Over the past decade, “blended finance” has been offered as one way to close that gap. In its simplest form, blended finance is the strategic use of catalytic capital from public or philanthropic sources to mobilise additional private investment into sustainable development.
The conflict in the Middle East is a reminder that dependence on fossil fuels carries not only climate costs, but also strategic and economic risks. The focus on energy security also strengthens the case for mobilising capital into renewables, grids and other transition investments to reduce Asia’s exposure to geopolitical shocks.
Asia is investing in the climate transition. Solar parks are being built, grids are being upgraded and factories are beginning to clean up their processes. Yet, compared with what is needed to support a range of net-zero ambitions and transition pathways, the volume of capital being committed remains far too small. Estimates suggest that Asia alone requires roughly US$2 trillion ($2.55 trillion) in climate-related investment annually over the coming decade.
