At The Asset’s 9th Asia Sustainable Infrastructure Finance Leaders Dialogue in Singapore on July 9, Indonesia, India, Laos and the Philippines were highlighted as key countries in Asia’s clean energy transition.
During the event’s first discussion, a heavyweight panel of industry experts and innovators shared their experience in both financing and developing projects in sectors like renewable energy, cross-border energy projects, grid infrastructure development and data centres.
Among the themes emerging from the discussion was the demand for greater collaboration between policymakers, sponsors, banks and investors to fulfil the potential of Asia’s significant clean energy revolution.
Panellists also highlighted the necessity of reducing Asia’s ongoing reliance on fossil fuels, particularly coal, to facilitate a smoother transition to renewable energy.
Fatima Al Suwaidi, head of development and investment for Asia-Pacific and president-director of Indonesia at Masdar, the Abu Dhabi-based clean energy company, shared her experience of funding and developing the Cirata floating solar plant on a reservoir in West Java province, some 130 kilometres from Jakarta.
The development, which is powered by 340,000 photovoltaic panels and generates 192 megawatts (MW) of clean electricity, Al Suwaidi pointed out, faced numerous challenges, including defining floating solar within Indonesian regulations and dealing with complex geographical conditions. “Despite these challenges,” she said, “the project achieved financial closure in November 2023, about a year and a half after signing the power purchase agreement.”
The discussion then touched on the broader landscape of infrastructure development in Southeast Asia and the importance of partnerships with local entities to navigate political and regulatory risks.
Kanishk Bhatia, head of infrastructure, private funds, at real asset manager ESR Group highlighted his firm’s collaboration with local partners in Indonesia for logistics and infrastructure projects, underscoring the significance of local partnerships in mitigating risks and ensuring project success.
The audience was also brought into the panel discussion to answer a question on the main challenge faced by those deploying capital to infrastructure projects in Asia, to which 75% responded by saying that the maturity and/or unpredictability of regulation in the region was the top issue.
India rising
The discussion then turned to India and the vast country’s burgeoning infrastructure sector, focusing on renewable energy and large-scale projects.
Anupam Misra, head of group corporate finance at Adani Group India told the packed ballroom that India was a market with vast growth potential in various infrastructure sub-segments, such as renewable energy, roads and data centres.
Misra offered up a current example of a 640MW solar project in India, developed in just nine months by his firm despite significant challenges.
The project, Misra added, was developed on a massive land parcel in Gujarat and has the potential to house a 30-gigawatt solar project, which could make it become the largest single-location power plant globally.
The potential to distribute the clean energy generated by such massive renewable energy projects was also discussed by Jackie Surtani, the Asian Development Bank’s regional director, who highlighted a notable cross-border renewable energy project in Laos, the Monsoon Wind Power project.
This US$692 million, 600MW project is seen as a blueprint for future regional collaborations and exemplifies how countries with abundant renewable resources can export energy to neighbouring nations and foster regional energy security and cooperation.
Challenges in infrastructure financing were also discussed, with a focus on the rising costs of financing and the impact of inflation. Despite the higher financing costs, the panellists’, including Devin Chan, the deputy executive director of Singapore-based Infrastructure Asia, stressed the importance of long-term perspectives in infrastructure investments.
The conversation also highlighted the significant role of green and sustainability-linked bonds in financing these projects. Ray Tay, the senior vice-president for project and infrastructure finance at Moody’s Ratings, noted that despite macroeconomic challenges, there was substantial investor interest in green and sustainable infrastructure projects.
In summary, the conversation underscored the complexities and opportunities in developing large-scale renewable energy and infrastructure projects in Southeast Asia and India, the importance of local partnerships, innovative financing models and long-term perspectives.
The panellists offered their hands-on advice on how to navigate the challenges and tap into the significant growth opportunities in these dynamic markets.
Stayed tuned for more post-event content from our 9th Asia Sustainable Infrastructure Finance Leaders Dialogue.
