Global Gateway: First EU-Singapore Dialogue on Facilitating Green and Sustainable Investments in Southeast Asia
The Global Gateway offer is well placed to address funding gaps and accelerate the development of project pipelines in Southeast Asia. Private funds, multilateral financial institutions and government agencies present at the event expressed marked interest in Global Gateway.
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Event coverage in Singapore's leading Chinese-language daily Lianhe Zaobao
EU Ambassador to Singapore Iwona Piórko delivered the opening remarks and this was followed by a keynote speech by Dr Kay Parplies, Senior Economist and Head of Unit for External Action Guarantees at EU’s Directorate-General for International Partnerships. Leading experts steered and participated in two panel discussions. Ms Sunita Lukkhoo, Head of European Investment Bank (EIB) for Southeast Asia and the Pacific spoke about how EIB supports green and sustainable finance in the region.
European Union Delegation to Singapore
Opportunities for sustainable investments in Southeast Asia: Southeast Asia is one of the most dynamic regions in the world, and presents significant investment opportunities for years to come, particularly in sustainable infrastructure, energy systems and digital connectivity. With an average economic growth of 4.5-5.5% in Southeast Asia, private sector investment to the region has been robust, representing 80% of global foreign direct investment (FDI) allocated in 2022. The digital economy, currently valued at $1 trillion, is expected to double to $2 trillion by 2030. The Global Gateway emerges as a strategic initiative to assist in the mobilisation of capital for sustainable investments in Southeast Asia, with €10 billion budgeted investments to be realised by 2027.
Challenges for sustainable infrastructure project development: Infrastructure projects generally take longer than forecasted, and there is a need to establish a stronger pipeline of bankable projects in order to attract additional streams of private capital. Moreover, while sustainable infrastructure investments are crucial for climate mitigation, the complex nature of climate change and uncertain forecasts over its long term effects pose a significant hurdle to regional climate resilience and the future-proofing of infrastructure. For this reason, climate risks are being factored into the projects funded through the Global Gateway.
Role of Blended Finance and International Collaboration: Where projects are considered to be ‘marginally bankable’, concessional capital has a role to play to absorb risk and unlock much-needed commercial capital, ensuring that public investment is additional and does not crowd out the private sector. Additional financing for small and medium enterprises, and instruments provided in local currencies would also help closing the financing gap for a greater impact and achievement of Sustainable Development Goals. Global Gateway, through a mix of grants and guarantees, can facilitate the development of sustainable infrastructure projects by providing blended finance structures that de-risk projects and make them more attractive to private investors. Singapore is adopting a similar approach to the use of blended finance for sustainable investment in the region, and in general participants highlighted the importance of providing an enabling environment to scale up sustainable investments.
Global Gateway investments are always accompanied by technical assistance and knowledge sharing, following a tailored approach that adapts to local needs and engages the local government to strengthen regulatory frameworks where needed. Through close cooperation with governments, multilateral financial institutions and the private sector, the Global Gateway fosters investments grounded in European values, following a Team Europe approach to sustainable development.
Overall, the dialogue served as a platform for constructive discussions and exchange of experiences related to green transition projects. The Global Gateway emerges as a catalyst for sustainable investment in Southeast Asia, leveraging innovative blended finance approaches to de-risk projects, mobilise private capital, and accelerate the development of green energy, infrastructure and connectivity projects, among others. Singapore, as a global financial hub guided by forward-looking institutions, is well suited to provide an enabling environment for financing projects grounded on the same sustainability agenda and European values at the heart of Global Gateway.
This dialogue was co-organised by the EU Delegation to Singapore and EuroCham Singapore, with support from the EU’s Foreign Policy Instruments Facility and the EU-ASEAN Business Council.
About Global Gateway: Launched in 2021, Global Gateway is a European strategy to boost smart, clean and secure links in digital, energy and transport sectors and to strengthen health, education and research systems across the world. Global Gateway is an alternative offer connecting the world through investments and partnerships following a set of values, principles and high standards, to enhance good governance, transparency, and sustainability.
Global Gateway is the EU’s contribution to narrowing the global investment gap worldwide. It establishes the EU a trusted partner to design sustainable, quality projects and ensure projects are implemented in a transparent way, do not create unsustainable levels of debt and deliver lasting social and economic benefits to local communities.
Global Gateway aims to mobilise up to €300 billion in investments through a Team Europe approach, bringing together the EU, its Member States and their financial and development institutions. The focus is on smart investments in quality infrastructure, respecting the highest social and environmental standards, in line with the EU’s interests and values: rule of law, human rights and international norms and standards.
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