458937 1 En BookBackmatter 423.
Transcript of 458937 1 En BookBackmatter 423.
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
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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