DBS provides US$210 million loan to energy transition partnership under Singapore’s blended finance initiative

[SINGAPORE] DBS is providing a US$210 million senior financing facility to an investment vehicle supporting the Energy Transition Acceleration Finance (Etaf) partnership’s displacement strategy.

This marks the first loan extended to the vehicle, EtafCo, with DBS as the fund’s inaugural senior debt financier, the lender said in a statement on Wednesday (Jun 24).

It added that the loan will support “eligible energy transition infrastructure debt investments, including renewable energy, grid modernisation, energy storage and other clean energy solutions that reduce reliance on, and utilisation of, coal-fired power generation”.

EtafCo’s first phase will focus on investments in clean energy transition and grid infrastructure projects to advance displacement.

The investment vehicle also seeks to mobilise additional pools of capital for Asia’s energy transition, by improving risk allocation and supporting bankable transition infrastructure.

With this move, DBS becomes the sole commercial bank supporting two partnerships within Financing Asia’s Transition Partnership, or Fast-P, which is Singapore’s blended finance initiative.

Launched by the Monetary Authority of Singapore, Fast-P mobilises concessional and private capital to accelerate the deployment of clean energy and energy transition projects across Asia.

In May, DBS contributed US$75 million to Fast-P’s flagship Green Investments Partnership fund managed by Pentagreen Capital. The bank served as the lead coordinator for its senior tranche.

Shilpa Gulrajani, head of sustainable finance at DBS’ institutional banking group, said: “Asia’s energy transition requires pragmatic and scalable financing solutions that can accelerate the deployment of cleaner energy infrastructure today while creating the conditions for deeper decarbonisation over time.”

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The Etap fund “represents an innovative approach to bridging this gap, by supporting projects that can meaningfully reduce reliance on coal-fired generation and strengthen grid readiness for a lower-carbon future”, she added.