Opening Remarks by Lavan Thiru, Executive Director, Infrastructure Asia at the Innovative Finance Clinic 2022 on 8 September 2022
Mr Anouj Mehta, Country Director Thailand Resident Mission and Unit Head, Green and Innovative Finance and the ACGF, Southeast Asia Department, Asian Development Bank
Mr Tom Moody, Regional Director Southeast Asia, Climate and Energy, British High Commission
Ladies and Gentlemen,
1. Good morning and a warm welcome to all the foreign delegates and ADB colleagues to Singapore. That many of you have taken time to attend this clinic and the discussions over the next two days demonstrates that this is an important issue that we are all learning to deal with.
Environmental Potential of Green Mobility
2. One of the key environmental concerns for Southeast Asia is transportation, which is responsible for 40% of global greenhouse gas emissions and 23% of carbon dioxide1. Because of their lower emissions over their lifetime as compared to conventional ICE vehicles, electric vehicles (EVs) are an important part of meeting global climate change goals and feature prominently in mitigation pathways to limit global warming to below 2°C, in line with the Paris Agreement’s targets2.
3. In addition to the tailpipe emissions, the sprawling urban development and rising car ownership has also led to traffic congestion challenges and untapped opportunities. The traffic congestion costs the city of Jakarta an estimated $3.5 billion per year in opportunity costs and operational costs, similarly costing Manila $3.2 billion. It is pertinent that we tackle growth in a sustainable manner by electrifying and decarbonising our transport systems.
Economic Potential of Green Mobility
4. EVs are set to transform the mobility ecosystem faster than anticipated3. This means that charging infrastructure and services critical to the adoption of battery-powered EVs are going to be key drivers of economic growth and strategic business opportunities prime for attracting foreign investments. There are opportunities for creating 7.4 million jobs by 2030 based on $26.8 billion investment in the sustainable urban development and transport area in Southeast Asia. Thailand for example plans to attract US$12.08 billion in investments over the coming years and support the production of 1.2 million EVs and 690 charging stations by 20364.
5. Recognising the environmental and economic potentials of green mobility, governments can make headway for the transition of the transportation ecosystem. Singapore has committed to stop sales of diesel cars from 2025 but in tandem with that, introduced incentives and schemes to help make EVs more affordable such as reducing upfront cost of vehicle registration fee and reducing recurring costs such as road tax. Singapore has committed to developing the infrastructure with 60,000 EV charging points by 20305. Singapore would also electrify half of its bus fleet by 2030 and achieve a 100% cleaner energy bus fleet by 2040.
6. In February 2022, Thailand also released new incentives for its EV industry as part of its plan to transform 50% of its auto production to EVs by 2030 and become a production base for cleaner vehicles in Southeast Asia.
Infrastructure Asia Value Proposition
7. On our part, Infrastructure Asia is a project facilitation office set up to harness the collective capabilities of the Singapore ecosystem to provide options for a best-fitting solution for the region’s infrastructure development. We do this through catalysing project development, financing and execution opportunities. Earlier this year, we launched our Project Portal, which serves as a marketplace to showcase infrastructure opportunities, build project pipelines and bridge partnerships between public and private partners to discuss, invest and develop infrastructure projects in the region. We welcome you to check out our project portal via the QR code shown on the top of the screen and also at your table.
8. Standardisation is a key step towards expediting and reducing the cost of project finance, thereby narrowing the infrastructure investment gap. InfraAsia has developed a set of standardised core project finance loan documents, which standardises 50% of the terms in project finance documents and the remaining clauses can be customised to specific project needs. We have made these documents available for free on our website in English, Bahasa Indonesia, Chinese and Vietnamese to encourage its use in the region. More information is available via the QR code here on the bottom of the screen and also at your table.
9. Infrastructure Asia has a network of many EV industry players based in Singapore, some of whom are already making headway in Asia. Seraya Partners, an investment management firm, is investing in EV charging networks abroad. Charge+, an EV charging solution provider from Singapore, is also establishing new offices across Southeast Asia to serve more EV drivers. We are pleased to have many players over the next two days to share their considerations and growth opportunities. We have also invited a wider network of partners including Go-Ahead, Durapower, VinFast, Clifford Capital, SMBC, KPMG, PwC and Arcadis who cover the full value chain of this sector to join us at our networking session tomorrow.
Infrastructure Asia-ADB Cooperation Agreement
10. Multilateral development banks such as ADB also play a key role in catalysing growth opportunities. The Infrastructure Asia-ADB cooperation agreement, first signed in 2019, has recently been renewed. It aims to facilitate sharing of case studies and originate new projects, through innovative finance clinics such as this. This will strengthen and grow the pipeline of bankable sustainable infrastructure projects in the region, allowing us to better tap commercial funding sources and bringing us closer to a net zero future.
11. Over these two days, we hope you engage in fruitful discussions, make new contacts, share ideas, get financing, and foster collaborations – all to advance the goal of sustainable mobility ecosystem for our future.
12. Thank you very much.