Inaugural EU-Singapore Dialogue on Global Gateway [Highlights]

02.02.2024

On Thursday, 25 January 2024, the inaugural EU-Singapore Dialogue on Global Gateway brought a variety of stakeholders together to discuss ways to facilitate 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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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 2030. 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.