UK, Singapore aim to finance 175 MWh of Southeast Asian batteries

A finance partnership between the UK and Singaporean governments, HSBC bank, and German renewables developer Ib Vogt is aiming to drive around 175 MWh of battery energy storage systems in Southeast Asia.

The $80 million Development and Construction Facility announced by the partners aims to catalyze an initial $300 million worth of clean energy projects in the region, also including around 260 MWp of generation capacity.

The debt package has been announced by the Pentagreen Capital sustainable infrastructure investment body established by HSBC and Singaporean state-owned investment firm Temasek, and United Kingdom development finance body British International Investment (BII).

Working with Ib Vogt, the fund’s initial focus will be on the Philippines and Indonesia, with a first, 100 MWp solar project in the former to benefit from an unspecified amount of “mezzanine” funding, which can be converted into project equity in the event of a default. That bridge loan will enable the project to progress onto separate, senior debt supplied by HSBC.

With a press release published to announce the fund stating projects could be deployed in “other eligible geographies,” Pentagreen CEO Marat Zapparov said the Philippines and Indonesia had been chosen “due to their strong renewable energy potential, supportive regulatory environments, and growing demand for clean power.”

Pentagreen and BII cited an International Energy Agency (IEA) prediction that electricity demand will rise 4% annually, through 2035, in Southeast Asia, with solar, wind, bioenergy, and geothermal power set to meet more than a third of that demand. The IEA has calculated that will require the region securing $190 billion in clean energy investment by 2035, a fivefold increase on its current level.,

Commenting on the new finance facility, Ib Vogt Asia-Pacific CEO David Ludwig said, “Our team is deeply passionate about accelerating the energy transition and firmly believes that the significant financing volumes required for this region will increasingly depend on innovative solutions like this facility. This partnership marks a crucial step towards implementing our growing pipeline of late-stage projects in the coming years.”