translate development impact into investable assets are still limited.
This is where multilateral development banks, including AIIB, play a catalytic role. MDBs sit at the nexus of public, private and philanthropic stakeholders. We support government efforts to strengthen the regulatory frameworks that give investors' confidence.
We also co-finance with long-tenor instruments so projects can reach profitability, and we partner with philanthropic and concessional funders to design risk-sharing tools that improve bankability. Practical solutions such as credit guarantees, mezzanine tranches and local-currency options lower entry barriers and crowd in private investors. Portfolio approaches matter too. For example, securitization of seasoned infrastructure loans allows banks to recycle capital, expanding lending capacity without compromising prudence.
This collaborative model is gaining traction. Following the recent ASEAN Summit in Kuala Lumpur, AIIB signed cooperation agreements with Maybank, CIMB, AmBank and BPMB to jointly mobilize up to USD6 billion in financing for sustainable and technology-enabled infrastructure across the ASEAN region. The initiative will support sectors such as renewable energy, transmission networks, transport and digital infrastructure, combining Malaysian banks’ regional expertise with AIIB’s capacity to provide long-term capital. It illustrates how multilateral and regional partnerships can crowd in private investors and deepen financial integration across Southeast Asia – while advancing flagship projects like the ASEAN Power Grid. The next step is to translate these partnerships into investable products and distribute them to a wider base of long-term investors.
Singapore’s financial ecosystem is positioned to bridge projects and capital. Its clear policy signals, robust market platforms and strong institutions provide the practical foundations the region needs. Bayfront Infrastructure Capital’s securitization platform, which AIIB has invested in, shows how diversified portfolios of Asian infrastructure loans can reach capital markets. Blended-finance initiatives such as FAST-P led by the Monetary Authority of Singapore, alongside well-defined sustainability taxonomies and disclosure standards, are creating the blueprint to standardize and scale green investment across ASEAN.
With these mechanisms maturing, Singapore’s institutional investors - sovereign funds, banks, insurers and family offices - can play a decisive role. Allocating even a small share of portfolios to structured, de-risked Asian infrastructure can deliver stable, long-term returns while directly supporting regional decarbonization and connectivity goals. This is not charity; it is strategic investment that aligns financial performance with purpose.
The opportunities are tangible and within reach. Strengthening power lines and substations, building portfolios of renewables and storage, and scaling digital infrastructure can lift productivity while lowering emissions. Major capital markets like Singapore can turn these plans into investable reality.
MDBs, including AIIB, are ready to partner with market participants where collaboration can create momentum over the next 12 to 24 months to:
- Work with capital market participants to broaden participation in sustainable development debt offerings that support longer-term financing.
- Co-design guarantee and risk-sharing tools with insurers and regional lenders, focusing on priority risks such as offtaker payment reliability, construction timelines and cross-border convertibility.
- Expand local currency and FX solutions, so project revenues and repayments are better aligned, enabling greater participation by regional banks and institutional investors.
- Drive innovation by developing public-private-philanthropic partnership (4Ps) platforms that have potential to unlock significant private capital. This includes piloting blended finance mechanisms and instruments that align incentives across public, private and philanthropic actors.
On the public side, progress often depends on detailed, country-specific work. Areas where closer collaboration could help unlock more private investment include developing consistent, bankable contract frameworks - for example, power purchase agreements - streamlining permitting and land processes with clearer responsibilities and timelines and advancing cross-border tariff alignment for initiatives like the ASEAN Power Grid so clean power can move without unintended mark-ups. This will not happen overnight, but with clearer policies, smarter risk-sharing and a focus on bankability, private capital can move at scale.
The transition will happen fastest where capital feels confident. Singapore can help design that confidence by linking credible projects with long-term investors across Asia. As we build the pathways for private finance to flow, a sustainable future will follow.
This op-ed was originally published on The Edge Singapore.
