Singapore investment company Temasek is setting up a debt financing platform with HSBC to help fund sustainable infrastructure projects with an initial focus on South-east Asia.
They will invest up to a combined amount of US$150 million (S$204 million) in the initiative.
Temasek and HSBC said in a joint statement this morning: "In Asia, there is a significant funding gap for sustainable infrastructure required to address challenges and opportunities presented by climate change.
"Many infrastructure projects in the region face varying degrees of barriers to bankability. Private capital can play a unique role in bridging this gap."
The longer-term goal is to build a pipeline of projects to scale, with the platform aiming to dispense over US$1 billion of loans within five years, they added.
The funds will be directed at renewable energy and storage, water and waste treatment, and sustainable transport, which will help meet carbon reduction targets and offset the impact of climate change.
The two organisations noted that a meaningful portion of the loan portfolio will target marginally bankable, sustainable infrastructure projects by providing development expertise, technical assistance and blended finance solutions if needed.
Private and institutional investors could eventually be crowded in as projects develop.
The Asian Development Bank and Clifford Capital Holdings, a specialist provider of debt financing solutions, will be strategic partners in the platform, which will be based in Singapore.
HSBC group chief executive Noel Quinn said: "This innovative partnership aims to tackle some of the biggest barriers to financing sustainable infrastructure where it's needed the most.
"Neither private nor public sector can close the financing gap alone - but by working with Temasek, the Asian Development Bank and Clifford Capital, we can deploy significant amounts of blended finance for projects in South-east Asia that would otherwise go unfunded.
"Collaborations matter in the fight against climate change, and this partnership provides an impactful model for others to follow."
Temasek International chief executive Dilhan Pillay added: "As an investor committed to sustainability at our core, we are keen to explore innovative solutions to address critical infrastructure needs, especially in emerging markets in Asia, that will contribute to the transition to net zero."
He noted that public funding alone will not cover the scale of climate change mitigation and transition needed across South-east Asia. "By joining forces, we can catalyse our capital, multiplying impact and scaling to meet the opportunities."