Temasek targets new technologies in bid to decarbonise

The CIO at the Singapore state giant says climate financing and investments made in innovative technologies will be pivotal in curbing greenhouse gas emissions.
Temasek targets new technologies in bid to decarbonise

Singapore’s state-owned conglomerate Temasek plans to focus on innovative climate technologies to drive its decarbonisation strategy, but needs to overcome initial funding bottlenecks to reach commercial scale.

Rohit Sipahimalani,

“Temasek has invested in areas like low-carbon cement, low-carbon steel and even nuclear fusion, which is much longer term than carbon capture and carbon storage technologies,” says chief investment officer at Temasek Rohit Sipahimalani.

“This is a key area for us,” he added.

Speaking at the Financing Asia’s Transition Conference (FAST), which was jointly organised by BlackRock, the Monetary Authority of Singapore (MAS), and Temasek in Singapore earlier this month, Sipahimalani said there were still major hurdles to overcome in the climate innovation space.


Chief among them was a large gap between the initial funding to develop these technologies and reaching a manufacturing-level capacity for these technologies.

“The manufacturing capacity can cost a lot and is a bottleneck right now,” according to Sipahimalani.

In May 2023, Singapore joined the First Movers Coalition, or FMC, as a Government Partner, alongside Denmark, India, Italy, Japan, Norway, Sweden, the United Kingdom, and the United States.

The FMC will allow companies to harness purchasing power and supply chains to create early markets for innovative low-carbon technologies. The hope is that it will serve as a launchpad for them to reach commercial scale.


Decarbonization Partners, a Temasek-BlackRock partnership, is launching a series of funds that focus on late-stage venture capital and early-growth private equity decarbonization solution investments.

For Sipahimalani, cost efficiency could be generated by building demonstration projects, giving impetus to technology innovation.

“By kick-starting investments of US$10-20 billion annually, countries can accelerate the realization of cost efficiencies in their innovative solutions.”

For example, the economic incentive to deploy large amounts of solar power in India and China has reached a tipping point where solar is cheaper than coal-based electricity.

“As you build up scale and success, there are skills coming into the market, it reduces the costs and increases competitiveness and attracts more capital,” he said.

“You have a bigger pool of diversified projects - you can refinance those through securitization etcetera. So, a lot of things can be done once a start has been made,”  Sipahimalani said.


Speaking at the same FAST Conference, Professor Avinash Persaud, special envoy on Climate Finance to Prime Minister Mia Mottley of Barbados, said that “the cost of capital in renewable energy in developed countries has been around 4% per year (while) the cost of capital in renewable energy in the developing world is 10%, making it very difficult for the private sector to get involved in these projects”.

The excess risk premium and macros risk for these projects must be reduced, he said.

“Two-thirds of the capital-risk problem in the emerging markets is the macro risk problem – country risk and currency risk.”

One key way of managing these macroprudential risks, he said, is “guaranteed foreign exchange for green transition projects”.

Sipahimalani underscored “the need for stable regulatory policies, as well as multilateral involvement, to instil investor confidence in renewable energy projects in Asia.”

The 2023 South East Asia Green Economy Report says that up to eight years is needed to clear necessary permits for Renewable Energy Deployments. This report was produced by Bain & Company in partnership with Temasek, GrenZero, and Amazon Web Services.


Sipahimalani took the example of India which has been doing work in the solar energy space for more than 10 years now.

“Last year around US$5 billion was invested in ASEAN or Southeast Asia in Green projects and from that, only around US$3.5 billion was in renewables.

"In India, this number was four times this amount. The big difference is consistency and continuity in the solar and renewable energy policies in India for more than a decade now. Projects are being curated with all approvals in place where the moment one bids, within 18 months you can set up a new project.

“For several countries in ASEAN, it will take you 18 months to get approval to even start building a project."

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