IPEF Clean Economy Forum To Spur Indo-Pacific Green Tech Investment

By the EMIS Insights Editorial Team

Singapore is hosting the Indo-Pacific Economic Framework (IPEF) Clean Economy investor forum this week and hopes are that the forum will result in multibillion-dollar investments in climate infrastructure. "These countries want to hit their own climate goals and build up their own infrastructure, but they need capital and that's what we're going to bring to the equation," US Commerce Secretary Gina Raimondo said as cited by Reuters. Participating countries will put on the table their top clean economy projects in various fields such as renewable energy generation, energy transmission, infrastructure, transportation, and mobility.

Over 20 major US companies, among which Amazon.com's AWS, Bechtel, Alphabet's Google, Microsoft, BlackRock, Citi, Goldman Sachs, JPMorgan, Morgan Stanley, and KKR, will take part in the investment forum along with major Australian and Japanese investors as well as startups and government agencies.

The Indo-Pacific Economic Framework for Prosperity (IPEF) was launched in May 2022 and currently includes 14 partners - Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, the US, and Vietnam. Its main aim is to serve as a collaboration platform to promote resilient, sustainable, and inclusive economic growth. The framework has four pillars of cooperation - trade, supply chain, clean economy, and fair economy.

Negotiations on the trade pillar are still ongoing. The supply chain agreement, whose goal is strengthening supply chain resilience, entered into force in February 2024. The fair economy agreement includes commitments on anti-corruption measures and taxation incentives to support a fair and transparent regional business environment. 

Negotiations on the clean economy agreement were concluded in November 2023. This agreement aims to underpin regional cooperation towards the deployment of clean energy technology, the development of infrastructure for cross-border electricity trade, and the promotion of sustainable transport.

The clean economy agreement allows IPEF partners to develop and participate in the so-called cooperative work programmes. The first one of these was announced in May 2023 and concerns green hydrogen. Additional programmes are being considered including on sustainable aviation fuels, clean electricity, and carbon markets. 

There are two financing initiatives in place under the clean economy agreement – a climate fund with USD 300mn in public financing by the US International Development Finance Corporation and USD 900mn in private funding by US equity firm iSquared Capital. The second is a Catalytic Capital Fund, managed by Private Infrastructure Development Group (PIDG). The 14 member nations have pledged to provide USD 33mn towards the Catalytic Capital Fund’s initial funding for climate infrastructure projects, according to the Centre for Monitoring Indian Economy (CMIE). These funds will play a pivotal role in the process of attracting private investment of up to USD 3.3bn for climate infrastructure projects, India’s commerce and industry minister Piyush Goyal has said as cited by CMIE. 

The Japan Hydrogen Association, a group of Japanese companies and organisations, is considering setting up a USD 1bn fund to strengthen hydrogen supply chains, Nikkei reported in June 2024. The fund will allocate a special quota for investments in IFEP members with a view to establishing cross-border supply networks. The new fund could be unveiled during the IPEF Clean Economy Investment Forum. 

Whatever the outcome, the IPEF Clean Economy forum will definitely provide an opportunity for all climate tech companies and entrepreneurs in member countries to showcase their projects to global investors.