Climate risk pricing

APAC coal divestments: debt investors hold the key

Written by Ulf Erlandsson & Cedric Rimaud

Download full paper (0.2mb)

Economic growth in the Asia-Pacific region (APAC) is energy hungry, and being powered by coal. The current trajectory is for further increases, which will need to be decommissioned to achieve the 2030 and 2050 objectives of net-zero across the region.

While there are some encouraging renewable replacement initiatives in the region, there is also a concerning trend of assets being sold to private buyers. This activity takes assets out of public owernship, reduces transpancy, and risks hiding the true extent of remaining carbon emissions.

In this piece, we look at the need to engage on multiple fronts to support a credible transition for the region.

Debt investors stand as the first line of defence and must actively engage with coal asset owners, industrial groups and financial institutions responsible for financing the region's economic activity.

Debt investors need to engage with APAC's energy players and provide the necessary capital needed for the carbon transition, while watching out for investments that are not consistent with their environmental objectives. New debt instruments can help channel more capital with greater impact.

About the authors

Ulf Erlandsson

Ulf Erlandsson

Founder, Board member

Dr Ulf Erlandsson founded the Anthropocene Fixed Income Institute and was its first CEO. A pioneer of climate-focused fixed income portfolio management, he was named Environmental Finance’s Bond Personality of the Year 2022.

Cedric Rimaud

Cedric was previously a Senior Analyst, APAC, at AFII.

Before you sign up

By completing this form, you agree to AFII sharing information that we think you may be interested in, including our insights on climate transition. See our Data Protection Policy for more information about how we collect and use your personal data, and any rights you may have in relation to your personal data. You may opt out from our distribution list at any time.