Prospects of Catalysing Regional Solutions and the Role of Low-Carbon Transition Fund

Placing the ASEAN and East Asian economies onto a low-carbon development pathway requires an unprecedented shift in investments. The private sector will have to play a central role in financing this transformation and achieve the Paris Agreement targets. This chapter reviews the state of low-carbon investment in the region and provides a critical analyses of private-public financial initiatives and the mechanisms, being practiced across the developing Asia. In practice, private financing of low-carbon energy projects is not easy due to various risks, projections of revenues as well as evolving regulatory changes under the ambit of economic integration process. Four interrelated regional solutions: a low-carbon transition fund, financial performance warranty program, regional best regulations and high quality infrastructure program are proposed as means to accelerate low-carbon finance. This chapter also discusses in detail the implementation outlook and challenges in achieving the objectives of the transition fund and other associated solutions. It recommends close coordination across the economic, energy and environment ministries that involve promoting sound investment policy principles, including non-discrimination, investor protection, contract enforcements and transparency for the activation of the fund.