Transition finance in South-east Asia expected to grow in 2026, say market watchers

[SINGAPORE] Transition finance is expected to grow in South-east Asia in 2026, following the release of international frameworks on how financing tagged with a sustainability label can be used by carbon-intensive sectors to facilitate their decarbonisation.

Late last year, the Loan Market Association published a guide on structuring transition loans aligned with net-zero pathways, while the International Capital Market Association released a similar tool for the issuance of transition bonds.

These guidelines are a “meaningful step forward” for Asian issuers, said Max Thomas, head of sustainable capital markets for Asia-Pacific at HSBC.