Green energy lending dominates companies’ portfolio

Capital is increasingly shifting towards clean energy projects.

The global energy transition is driving a shift in capital allocation, with more funds being directed toward clean energy projects. Audra Low, Group Head of Client Coverage and CEO,  Clifford Capital Pte Ltd, noted a clear trend in the financial sector’s growing support for green energy.

"You can see a lot of capital being directed towards clean energy, as opposed to fossil fuel-based energy," Low said.

This shift has made it difficult to find lenders willing to finance new coal power plants, while oil and gas projects also face stricter scrutiny. "People are becoming a lot more selective in terms of the projects they want to finance," Low explained, citing concerns about stranded assets over the next 10 to 20 years.

According to Low, the region still lacks a strong pipeline of bankable renewable energy projects, particularly compared to India, which remains the most active renewable energy market in the region. "Within Asia, it’s a bit of a stop and start... there still remains quite a lot to be done from a policy point of view," she said.

In terms of growth, Low pointed out that green energy lending has risen sharply in recent years. "Maybe green energy was about 10% of our portfolio two, three years ago. It's actually coming up quite quickly to nearly 50%," she noted. However, she emphasised that further policy changes are needed to unlock capital and build investor confidence in Southeast Asia’s renewable energy market.