Climate finance: Why the money exists but is not reaching projects
Most of us do not think about climate change much until it personally affects us as it has this year with the rising price of fuel and more recently the haze. The harder question is who pays for the climate transition, and who is willing to take the risk.
In this episode of Lens on Singapore, a video podcast from The Business Times, I speak with Leslie Maasdorp, CEO of British International Investment (BII), the UK government’s development finance institution for emerging markets. We look at what stops money from reaching climate projects, and what a deep financial hub like Singapore can do about it.
Why watch
- Why the money is not moving The largest pools of capital, from pension funds to sovereign wealth funds, still sit in traditional assets. BII invests roughly US$2 billion a year, which Maasdorp says is small against the scale of the problem. He explains how development finance institutions try to “crowd in” private investors.
- Returns and impact, both required BII must earn a commercial return, but a project also has to deliver development impact, such as jobs, lower emissions and more women in the workforce. Maasdorp explains how that mandate lets BII take a longer view than commercial investors, and why a project with only clear returns can still be turned down.
- Why developing economies need not choose Renewables are now the cheapest way to produce electricity, according to BII. I press Maasdorp on the tension between industrialising and decarbonising, using Africa’s electricity gap as the test case.
- Singapore’s role Maasdorp sees the republic’s convening power as the advantage. He explains why pooled, catalytic capital and regional policy alignment matter, and why the haze shows that no country is isolated.
- The one thing he would change Maasdorp’s answer is adaptation and resilience. The recent Nepal floods, which he puts at in excess of US$5 billion in damage, shows the stakes. Protecting infrastructure avoids losses rather than earning revenue, which makes it hard to finance. We also discuss AI’s promise and its heavy power demand.
I left with one question still open: how do we get whole populations to care? Maasdorp’s answer may surprise you. Watch now.
Discover more episodes at bt.sg/podcasts. Got feedback? Email us at btpodcasts@sph.com.sg.
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Written and presented by: Claressa Monteiro (claremb@sph.com.sg)
With Leslie Maasdorp, CEO of British International Investment (BII)
Executive producer: Claressa Monteiro
Producer: Nicole Teo
Coordinating producer: Chai Pei Chieh
Video production: Studio +65
A podcast by BT Podcasts, The Business Times, SPH Media
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