Slowly, steady, green!

Happy Tuesday! The weather has been very unpredictable in the past week, one moment it was scorching hot, the other it was raining dog and cat. It’s a reminder to take care of your health in this toxic weather, as well as think harder about these climate-induced extreme weather events. How can we alleviate them?

Sorry, but coal has gotta stay. For Indonesia, until 2060.

Over the span of two decades, Indonesia's coal production surged by an astonishing 558 percent. In fact, the country is instrumental in lighting up the lives of millions in Southeast Asia - reduced more than half the rate of population living without electricity since the year 2000.

Being the world’s largest coal exporter, and relies on coal for 60% of its electricity, Indonesia understands that an immediate switch to renewables would be costly. Recognizing the importance of energy transition, Indonesia said it must first manage domestic resources - which include human capital that would be affected by the switch.

Nevertheless, the country has shown its commitment to energy transition with a plan involving carbon trading system for coal-fired power plants in 2025. The first stage of the system would cover 99 plants.

Read more here.

Asia keeps getting hotter, figuratively. Fullerton Fund Management has successfully raised US$100 million in the initial close of its private equity Fullerton Carbon Action Fund. This fund is set to invest in companies within the manufacturing, industrials, energy, and electric vehicles/mobility sectors. The focus will be on established, profitable businesses with strong cash flows, steering clear of early-stage venture capital investments and infrastructure-related deals. These chosen companies come with lower risks and are well-positioned to offer attractive financial returns over the long run.

Link to the Fund’s official announcement.

Bond market is getting busy with new ESG- themed issuances from both the public and private sectors.

Singapore offered another batch of sovereign green bond on 21 May 2024.

Term: 30 years

Price: S$99.053 with a coupon of 3.25% to offer a yield of 3.30%

Note: S$50 million in aggregate principal amount set aside for public subscription.

Insurance companies were the biggest buyers of the bonds as they accounted for 53%, followed by fund managers, central banks and other investors at 32% and banks at 15%.

Indonesia led the issuance activity in Asia G3 bond market last week with its largest offering of Samurai bonds in multiple tranches totaling 200 billion yen (US$1.28 billion), including blue bonds.

Proceeds from the conventional bonds will be used to finance this year’s budget deficit, while the proceeds from the blue bonds are earmarked specifically for maritime-related projects.

Also on the Asia G3 bond market: Banks including OCBC and ICBC also issued sustainability-linked bonds, while Shandong Hi-Speed Group of China and PT Krakatau POSCO are preparing.

Want to learn more about Sustainability-linked Bonds? Check out this Handbook from the Anthropocene Fixed Income Institute.

More green waves this way

• Singapore is calling. For public feedback on its proposed amendments to the energy market.

• Fisherfolks - the real maker or breaker of wind power projects. To protect pristine land and water, protests by fishing communities delay projects development.

• What is needed to sustainably decarbonize Indonesia’s textile industry? Key words: cap on renewables import from the grid, investment from China, electronic vehicles.

• China and Singapore further cooperate on green and transition finance.

Had fun riding the green waves? Hit reply, let us know!

Wish you a wonderful day.